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"How to Lift a Falling Economy"
Economist's View — ... How to Lift a Falling Economy, by Ricardo J. Caballero, Commentary, Washington Post: ...Since Treasury Secretary Timothy Geithner's recent announcements, shares of the main U.S. financial institutions have imploded yet again. The Dow Jones industrial average keeps falling. And to make matters worse, politics has decidedly entered into the process of economic policymaking... Talk of nationalizations has become widespread, as if government takeovers were a panacea, further reinforcing the deadly spiral of fear and panic. ... ...

Springtime for Banks
The Baseline Scenario — ... proposal in both the FT and the WSJ on the same day, Ricardo Caballero has a new proposal for solving the banking crisis, this one in tomorrow’s Washington Post. ...

U.S. Lawmakers Clash Over Nationalizing Banks to Stem Declines
Short-Term Trading — ... into the process of economic policymaking, which makes it all the more likely that we will end up with the wrong policy response, one that is probably too late anyway. Talk of nationalizations has become widespread, as if government takeovers were a panacea, further reinforcing the deadly spiral of fear and panic". "Here is a proposal: The government pledges to buy up to twice the number of bank shares currently available, at twice some recent average price, in five years". Washington Post This last one is an interesting article. To read. Financial Select ...

The U.S. Didn’t Cause the World Recession
Cato @ Liberty — ... In the Washington Post, Ricardo Caballero of MIT has a novel and promising idea about “How to Lift a Falling Economy.”  Unfortunately, he echoes the mantra that all the world’s economic problems can be traced to the U.S. in general, and to big U.S. banks in particular.  “Already,” he says, “this illness has spread to the global economy.” ...