That’s not what the World Bank/IMF recommends. According to them, it’s always better to flush out the inneficiencies and corruption. Let the bad apples rot instead of putting them on ice.
I’m not aware of these World Bank/IMF recommendations. After what their recommendations did to Russia in the 90’s, I’m not inclined to put much weight into their recommendations, anyway.
Bad apples will rot. Healthy levels of inflation aren’t going to bring back the subprime MBS market and aren’t going to do much to help homebuliders. The only thing that would do that is hyperinflation (double digit growth in per capita incomes year after year), that’s not what I’m advocating and that’s not what we’re getting from the Fed. Do we want Home Depot and Starbucks to go down with Countrywide and Lennar because their unemployed potential customers are forced to cut down on discretionary spending, or do we want to spread just enough money around to keep Starbucks afloat while Countrywide and Lennar declare bankruptcy?
