Paul Krugman And Donald Marron Debate Geithner’s Plan
Krugman doesn’t like it because it doesn’t punish the behavior that got us into this mess in the first place. And while I have a soft spot in my heart for that line of reasoning, his idea of nationalizing the banks is a non-starter. I wish he realized that, but nonetheless.
Marron makes the point that Geithner’s plan won’t solve the entire problem, but it will allow us to actually price these assets once and for all, and that will rid ourselves of the “catching a falling knife” problem that is plaguing the mortgage backed securities right now. Because they could be worth a lot more than many think, but nobody wants to put money into something that everybody knows will go down. And that will, in turn, get it all moving again. At least that’s the hope.
Take a look…
(h/t: The Big Picture)