A Stitch in Haste

There's not much to say, and I said it here:

There is a difference between "bailing out" and "underwriting the orderly liquidation of." The Fed, via JPM, is doing the latter, not the former.

A perfectly reasonable libertarian case can be made that neither undertaking is a legitimate function of government (just as it is not a legitimate function of government to use the tax code or monetary tools to foster home ownership in the first place). But there is nevertheless a substantive difference between the two forms of intervention.

For who require analogies: Rescuing the FSLIC (a government program, incidentally) was "bailing out"; the Resolution Trust Corporation was "underwriting the orderly liquidation of." Saying "this is just like the S&L crisis" achieves nothing (other than to prove one's ignorance about the subject).