Monday, September 22, 2008
William Kristol and Paul Krugman say Comrade Paulson's $700 billion Great Leap Forward won't work. Kristol doesn't have an argument but Krugman says buying in toxic paper is beside the point, they money should be used to recapitalise banks. This would involve further nationalisation as the government would take equity in return for capital. Truly we are in a new world. Meanwhile, Morgan Stanley and Goldman Sucks have admitted that they were wrong about everything. I expect there are a few 'investment' 'bankers' hunkered down like Hitler in his bunker, blaming it all on the cowardice and stupidity of of the American people, but, basically, the game is up. The effect of the 'innovations' in the financial system for the past 25 years has been entirely negative. This raises two questions: what, exactly, does 'free' mean in 'free markets'? Markets are a product of state action; all neo-liberal denials of this truth are as the babblings of the lunatics in Times Square. Secondly, will the bonus culture be allowed to continue? This encouraged deals that were risky for banks and the rest of us but not for the trader, a glaring absurdity. Bonuses have encouraged a generation of smart young people to do destructive things. Maybe now they can get round to reading books and stuff.
Posted by Bryan Appleyard at 12:45 pm