[lacker]

You don't think the Fanny bailout "worked"? We don't have the luxury of seeing what would have happened if we hadn't bailed them out.

To make the pro-bailout argument more clear, here is one reputable economist predicting that if we had let the FMs default, the dollar would drop about 30% and unemployment would double, in about a week.

http://www.marginalrevolution.com/marginalrevolution/2008/09...

[ojbyrne]

You're correct, I was glib. But I think those things will happen anyway - they'll just take longer than a week.

[byrneseyeview]

So it would be like a 19th-century panic/recession, without hard money. He's omitting the part where, since we aren't subsidizing stupid decisions, stupid decisions don't get made and the economy recovers very quickly.

[lacker]

If only subsidizing nothing was sufficient to prevent stupid decisions from being made!