Ken Rogoff on the wisdom of the bail-out

posted in Ecnomist's View. This is a debate which I have difficulty following.But it affects all and we do vote. I think that one has to make an effort to follow and get some feel for the 'main' inicators in the debate. More technical discussions are in blogs like 'Naked Capitalism' linked earlier. At the moment, the feel I get for the debate is similar to the one expressed by Ken Rogoff in the above article which Dani rodrik also approvingly mentions. Here is a passage from the article:
"Does such nitpicking fail to recognize the urgency of fixing the financial system? Isn’t any plan better than none? I, for one, am not convinced. Efficient financial systems are supposed to promote growth in the real economy, not impose a huge tax burden. And the US financial sector, in greasing the wheels of the real economy, has been soaking up an astounding 30% of corporate profits and 10% of wages. ... Isn’t it possible, then, that rather than causing a Great Depression, significant shrinkage of the financial sector, particularly if facilitated by an improved regulatory structure, might actually enhance efficiency and growth?"
The full article is linked in Mark Thoma's post. A passage from the original article:
"This brings us back to the US treasury’s plan to spend hundreds of billions of dollars to unclog the subprime mortgage market. The idea is that the US government will serve as buyer of last resort for the junk debt that the private sector has not been able to price. Who, exactly, does the treasury plan to employ to figure all this out? Why, unemployed investment bankers, of course!"