LyrArc Article Gist
The NYT raises questions about the stress tests. It asks whether the modest economic bounce that may or may not occur, and amix of policy actions- such as the capital infusions into banks, fiscal stimulus, and other government interventions- will revive the banks? And says its not sure at all. Questioning whether the lack of stronger government action was a wise move by the Obama administration, in the same manner as three experts Hubbard, Scott, and Zingales did in an oped piece in the WSJ last week, the NYT editorial says, "what is known is that buying time, rather than forcefully intervening to restructure weak banks, can be a dicey gambit." See the link to Hubbard. Hubbard and his colleagues say that President Obama has the wrong Roosevelt in mind, its not Franklin but Theodore he should be looking to, and his admonition to talk softly but carry a big stick. It also raises the question about the regulatory reform, and the government oversight, that as Krugman noted in a piece last week, is receiving only a weak response from the Obama administration, and the dangers of going back to "business as usual."