Thursday, October 9, 2008

Temporary Nationalization of Banking System is on the Table

Here, Krugman thinks Hank Paulson is on board now on this rescue method.

I have suggested similar strategies two weeks ago
. We only know that tight monetary policy will help to kill the economy for sure, learned from the great depression. But to prevent this falling economy from drop-dead, a heavy dose is not a bad choice since we don't actually know what rescue plan can work. On the other hand, may be the true market solution is simply left the banking system to die as it deserve. The problem is that we cannot ensure ourselves from not taking on so much risk again once the current system is revived.

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