[lbo-talk] Discussing the Crisis/Bailout

Gar Lipow the.typo.boy at gmail.com
Mon Oct 6 14:31:03 PDT 2008


On Mon, Oct 6, 2008 at 2:38 PM, John Thornton <jthorn65 at sbcglobal.net> wrote: John Thornton says:
> I doubt anyone on this list doesn't have different ideas about how a bailout could be done but a different and better option wasn't on the table.

OK, so fundamentally the argument is that this would patch things up long enough to prevent a major crash until a new administration, that it is a good enough patch to be better than nothing, and that this or nothing were the choices. Essentially Doug convinced of this last week. But then comes the same question Doug has not yet answered. This is an empirical argument and to make sense has to falsifiable by an empirical test. How bad can things get before the facts refute the idea that this was better than nothing. It can just be a matter of faith - no matter how bad the turn the economy takes this week, it is still better than would have happened without it. It is a short term fix for certain things - specifically the freezing of credit. So isn't the test that credit unfreezes to some extent this week? IF that is not the empirical test what is the benchmark. What is the point at which you say "the bailout was valueless. it accomplished nothing of we hoped" ?



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