Bankruptcy, not bailout, is the right answer
Commentary: Bankruptcy, not bailout, is the right answer – CNN.com
Good article on why they should not bailout the banks.
Thoughtful advocates of the bailout might concede this perspective,
but they argue that a bailout is necessary to prevent economic
collapse. According to this view, lenders are not making loans, even
for worthy projects, because they cannot get capital. This view has a
grain of truth; if the bailout does not occur, more bankruptcies are
possible and credit conditions may worsen for a time.Talk of
Armageddon, however, is ridiculous scare-mongering. If financial
institutions cannot make productive loans, a profit opportunity exists
for someone else. This might not happen instantly, but it will happen.Further, the current credit freeze is likely due to Wall Street’s hope
of a bailout; bankers will not sell their lousy assets for 20 cents on
the dollar if the government might pay 30, 50, or 80 cents.
