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http://moneynews.newsmax.com/streettalk/robert_shiller/2008/08/29/ 126095.html?s=al&promo_code=68CB-1

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He says that Jay Westbrook, a bankruptcy scholar at the University of Texas, has a good suggestion for repairing the bankruptcy code.

“He (Westbrook) said the law might be changed in innovative ways so that in times of financial crisis, when more is at stake than the fate of individual companies and their stakeholders, troubled companies could be kept functioning longer,” Shiller writes.

My comment: "kept functioning longer" - and then what?


“A subsidized system of triage would be needed to identify which companies should be saved, with the main criterion being the possible economic impact of their liquidation.”

Flexibility represents the paramount issue, Shiller maintains. “In this country, we seem to get things right eventually,” he says.

“But the problem seems to be that the narrow specialties that develop to deal with economic crises tend to be effective in specific settings. And then they become dated as soon as the settings change.”

My comment: the author assumes that there is a top down solution, if only one is bright enough to find it and adept enough to implement it. He does not even consider the wisdom of "the invisible hand" because it is invisible to him, and gets lost in "narrow specialties" and lack of flexibility when "settings change." Of course he is talking about government solutions and laws. Flexibility is precisely what the invisible hand offers.

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