Banking explained

Mark Steyn on the AIG bailout: "The old line on imprudent debt went something like: If you owe the bank a thousand dollars, you have a problem; if you owe the bank a million dollars, the bank has a problem. We seem to have casually accepted the extension of the paradigm: If the bank loans you a million dollars, the bank has a problem. If the bank loans you a billion dollars, the US government has a problem."

Ed Morrissey, meanwhile, says "bailouts must be like Lay’s Potato Chips...apparently, we can’t just eat one." At The Volokh Conspiracy and Megan McArdle's site, they're arguing whether the bailout is even legal.

This is free-market capitalism? Of course not. Free-market capitalism would allow companies that make bad decisions, like AIG (and Lehmann Brothers) to suffer the consequences. This is more like a nationalization.

Damian P.

Update: Forbes: "The economy isn’t the problem, it’s stupid banks making stupider loans."

Posted by damian at September 17, 2008 11:21 AM