NEW TECHNOLOGY

In today's NYT story on today's Geithner bank bailout plan, there was this interesting nugget:

In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the president, according to administration and Congressional officials. ... He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.

Me: In other words, Alexrod and other political aides wanted to do the exact thing that economists fear would happen as Uncle Sam intervenes more and more into the financial sector. And this is why nationalizing banks is such a terrible idea. The efficient allocation of capital is the function of the banking system. And that certainly can't happen if decisions are being made for political reasons.