There continues to be a semi-popular line of counterintuitive analysis holding that the entire financial markets crisis is some kind of fraud trumped-up by firms who want to get their hands on some of the $700 billion honeypot. For anyone who thinks that, a free trip to a European country with a finance-heavy economy would be instructive. Talk to people in the finance game on this side of the Atlantic and you’ll hear a lot of displeasure with the way European governments are handling their end of the bailout. Long story short, it’s much less of a sweet deal for the firms involved than what Paulson, Bush, and co. have been doing in the United States with much more onerous strings attached. As might be expected, they think a more generous US-style approach would be better.
No reason to take them especially seriously on that. But what you should take seriously is that they very strongly favor the bad deal they’re getting to do deal at all. And that’s because the crisis is very real. The fact that the crisis is real doesn’t mean that special interests won’t try to corrupt the process and get as much as they can. But at the same time, the mere fact that special interests are trying to corrupt the process doesn’t make the underlying issue some kind of fiction. What’s needed is vigilance and good policy, not paranoia and ignorance.
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