Paul Krugman on tarnished image of America

66.

March 30, 2009 7:56 am

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Right or wrong, America cannot lead the world unless it takes credible economic steps at home. The President did not draw the right conclusions from the A.I.G. bonuses scandal. The public outrage was certainly justified. Managers of failed corporation should not ask for taxpayer bailout and pay themselves bonuses as a reward for their failure. The significance of it exceeds the moral issue. The heads of A.I.G, fairly intelligent individuals, must have been aware of possible public protest; however they took the money because they lack belief in the economic steps of the government. They insisted on the bonuses because they considered them as the last recourse to a golden parachute. Still, the Administration believes that they should continue as leaders of the by now practically government owned major corporation.
Mr. Obama and his team subscribe to the economic view of Mr. Bush and Mr. McCain, whom they ridiculed during the campaign. According to this, by now rather universal view, the economy is basically healthy, except for the banks. Providing the banks with petty cash of several trillion dollars or more will bring everything into status quo ante. Even if the economy is healthy, keeping the banks as they are, as a system and with the same management will ruin it.

— Aharon Meytahl, Vestal, New York