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Bankruptcy vs. Bailouts--Skeel

Readers of this blog are no doubt tired of hearing me argue that bankruptcy would often be a better solution to the financial distress of large financial firms like AIG or Bear Stearns than the bailouts the government has used throughout the current crisis.  But for those who haven't yet had enough, or are interested in a more scholarly treatment, here is a link to a paper by Ken Ayotte and me about the bankruptcy vs. bailout choice.

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Comments ( 1 )

Absolutely! If the tax payers can't be bailed out then neither should big business.

And some of the companies just used the money to buy other companies, so it's obvious they didn't need a bailout anyway.

Chris