As you can see from the comment thread it is still unclear how this is supposed to work in detail, and what the goal of the legislation actually is. But I'm personally on Krugman's "wait and see" camp. Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
I hope we're not going to have an argument then, along the lines "that's what Geithner meant to happen"/"no it isn't!" ;)
When Larry Kudlow says that a bank plan is terrible, my instinct is to wonder what brilliant part of it I had not previously noticed.
He also criticised the US and UK approach to bank bail-outs, comparing it with attempts by Japan in the 1990s to solve its banking crisis. "The current US and UK approach may end up looking like the zombie banks of Japan that were never properly restructured and ended up perpetuating the credit crunch and credit freeze," he said.
