Do something useful for a change…

Mark Thompson says:

I’m going to break from my policy of not commenting on this issue here. Whatever my personal opinions of the bailouts, there’s no denying that the entire point of the bailouts was to save banks that were “too big to fail,” because if they failed then the entire economy would be destroyed. How does encouraging the most talented people at those firms to find new employment in other arenas advance those goals? Is Yglesias, who is normally smarter than this, saying that the banks would be better off without these employees? I don’t think so. Instead, he’s saying that the economy would be better off if these employees weren’t working for banks; which makes no sense unless you think the economy would have been better off allowing the banks to fail – and Yglesias doesn’t think that.

That also says nothing about the fact that he’s assuming that every bank employee making at least the threshold amount is “running scams at the taxpayer’s expense.” Since there are any number of people who make that threshold amount in just about every division of a bank, this equates to saying that every element of banking is a “scam at the taxpayer’s expense.” And, again, if that’s the case, then why is a bailout necessary?Report