[Pen-l] You were expecting maybe a panacea?

[Sandwichman <lumpoflabor@xxxxxxxxx>]

Peter S. Goodman offers a revealing summary in this morning's New York
Times of the magical thinking behind the Bernanke/Paulson BIG BAILOUT.
A $700 Billion Rescue Plan for Wall St., but Will It Work? Sandwichman
elaborates at EconoSpeak on what is magical about this thinking, if it
isn't obvious from the quote.

http://econospeak.blogspot.com/2008/09/you-were-expecting-maybe-panacea.html)

"If the plan works, it will attack the central cause of American
economic distress: the continued plunge in housing prices. If banks
resumed lending more liberally, mortgages would become more readily
available. That would give more people the wherewithal to buy homes,
lifting housing prices or at least preventing them from falling
further. This would prevent more mortgage-linked investments from
going bad, further easing the strain on banks. As a result, the
current downward spiral would end and start heading up."

-- 
Sandwichman
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