tag:blogger.com,1999:blog-8599274.post4301563918167925978..comments2024-03-20T08:25:38.195-04:00Comments on Chew Your Grouse: DemonsCleric Mikhailovich de Troihttp://www.blogger.com/profile/11074937604933464852noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-8599274.post-4945152394168354062008-10-09T21:29:00.000-04:002008-10-09T21:29:00.000-04:00I understand that financial intermediation is cruc...I understand that financial intermediation is crucial to the economy. What I don't understand is why <I>this particular set</I> of financial intermediaries is so important. If they all crater, will the role of financial intermediary somehow become impossible to fill?<BR/><BR/>Even if we assume that some sort of government intervention is necessary, there are lots of alternatives that are better than TARP. There are reasons why so many economists were opposed to that plan, like moral hazard, the fact that it ignores the shadow banking system, the fact that buying troubled assets at market valuations won't actually make any of these banks better capitalized, etc. With that context it's difficult to see Paulson's plan as anything other than a giveaway to Wall Street incumbents.Anonymousnoreply@blogger.com