More Links to Bailout Commentary

1) Text of the Dodd Proposal.  Bloomberg summarizes it.

2) Paul Krugman likes the Dodd proposal, mostly because it gives Treasury equity in firms it rescues.  This is one of my conditions for making the Paulson plan work.  I was naive though: left to his own devices it's not clear Paulson would have pursued this.  From his "quick and clean" language I doubt it.  So I wasn't describing the Paulson Plan after all.

3)  James Hamilton, via Brad DeLong

4)  Calculated Risk, via James Hamilton

Question:  At what point are you screwing the bankers so much--diluting their equity, cancelling compensation arrangements--that they say forget it and refuse to sell you the bad paper, which is the point of the exercise in the first place?  Paulson's economist critics may underestimate this.

Comments

[Hubert Spegel]

Nadav,

if they do not take the money from the Feds and go belly up instead they should go to jail.
Not going to jail is an even better motivator than money.