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September 23, 2008

STEVEN LANDSBURG ARGUES AGAINST THE BAILOUT PLAN.

What's clear is that a bunch of financial institutions have made mistakes and lost money. What's unclear is why anyone (other than the owners and managers) should care. People make mistakes and lose money all the time. Restaurants fail, grocery stores fail, gas stations fail. People pick the wrong stocks, they buy the wrong cars, and they marry the wrong spouses without turning to the Treasury for bailouts.

Read the whole thing. And remember -- just because International A.N.S.W.E.R. is against the bailout doesn't actually guarantee that the bailout is a good idea.

Meanwhile, Christine Hurt comments on whether the bailout is a good idea: "That's the question I was asked by my fellow conferees at my non-corporate conference. My answer has to be 'compared to what?' . . . Would the market be able to right itself, after breaking more than a few Wall Street eggs, eventually? Not sure."

Plus this: "What's the easiest prediction to make from the financial crisis? More law school applicants."

Professor Bainbridge pulls together some other issues, and makes the Chrysler comparison.

UPDATE: Arnold Kling on crisis management: "My point is that strong leadership is bad, even though it is popular. I recently reminded readers of the bad consequences of the strong leadership of President Nixon's Treasury Secretary John Connally. I think that the current strong leadership coming from Ben Bernanke and Henry Paulson will prove similarly unfortunate. In the Presidential campaign, the candidate whose temperament is most conducive to strong leadership is John McCain. So far, Barack Obama comes across to me as cautious and cerebral. If I thought he would stay that way, then I would root for him in the election. However, my guess is that in the coming weeks his political instincts will lead him to remake his image into that of the strong, decisive leader that the public presumably craves."

And, from Virginia Postrel: "I will also note that private equity funds and hedge funds, which aren't subject to all this wonderful regulation, appear to be doing better than the rest of the financial world."

Is that because they know they could lose their shirts?

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