October 11, 2008

When in a deep hole …

… the best thing to do is to stop digging. That’s Washington Post Pulitzer Prize winner Steve Pearlstein’s advice about what to do next.

He also reminds us:

“As we should have learned long ago, markets are not self-correcting. They require collective action to put them back into working order.”

Steve is a realist, not an ideologue:

“… at this moment what's most needed is to direct the capital toward the biggest institutions that present the biggest risk to the stability of the rest of the financial system, whether they are banks, investment houses, insurance companies or non-bank lenders like General Electric.”

“Wouldn't that be picking winners and losers? In a way, yes. But remember that the reason we are in this fix is because markets, at least for the moment, are broken and can't be relied on to allocate capital more wisely than Hank Paulson. A little bit of well-timed, well-crafted socialism is just the thing to save capitalism from itself.”


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