Yglesias on the Banks

Some solid common sense from Matthew Yglesias on bank bailouts, in response to a WSJ piece. Key quote:

You don’t rescue banks by “tak[ing] distressed assets off the balance sheet of Citigroup or other troubled financial institutions.” The problem isn’t the assets, it’s the debts. You can deal with the problem by giving the banks vast sums of money in exchange for their toxic assets but in this case what’s solved the problem isn’t that the assets came off the balance sheet, it’s that the money you gave them got on the balance sheet.

And the key lesson for Canada? You are either paying more than market value for the assets or you aren't doing much to help the banks.