Thursday, October 09, 2008

From bailing out to buying in

By Creature

This is the bailout plan we've been waiting for. From the NYT:

Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.

Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

I don't know much, but from all I've read this is the path we should have been considering from the start. It's good to see the Treasury, now that it has the billions it asked for, acting as their European counterparts have in trying to get a handle on this crisis. For the unhinged Right it's socialism; for the rest of us, with actual brains, it's sound policy.

For more reaction, see Meme.

(Cross-posted at State of the Day.)

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