(Guest post by Greg Forster)
As the evidence piles up, I’m moving closer to abandoning my studied neutrality on the bailout and joining Jay and Matt in opposing it. I still lack the expertise to evaluate the claims that there’s a credit panic, that markets behave irrationally during a panic, that panics turn into crashes, and that it is possible for government to prevent the crash by acting as a sort of substitute rational investor during a panic. But whether or not government intervention can counteract a panic, it’s looking more and more like that isn’t what’s happening.
Today’s datum? GM is buying Chrysler partly so that it will be considered “too big to fail.” (HT Jonah Goldberg)
Since I first saw this in The Corner, I’ve been meaning to post it, but haven’t gotten around to it. Glad I waited – now I can also direct you to America’s MVC (most valuable columnist), Holman Jenkins, whose Wall Street Journal column this morning discusses the case.
Credit was never frozen. http://www.minneapolisfed.org/research/WP/WP666.pdf
That was a myth created by Wall Street to get the money, politicians to centralize control, and the media so they could happily claim capitalism has failed.