The Corner

Re: The People’s Bank

Of course, many economists, as far as I could make out, argued like Andrew (if I recall correctly) that the recapitalization was a preferable alternative to the Paulson bailout plan. So, now he’s conceded that, he should send the extra $450 billlion back to Congress rather than keeping it to create further mischief. On the upside, the high (and scheduled to get higher) coupon price should also help ensure the temporary nature of the investment — banks will want to get short of it very quickly. We should, however, remember that the George Soros version of the recapitalization plan wanted a much lower coupon to stimulate lending. I’m not sure what leeway a future Treasury secretary will have to change these terms, but that prospect should be worrisome.

On the other hand, we should also remember that this act thwarts creative destruction. One thing we saw yesterday was that banks who were not exposed to the subprime risks were the big winners. These should be the banks we turn to in the future by virtue of their success at avoiding the risks. What this plan does is keep the current players and institutions in the game to these banks’ detriment. That is a big downside.

Most Popular


Our Bankrupt Elite

Every element of the college admissions scandal, a.k.a “Operation Varsity Blues,” is fascinating. There are the players: the Yale dad who, implicated in a securities-fraud case, tipped the feds off to the caper; a shady high-school counselor turned admissions consultant; the 36-year-old Harvard grad who ... Read More

Shibboleth Is a Fun Word

EDITOR’S NOTE: The following is Jonah Goldberg’s weekly “news”letter, the G-File. Subscribe here to get the G-File delivered to your inbox on Fridays. Estimado Lector (y todos mis amigos a través del Atlántico), Greetings from Barcelona. And it is Bar•ce•lona, not Barth•e•lona. That ... Read More
Health Care

David Brooks Forgets to Oppose Some Suicides

The well-meaning David Brooks urges us to prevent suicide in his most recent New York Times column. The crisis is certainly real. From "How to Fight Suicide:": You’ve probably seen the recent statistics about the suicide epidemic — that suicide rates over all have risen by over 30 percent this century; ... Read More