Atrios responds to the latest government plan to restart the credit markets via partnerships with hedge funds and private-equity firms:
They made bad bets when they at least theoretically thought they could incur losses. Now the cunning plan is to hope they make good bets even though…no chance of losses!
This is all going to end really badly.
I have some longer thoughts on this subject that I haven’t quite had the nerve to write and post yet, but the short version is this: everyone in the financial industry made bad bets over the past seven years. So if you think the government shouldn’t work with any of these guys, it means you think the government should refuse to work with the financial industry, full stop. That’s just not practical, though. Even if you think they’re all idiots, we have to work with someone, and the idiots are all we have.
Now, as it happens, I don’t think they are all idiots. But that’s the post I haven’t written yet. Maybe later.
