More Bainbridge

More Bainbridge:

I’ve waffled on the bailout, but the more facts I’ve learned about the current state of the financial sector, the more I’ve come to the reluctant conclusion that this is one of those projects so big and with so much at risk that government intervention is justifiable.

Too big to fail is bad public policy. But I’m persuaded that the very real prospect of too many to fail presents an entirely different question. We are faced with a situation in which a systemic credit freeze will take down not just one or two banks, but many, including not just Wall Street but also local and regional banks. In turn, as more banks fail, it will become increasingly difficult for non-financial businesses to borrow. The ripple effect could be disastrous: