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September 17, 2008

Matt Yglesias raises some interesting questions about the recent string of government bailouts/takeovers.

On a perhaps less jokey note, I’m a little surprised to learn that this is legal without some kind of legislation. It seems pretty far afield from the Fed’s traditional domain. I guess in a storm people don’t care about the niceties.

Meanwhile, these are some pretty big companies the government now owns and, among other things, this raises the question of how these companies are going to be run. There could be an effort to manage them in the broad public interest or out-of-control crony capitalism or something like the situation in present-day Russia. It seems to me that there this step has uncertain implications far beyond the world of high finance.

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