Harold Meyerson looks at the last time one man solved a financial crisis:
It was there, 101 years ago, that J.P. Morgan -- in part through the sheer force of his own character, not to mention his intellect and his economic clout -- summoned New York's other major bankers, locked the doors, and did not let them go until they sifted through the balance sheets of failing banks, decided which to bail out and which to let die, and put up the money to make it all happen. (It was 4:45 a.m. on the night in question when his fellow bankers succumbed to his pressure and Morgan finally unlocked the doors.) Thus was the Panic of 1907 abated.
Robert Kuttner wonders why deficit hawks are suddenly dovish:
On this issue, the only difference between the two parties was that the Republican deficit-phobes wanted to reduce the red ink by cutting social programs while the Democrats wanted to raise taxes on rich people. I wrote about the danger that deficit-obsession would pose to an Obama administration in a recent Prospect piece, and in my book Obama's Challenge.
But that was then. All of sudden, an administration that can't find a spare nickel for children's health, repair of decrepit infrastructure, education aid, green energy, and other useful outlays is proposing to increase the deficit by more than four percentage points of GDP, because Wall Street made some bad bets. And Treasury Secretary Henry Paulson blithely explains that this gargantuan increase in the deficit is no biggie, because some of it may even be paid back. What a difference a meltdown makes.
And Robert Reich considers whether the bailout will work:
Bottom line: Unless Americans on Main Street have more money in their pockets, Wall Street's bad debts will continue to rise -- which means the Bailout of All Bailouts grows even larger, which means taxpayers take on even more risk and cost.
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