Wednesday, September 24, 2008
His doom should quick be knelled;
He should not be allowed to grow,
If grown he should be felled,
But when a city's bonds fall flat,
And no one cares for them,
Who is the man who saves the day?
When banks and trusts go crashing down
From credit�s sullied name,
While Speechifying Greatness adds
More fuel to the flame,
When Titan Strength is needed sore
Black ruin�s tide to stem,
Who is the man who does the job?
McLandburgh Wilson, in the New York Times, October 27, 1907, from the last time we let the private market take care of the problems of faltering banks. J.P.M. is of course J.P. Morgan, who acted as a private lender of last resort. Read the rest. See also this. The graph to your right is what happened to per capita GDP (annual change) when we tried that.
Is Buffett the new J.P.M.?
Is that 10% drop in per capita GDP the deal you want to make in order to let them fail?