Holes In The Firewall

Megan on the Citi bailout:

I don’t want to be a self-panicker; these things take time.  But I’m becoming increasingly convinced that the original theory of the bailout–that it would step in and provide a firewall to prevent future failures–has been proven wrong.  I still think it was worth trying, prospectively; there seemed to be at the time, a reasonable prospect that it would save money in the long run by forestalling the need for future bailouts.  But in hindsight, it hasn’t worked.