Will the New Bailout Plan Work? A Skeptical View

John Cochrane of the University of Chicago has some very cogent comments on the financial crisis and the recently-passed bailout. (Hat tip to Freakonomics blog.)

Cochrane has a good analysis of the current problem, though I think he may underestimate the number of healthy banks out there.  I say "may" because neither he nor I really know.  There's good data as of June 30, but no official statistics that reflect the dismal summer.

He is very negative on the bailout bill.  I was never a fan of it, but I'm not quite as skeptical, perhaps because I can envision it helping the banks that need it the most.  Perhaps I'm being overly optimistic.