The end of the series and where I get into the really wishful thinking.
Ever since the meltdown a week or so back, economists and Wall Street analysts have been thinking and talking about a variety of alternatives to the Paulson plan and fortunately for me, these people have been writing all over the internet. I’m sharing some of the ideas I’ve read as links below, because we were all deprived of the opportunity to think about and weigh any options. Again, I don’t doubt that there is a real crisis here. And maybe we need to put some money into a fix. But if something is to be done, it should be in a way that actually provides some reassurances that we won’t be back in the same bind anytime in our lifetimes. And if something is to be done, then Congress and the Administration can speak to us like the tax-paying adults we are to ask for some considered support, and not more fearmongering. So here goes:
Nouriel Roubini runs a highly regarded newsletter and he has been telling the world the sky is falling for more than a year now. A thing that got him vilified by the financial press. But he locates some of the historical problems with the Paulson bailout and provides more discussion of his own recommendations. (Normally this is a paid newsletter, but he has opened it up for this time being.)
Barry Ritholtz’s solution focuses in in trying to fix the toxic mortgages.
Brad DeLong has been talking up a nationalization program that worked well when Sweden was hit with a meltdown similar to ours. If you read Krugman’s blog over at the NYT, he has been speaking pretty favorably about this. (EDITED to fix link — thank you Geek’s Dad!)
The WSJ wants to know why we can’t replicate the lessons of Buffett’s deal with Goldman Sachs.
Time presents the view of a couple of economists who argue that letting the banks fail may be tough sledding, but is the long term solution.
And then there’s Joseph Stiglitz who I posted about in Part II and who also finds something to think about in the Swedish plan and the Buffett approach.
There’s plenty more, certainly. Perhaps you’ve read of some and want to share them here. But the bottom line is that there are serious and real alternatives that address these issues in a more systemic and permanent way than throwing good money after bad in a way that seems absolutely a path to making sure we are back fixing it all again.
Unfortunately, I still think that the alternatives out there are not going to see the light of day except among those among us who have become obsessive about looking for them. If Stephanopolus is right, the Administration’s and Congress’s focus is going to be still on the solution that Paulson framed. Except this time it probably gets porked up with repub handouts. If I were Pelosi, I think that I would be pushing a Plan B that at least gets the dike fixed enough to get room for real hearings to listen to all of these folks who were knowledgeable enough about the situation to be ready to discuss multiple options to address the problem. Bet they were ready to speak to legislators too. But a bandaid would likely be passed with a D majority and get all of us some time to weigh additional options.
ADDING — And Now For Something Completely Different. Won’t raise enough money, but I can imagine this would be satisfying.