DeLong's False Choice
“We have to ask ourselves: Do we want to revive our economy, or do we want to punish the bankers? . . . I don’t agree that we can do both.”
Punish the bankers? How? By not bailing them out and putting their universe back together again at taxpayer expense? This is sheer sophistry from DeLong. The government could in fact do nothing - not punish the bankers, and let their banks fail. Because that is what many have - failed banks.
More . . .
But that would be bad policy in my estimation. The financial system must be restructured and put in working order. What the debate is about is how to do this. No one is arguing for "punishing the bankers." We are arguing about how to fix the financial system. To DeLong, not putting the banks back as they were, at taxpayer expense, is "punishing" them. DeLong protests that Tim Geithner is not a creature of "Wall Street." Perhaps, but DeLong sure sounds like one to me in that quote. Being familiar with DeLong's views on the matter (he favors nationalization of insolvent banks), I can not believe he actually said that. But it is clear that DeLong has decided to carry water for Geithner, and no doubt this difficult task can lead to the type of sophistry he engaged in there.
Speaking for me only
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