Thursday, September 25, 2008

History repeating(itself)

Helena Cobban: "China and Japan's stakes in the US financial crisis"
as well as,

"China's condition to bail out the US: Taiwan?"

Andrew Leonard in Salon, "Not so fast, Secretary Paulson!"

look past the florid ridiculousness of Leonard's opening paragraph("this kind of profound remaking of capitalism..." ), as well as some(OK, many) of his assumptions, to this worthy passage:

You don't often find a Democratic senator and a University of Chicago free-market true-believer economist on the same side, but Luigi Zingales' widely circulated "Why Paulson Is Wrong" essay provides strong support for the idea that the government should get a piece of the action, framed in terms of debt forgiveness in exchange for equity.

Zingales argues that a reduction in debt can benefit both equity holders and debt holders because "there are real costs from having too much debt and too little equity in the capital structure." But debt holders tend to resist government-ordered debt forgiveness for the very simple reason that a government bailout is a preferable solution, for them.

Daniel Gross in Slate, "The Political Cowardice and (Hypocrisy)of the Wall Street Bailout"

Congress and the president favor a $700 billion Wall Street bailout, but they're afraid to say how they'll pay for it...

Xymphora: "Then they came for the Lehman Brothers, and I did not speak out - because I was not a Lehman Brother"

(not his best piece, but the title is irresistible.)

Mahmoud Ahmadinejad, to the UN: "American empire in the world is reaching the end of its road, and its next rulers must limit their interference to their own borders"

cross-posted at HZ

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