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

PC Culture

America Is Intolerably Intolerant

When you think of the sheer vindictiveness of what happened to Oklahoma quarterback Kyler Murray, it takes your breath away. On the very night of his greatest career triumph, a reporter dug up his old tweets (composed when he was a young teenager), reported on the most offensive insults, and immediately and ... Read More
Politics & Policy

How Democrats Can Blow It in 2020

Donald Trump probably can’t win the 2020 presidential election, but the Democrats can lose it. What I mean is that in a contest between Trump and a generic Democrat, Trump would almost surely lose if the current political climate holds through 2020. According to a Fox News poll this week, 38 percent of ... Read More
Film & TV

Clint Eastwood’s Unforgettable Curtain Call

At 88, Clint Eastwood seldom appears on screen anymore and last acted in a movie in 2012’s mediocre Trouble with the Curve. So the final images of The Mule may be the last we see of him at the movies. If so, what an exit: understated perfection, with a playful hint of subverting his screen image. The Mule is ... Read More