Here are the major takeaway points I found, and they're very good:
1. There was a non-bailout way to bail out AIG and Citi. Rescuing them wasn't a binary proposition: let them perish or save them by showering them with geysers of money, no questions asked. While some might call Ritholtz naive on his analysis here, I think the bottom-line point holds up: we could have struck a much harsher deal with firms such as Citigroup that were doddering at death's door.
2. A major problem in this financial crisis is that, as Americans, we like to avoid "ripping off the Band-Aid," as Ritholtz would say. In other words, we don't like pain. Agree completely.
3. The concept of "moral hazard" -- i.e., implicit government guarantees causing big banks to act more recklessly than otherwise -- has been scoffed at, but the truth is we've already seen it, Ritholtz notes. Lehman could have been saved earlier by Warren Buffett. Instead it said, "No thanks," expecting that the U.S. government would eventually sweep in with a sweeter deal.
4. The public company structure of the large banks WAS a significant problem in the escalation of risk-taking. I'm going to quote straight from Ritholtz on this last point, because it's a big theme that's emerging from this crisis, that giving people who like to play with money a warehouse of other people's money to play with can create big undesired consequences:
By the way, there was a huge amount of capital in private trusts and partnerships and private investments. Not one of those blew up. When it's a public firm, you can't go after senior executives' personal assets if it collapses. But if it's a private operation, you can. And none of the guys with their own money on the line went belly up.