Tuesday :: Jan 20, 2009

Open Thread


by Mary

The proposal for bailing out the banks and their shareholders for the mountains of risky loans is fraught with moral hazards. What type of moral hazard? Well, here's Felix Salmon's pithy assessment:

It's akin to taking a man with a large debt, pointing him in the direction of a casino, and telling him he has unlimited credit to try and pay that debt off.

Sure looks like nationalization is the only way to manage this mess without incenting the greedy to come back for more.

Mary :: 12:00 AM :: Comments (40) :: Digg It!