From Plan A to Plan G

J Bradford DeLong: Will partially nationalising US banks stave off a depression?: From Plan A to Plan G: The US has tried to stave off depression in half a dozen ways. Will partially nationalising America's banks do the trick?

The Bush administration, having entered office as social conservatives, leaves office as conservative socialists, proprietors of the most sudden large expansion of the state's role in the US economy since mobilisation for the second world war.

Why did they decide to partially and quasi-nationalise America's banks - to invest $250bn in preferred stock plus warrants and tell the banks that it wanted them to use the capital to expand their loan base rather than contract it via deleveraging? It is certainly not what Henry Paulson signed up as Treasury secretary to do.

(via Marginal Revolution)