He rightly castigates our political class but fails to clearly make the case that this bailout is (1)necessary and (2) sufficient to avoid a depression.
It's probably necessary to inject funds and liquidity at some places in the market to prevent it from locking up. I am skeptical that even 10% of the funds used for a bail out will actually go where they are needed.
“The real point is to avoid a major contraction of credit that could cause major downturns in output and employment, ruining millions of people, far beyond the financial institutions involved. If it was just a question of the financial institutions themselves, they could be left to sink or swim. But it is not.
We do not need a replay of the Great Depression of the 1930s, when the failure of thousands of banks meant a drastic reduction of credit— and therefore a drastic reduction of the demand needed to keep production going and millions of people employed.”