I think I stole this idea from Wonkblog, but I thought it might be fun to start doing more with the books I get mailed. Like open to a random page and quote. I opened up Robert Kuttner’s Debtors’ Prison: The Politics of Austerity vs Possibility and came to page 167:
The form of bond purchases and of other rescues by the Federal Reserve has tempered the crisis in the United States, while the conditions attached to bailouts by the ECB and EU have exacerbated it in Europe. One can find fault with much that the Fed has done, most emphatically it’s failure to challenge the too-big-to-fail model in exchange for all the aid conferred on banks. However, the Fed has done one big thing right. When the Fed purchases the securities of the federal government or of banks, it does not demand disabling fiscal conditions. So its bond purchases serve as seals of approval and function to restore market confidence. By contrast, when one of Europe’s rescue mechanisms pumps money into a wounded government or banking system, it signals to markets that the recipient is in grave trouble. The amount of the aid is invariably too little and too late, and the conditions attached only deepen the crisis and depress market confidence. The doling out of small sums of aid pending good behavior creates an auro of chronic near default.
That sounds roughly correct to me, though there’s a tension between praising the Fed for its preference for unconditional assistance and condemning it for failing to impose more conditionality on “too big to fail” banks.