As in warfare, there needs to be a plan and discipline for maximizing success, minimizing risk — and a sound exit strategy.
This must be a short-term effort. It must not cost more than necessary, while those who performed badly should be punished. And, it should generate a return on investment.
As long as we’re using such “overwhelming force....”
I agree.
My main point is that it is not appropriate to leap from “I really hate seeing this bail-out happen” to “we should do nothing.”
IOW, emotional reactions to the place at which we find ourselves is no justification for not doing what we have to do because of the place at which we find ourselves.
And talk about “overwhelming force”:
While perusing the business channels today, several analysts talked about this vaunted $700B “price tag.” The bottom line, as I understood it, was that Paulson is asking for $700B in *spending authority.* This does not mean that this amount will be spent or will be spent in a short timeframe.
Several analysts referred to a comment by ? that the $700B spending authority was designed to serve as a “bazooka”-—one said, no, it’s an ICBM!-—to show the world that the U.S. is “armed and ready” to fix this problem. IOW, it is designed to be enough to *inspire confidence* in the markets that the U.S. is committed to stabilizing liquidity in the market.
So, in essence, the size of the “bail-out” (the *spending authority*) is a “show of overwhelming force.”
It’s important to understand that, just as in warfare, there’s a psychological dynamic to the use of force (power) as well.