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Great column on the continuation of the bailout of the financial sector: Bailouts for Bunglers
And I especially love the quote:
“taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right”
Bingo. Further down:
“But bank stocks are worth so little these days — Citigroup and Bank of America have a combined market value of only $52 billion — that the ownership wouldn’t be partial: pumping in enough taxpayer money to make the banks sound would, in effect, turn them into publicly owned enterprises.
My response to this prospect is: so? If taxpayers are footing the bill for rescuing the banks, why shouldn’t they get ownership, at least until private buyers can be found?”
I completely agree that governments are normally not the best choice to own or run businesses, but I think the alternative is worse here. The AIG bailout seemed more reasonable in that sense since the government took majority control.
Separately, I don’t know what to think of the stimulous package. But, since Krugman likes it I’ll assume it’s OK!