Wednesday, August 22, 2007
Welfare for Zillionaires
In The New Yorker this week, James Surowiecki takes the heretofore little-espoused view that bailing out high-flying hedge funders is probably a bad idea in the long run:
His conclusion? The Fed doesn't need to do any more cutting, and the short-term panic won't bleed over into the larger economy. Having no understanding of markets, I have no idea whether this is right, but I'll be watching to see how this plays out.
[T]here is something unseemly about watching the avatars of free-market capitalism rely on the government to pay for their bad bets. And there is something scary about contemplating the even bigger bets they’ll make in the future if they know that the Fed is there to bail them out.
His conclusion? The Fed doesn't need to do any more cutting, and the short-term panic won't bleed over into the larger economy. Having no understanding of markets, I have no idea whether this is right, but I'll be watching to see how this plays out.
Permalink posted by Jonathan : 11:07 AM
