There is not sufficient information to properly analyze the Bailout, but that does not mean that we can’t discuss the general subject.
It is apparent that the final edition is better than what was proposed first, which was a Wall Street plum with sufficient pork to a particular segment of Special Interest Groups for the Democrats to jump on board.
The public screamed, so the pork was apparently reduced and a few safeguards were introduced to produce what can rightly be presented as a lipsticked pig to give the stock market a date for Monday.
Would the market have tanked? Who knows?
Markets are based on confidence, and confidence is impossible to predict. It would have been an impossible situation, so I suppose doing something is better than doing nothing but the doing something did not include replacing Paulson, Cox, Frank, Dodd.
In the early 90s, I turned a computer company around for the federal Bankruptcy Court, and the second the Court released the company I resigned, saying to the President: “I can only do this once, but you will be back in bankruptcy because none of the top management has changed. Don’t call me again.”
Yes, they went into bankruptcy again. Managements do not change their style, but certain styles are more appropriate in different circumstances. There are probably 50 managers who could make this banking system whole, and none of them are part of the turnaround management package. The managers, and the overseers are all politicians who could not run a successful Dairy Queen, much less General Electric, and certainly not the national economy.
The names that brought us here, remain here. A new administration will permit changes but if you notice, new political administrations just bring in old political names.
The lawyers say “Hard cases make bad law” – and that is one thing I agree with them about: This is a hard case, and I suspect a bad law. Certainly one written hastily.
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