Krugman: "If This Were a Dictatorship Things Would Be Easier…Just So Long As I’m the Dictator (Heh Heh)"
No, he didn’t literally say that; who the heck would literally say that?!
Even so, Krugman has bared his inner Mussolini as of late. Like Matt Yglesias, Krugman comes just shy of calling for the abolition of the Senate (though in fairness his post is far more tongue-in-cheek than Yglesias’). And in today’s post, Krugman laments that Tim Geithner paid full price for bank assets during the AIG bailout instead of saying to them (strikethrough in the original):
Also, individual banks are in a long-term relationship with the public and the government. They have an interest in preserving that relationship. The Epicurean Dealmaker offers an imaginary speech that
Tim Geithneran anonymous government official could have given:[T]hose people and institutions in this room which did not help us, which put their own narrow personal and corporate interests before the interests of this nation and its people, will be remembered as well.
And let me tell you something, gentlemen, banker to banker: you do not want to be on that list. That list will be a world of pain. That list will be Death.
Indeed. Bear Stearns famously refused to participate in the rescue of LTCM — and it’s widely believed that the lingering bad feelings from that exercise in free riding had a lot to do with the firm’s demise last year.
I encourage you to read the post. (Just to clarify, Krugman is lifting that hypothetical speech from the link. But he’s obviously agreeing with the basic idea.) Not a single word about the possible downside of having regulators threaten banks in this way. Nope, Geithner’s failure to do this–and let’s just pretend for a moment it was because of his timidity, and not because the whole )(*#$#$ point of TARP was to shovel hundreds of billions to bankers–is bad because it weakens the public’s faith in government bailouts and stimulus, leaving the whole economy at risk if there is another downturn.
