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Saving Major Banks

By Anonymous

Matt Yglesias tries to be too clever for his own good:

I, for one, don?t think that "saving" the too-big-to-fail financial institutions is or was among the legitimate purposes of our financial policy. The idea is?or at least ought to be?that we?re trying to prevent them from failing in a way that causes everyone else?s business to go under.

Is there some secret way, known only to Matt Yglesias, to prevent a major bank from failing in a way that causes everyone else to fail as well?

No. Not even close. Until there is (and I doubt there ever will be), "saving" too-big-to-fail financial houses will continue to be a legitimate purpose of our financial policy.

Full post as published by Economics of Contempt on March 20, 2009 (boomark / email).