Legal Commentary

Experts Agree: The Bailout is Trouble

By Professor University of Miami School of Law

Not all experts, but many. Here’s Dean Baker at TPM:

Why Bail? The Banks Have a Gun Pointed at Their Head and Are Threatening to Pull the Trigger

I’ve heard lots of phony stories. Much of the country’s political and economic leadership has been running around raising the prospect of the Great Depression and a breakdown in the banking system (I actually had taken the latter seriously). These stories are absolutely not true.

There is no plausible scenario under which the no bailout scenario gives us a Great Depression. There is a more plausible scenario (but highly unlikely) that the bailout will give us a Great Depression. There is no way that the failure to do a bailout will lead to more than a very brief failure of the financial system. We will not lose our modern system of payments.

At this point I cannot identify a single good reason to do the bailout.

Full post as published by Discourse.net on September 29, 2008 (boomark / email).