Paul Krugman, before his recent dementia, wrote an interesting column in 2005:
In Flatland, a housing bubble can't even get started.
In other words, the Zoned Zone is prone to housing bubbles.
Hank Paulson announces that the Treasury is completely trashing the original bailout plan and just starts handing out money to banks.
It was clear to me by the time the bill was signed on October 3rd that we needed to act quickly and forcefully, and that purchasing troubled assets – our initial focus – would take time to implement and would not be sufficient given the severity of the problem. In consultation with the Federal Reserve, I determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks.'
Economist Robert Murphy has some funny comments on the whole affair.
John Tamny argues here that we should let GM fail.
The latest losses at General Motors reveal yet again that it is the living embodiment of managerial ineptitude, and to ensure that it no longer fails its customers while harming the well-being of Americans more broadly, it's essential to let the firm die.
While I agree that the Big 3 should be allowed to fail, I don't see it as necessarily managerial ineptitude. Government regulations have left these companies as sick and gnarled monsters that need to be put out of their misery. From silly CAFE standards to entrenched Union power, it is only through bankruptcy can any of them hope to emerge as successful and profitable businesses over the long term.