Last week, the $700 billion Wall Street bailout plan was universally panned as a horribly-bad, no-good idea. This morning, with that safety net yanked out from under the economy, criticism has swung to the U.S. Congress for its failure to approve the awful deal. This is a no-win situation if there ever was one.
One thing is painfully clear now: there really is no easy way out of this mess. The bailout may be a bad idea, but the alternative isn’t pretty either (if yesterday’s market free-fall was any indication). So here’s a question: what is the best case scenario? I tend to agree with this one, from the economists’ blog Marginal Revolution: “The American economy is in recession for two years and unemployment does not rise above eight or nine percent.”