Well, the private market had its chance and failed. Terribly, we can now judge.
Remember the Superfund (circa fall 2007), that never came together because no one was around with enough clout to say, "do this, or perish"? Well, maybe not quite that severe, but still ...
Now, instead, the Federal Government is left holding the bag, faced with panic and systemic "unwind" effects that make it hard to keep orderly markets and threaten the general economic prosperity.
So ...
I'm asking whether these funding backstops, that help even Goldman who may have been one of the spoilers of a private deal early on, ought to be paid for, when the RTC gets set up (if not sooner).
It's only in that way can we give any real-world credence to Martin Feldstein's notion that firms can actually weigh their collective interest, when considering the profit motive, to re-inforce the urgency of doing that during times of financial "crisis".
Friday, September 19, 2008
We should collect from the intransigents for these money market backstops
