[lbo-talk] Discussing the Crisis/Bailout

[shag]

At 05:31 PM 10/6/2008, Gar Lipow wrote:
>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" ?

maybe i'm misremembering, but wasn't the next step in the predicted process 
that there would be a run on all the banks?

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