Why Bail? The Banks Have a Gun Pointed at Their Head and Are Threatening to Pull the Trigger

I've heard lots of phony stories. Much of the country's political and economic leadership has been running around raising the prospect of the Great Depression and a breakdown in the banking system (I actually had taken the latter seriously). These stories are absolutely not true.

There is no plausible scenario under which the no bailout scenario gives us a Great Depression. There is a more plausible scenario (but highly unlikely) that the bailout will give us a Great Depression. There is no way that the failure to do a bailout will lead to more than a very brief failure of the financial system. We will not lose our modern system of payments.

At this point I cannot identify a single good reason to do the bailout.

Posted in Econ & Money: Mortgage Mess | Comments Off

Got Milk?

Posted on September 29, 2008 by Michael Froomkin

Caroline Bradley asks some worrying questions about melamine in our food supply in (not) understanding food risks.

Here's how it starts,

Reading the recent news about melamine contamination of foods produced in China, and remembering how friends with pets dealt with last year’s pet food melamine contamination problem, I wonder how worried to be. A story which began with problems in infant formula spread to other products made with milk as an ingredient. For example, White Rabbit candy, which, according to the Wikipedia entry has been marketed as a healthy product, is one of the products affected. In deciding how worried to be I would like some data on the risks. The FDA website has a reassuring press release. This morning, the Europa website’s press release page showed a release from the European Food Safety Authority (EFSA) with a link to a detailed statement assessing the risks (unfortunately, since I first saw the press release it has been pushed off the front page by other news). I’d far rather have details than platitudes, even where the details don’t in the end help me very much.

It doesn't help that this administration probably isn't capable of telling if there's a danger or not, much less leveling with us about it.