Legal Commentary

Your Daily Fix Of Gloom And Despair

By Big Tent Democrat

I have not had much time to look around and really do not know if someone has found a pot of gold at the end of the rainbow to wash away our economic troubles, but I appreciated this part of a Krugman blog post:

To justify the scheme as announced [the Geithner Plan], you have to either assume that the toxic assets are wildly underpriced, or take as a given extreme political and legal constraints preventing you from doing anything close to the right thing.

And about those legal constraints: it’s funny how GM is being treated as a ward of the state, even though it hasn’t formally declared bankruptcy, in a way that AIG — which is 80% government-owned! — is not.

(Emphasis supplied.) More . . .

The 2 points Krugman makes seem obvious but denied by most folks - (1) the assumption behind the support of the Geithner Plan is that politics prevents even trying to do the right thing now and we must absorb the failure of the Geithner Plan before the right course can be taken (see DeLong and Roubini) and (2) the defense of lack of legal authority is proven to be nonsense by the way the Obama Administration has handled the auto industry. It does not take "legal authority" to tell an industry desperate for a federal handout that they have to do things your way.

Obama/Geithner have not tried to do the right thing with the financial industry and the rationalizations of the defenders of policies they think will fail is simply amazing to me.

Anyway, that's all the gloom and doom from me for today. I am gone until tomorrow.

Speaking for me only

Full post as published by TalkLeft on April 02, 2009 (boomark / email).