The Triumph of Politics over Economics:
Not much more to be said about the bailout bill going into law. Load it up with lots of goodies and you can buy lots of votes. Keep stoking the fires of “crisis” while you do to make sure the public is sufficiently confused. End result? De facto nationalization of a huge hunk of the credit markets. To use Pete’s terms, this was a major victory for the “forces of stupidity.” Let’s hope the “forces of innovation” can make a comeback.
I note that the Fed lowered interest rates to help ease the credit freeze. How is lowering interest rates supposed to encourage banks to lend? Lowering rates encourages borrowing; higher rates make lending more lucrative, right?
I’m sure there’s some sensible explanation…