Monday, October 13, 2008

Peer Pressure and the Right Thing to Do.

Krugman in NYT:

At a special European summit meeting on Sunday, the major economies of continental Europe in effect declared themselves ready to follow Britain’s lead, injecting hundreds of billions of dollars into banks while guaranteeing their debts. And whaddya know, Mr. Paulson — after arguably wasting several precious weeks — has also reversed course, and now plans to buy equity stakes rather than bad mortgage securities (although he still seems to be moving with painful slowness).

...It’s hard to avoid the sense that Mr. Paulson’s initial response was distorted by ideology.