Holman Jenkins makes a really smart point in the WSJ this morning:
Bailouts, remember, are an informal substitute for bankruptcy, with its messy and prolonged division of the leftovers. Bailouts create moral hazard, all right, but how much really? Bear Stearns shareholders' experience isn't one other shareholders are keen to repeat. Meanwhile, the real moral hazard disaster lies elsewhere—in the degree to which, in order to avoid being confronted with the bailout question, Washington has relied on monetary policy to contain incipient financial markets crises.
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