Paul Glastris on the need to avoid making decisions under pressure:
One of the classic mistakes we all make — and this is true of political leaders and average citizens alike — is to accept unquestioningly that the choices we’re being presented with are in fact the only choices we have. And so it was on Friday that Democratic leaders in Congress seemed to line up behind the Bush administration’s plan to have the federal government spend half a trillion dollars or more to buy up toxic mortgage securities held by banks and other institutions. It was a radical idea, suspiciously lacking in detail, and rife with taxpayer risk with moral hazard. But if it’s either that or the whole financial world melts down, the thinking went, what choice do we have?
As Paul observes, the crucial thing to note is that we do have options and alternatives — bailouts for homeowners rather than bankers is a possible scenario, it’s just not the one the bankers prefer.