Paul Krugnan: In the US, Decidedly Warped Standards for "Mission Accomplished"

Thursday 8 December 2011

 

Matt Yglesias and Kevin Drum say the right thing about revelations that big banks got very easy terms during the 2008 financial crisis: the real scandal isn’t so much that those banks got rescued as that the rest of the population didn’t.

Recently, in an article for Slate titled “How the Fed’s Generosity Made $13 Billion for America’s Biggest Banks,” Mr. Yglesias writes: “It was always clear that massive emergency lending of some kind was going on and also that some people would regard this lending as a dastardly ‘bailout’ that kept banks in business. But what’s really coming into view now is that this lending was not at a penalty rate. It was ultra-cheap money that allowed banks to earn profits designed to help resolve fundamental solvency problems.”