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This time from Arnold Kling:

Let me make some remarks that are sufficiently flip to assure Tyler that I should never be president.

  1. Firms are laying off workers that they probably should have laid off months ago, and they should not hesitate to do so.
  2. It is ok for consumers to cut back on their spending; they should not feel they need to go out and spend to “help the economy.”
  3. Many home buyers are defaulting on their loans, which results in foreclosures, and government should not interfere with that process.
  4. In many parts of the country, it makes sense for home builders to curtail activity until excess supplies of houses are absorbed.
  5. Auto companies need to renegotiate their obligations to retired workers or go into bankruptcy and let the courts sort it out.
  6. State and local governments need to renegotiate their obligations to retired workers or put the matter before legislative bodies and make hard choices.
  7. Banks that are definitely insolvent need to be merged with healthy banks or closed by the FDIC.
  8. Banks that are possibly insolvent, depending on the value of illiquid securities, need to be placed under close regulatory supervision.
  9. New activity by Freddie Mac or Fannie Mae should be frozen. If banks don’t want to make mortgage loans, then teenagers don’t want to flirt.
  10. The Treasury does not know what it is doing with its $700 billion in spending authority, so it should stop doing it.

Once the various excesses have been eliminated from the system and markets are back in balance–especially housing–we’ll be fine.

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