Burlaki on the Thames defends the bailout

The Burlaki on the Thames blog defends the Emergency Economic Recovery Act of 2008 (a.k.a. TARP):

The objections to the plan run mostly along the lines of “how can we spend so much of taxpayers’ money to let those who caused the whole mess off the hook?” I happen to think that that point of view is terribly misguided.

You know who is going to suffer the most if the current financial crisis keeps spiraling downwards? The middle class. Not the rich — they will simply become less rich, but stay rich nonetheless. Not the poor — please forgive me my inadvertent snobbery, but the poor have little to lose, by definition. The middle class, conversely, will lose a lot when the corporations and consumers tighten their belts and spend less and less. A florist will not be able to sell her stock of roses, a waiter will earn fewer tips, a fledgling online business will see fewer orders. Thousands of corporate soldiers will be out of jobs. ...

The Great Depression destroyed a few financiers. It destroyed a lot more of Average Joes. ... Shouldn’t we be trying to take some action?