From Paul Krugman's blog:
Henry Paulson, September 23:
Some said we should just stick capital in the banks, take preferred stock in the banks. That’s what you do when you have failure. This is about success.
Me, September 21:
[S]houldn’t the public intervention also be at stage 2 — that is, shouldn’t it take the form of public injections of capital, in return for a stake in the upside?
Let’s not be railroaded into accepting an enormously expensive plan that doesn’t seem to address the real problem
I’m not claiming special insight here — a number of economists arrived at the same conclusion. What’s striking is the way Treasury misfired, yet again.
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