Paul Krugman says “no deal“.
Numerous other economists express scepticism.
Obama poses some general principles/objections.
Bernie Sanders is more specific.
An anonymous member of Congress is shrill.
What do The Editors think? wonders the economic policy community, turning their lonely eyes to me. Well: the primary fault here lies with the institutions who wrote bad mortgages, then with the institutions who laundered these into ridiculously-overvalued securities, and finally with the financial geniuses who bought this nonsense and are now left holding big piles of shit. The sins range from poor risk assessment to professional malpractice to flat-out fucking lying. As this albatross-laundering scheme was carried out in what was at best (I gather) a regulatory gray area, it’s hard to see how the government holds any particular liability here, except for not adequately babysitting the private business transactions carried out by adults. As these under-regulated securities carried no FDIC-type guarantee, I can see no reason for the government to feel obliged to back them up. Which is to say: I am enough of a free marketeer that my prejudice is to let failing enterprises fail, and I’m sure that, were it anybody else’s ass in the fire, the good people who run these failed enterprises would be taking to the pages of the WSJ to editorialize in support of this view. Now, I am sympathetic to the argument that the overall consequences to the economy of letting Big Shitpile fall apart naturally would be too horrible; but, if that is the case, I would like my pound of flesh, please.