Laurence J. Kotlikoff:
Recapitalizing the banks and working out mortgages will take time, but the financial system will not collapse -- the government won't let it.
The markets, of course, seem to be factoring in some probability of collapse. Why is this wrong?
In short, Uncle Sam is becoming our new bank. He has also become our new insurance company.
This may sound like socialism or state capitalism, but it's simply rearranging the financial furniture.
So after scaring us half to death, this would be a good time for our other uncles -- Hank and Ben -- to make clear that we're heading for a safe landing and that there is no way in hell they will let this economy go down the tubes.
If you shout it from the rooftops it becomes true.
