Redstate

He made quite a few commentworthy remarks yesterday, not least the bizarrely overstated point about disinflation. (Yes, it has some roots in the end of the Cold War. No, it hasn't been continuous since that time. Yes, most of the recent disinflation comes from globalization.) With the remarks about gifting money to distressed mortgage debtors, he recalls classic arguments advanced by Milton Friedman about welfare. Unfortunately he ignores moral hazard. (His statements makes clear that this omission is deliberate, since he says this solution would be "better for the economy," which is certainly true.) The other thing he neglects to mention is that he is now a private consultant, and counts among his clients people who would benefit greatly from a fire-sale of distressed mortgage assets. He also overlooks what is perhaps the most important benefit of the admittedly-flawed Paulson-Bush plan: it keeps the Democrats in Congress from enacting something far worse.