Keynes

On the failure of Keynes.

I have an alternative explanation: Credit froze because all over the country defaults on mortgages, car loans, student loans and credit cards were reaching historical highs. Letting Lehman die was Henry Paulson’s single act of courage, and he followed it up by doing what he does best: soiling his Depends and scaring the children with wild tales about the bank failures, derivative defaults and lover’s lane murderers that would be unleashed if the taxpayers didn’t give a trillion dollars to the largest banks on the planet. The entire ethical structure of the free market was destroyed so that Sheila Bair could be spared the inconvenience of euthanizing crippled, syphilitic ghouls like Citigroup and Bank of America.

Ouch.