> Changing the rules of massive bilateral agreements to benefit one party over another tends to blow confidence in the system.
I suspect "confidence" isn't an accurate word to describe the current aggregate sentiment of people towards the system.
> Investors would start trying to guess which asset class will next be amended, thereby triggering runs across the market. (We see this when governments start expropriation processes in previously-stable economies.)
We are already seeing this today. /r/WallStreetBets has plenty of content along these lines, and for good reason - that the government would be selectively bailing out corporations, once again, was fairly self-evident to anyone with half decent capabilities in logic and memory.
> It also does nothing for e.g. a company with good receivables that can't make payroll or interest payments because its good commercial paper isn't being purchased.
Fair enough, but lets not think in false dichotomies - there is in fact an extremely broad array of ways the fed could go about this. Unfortunately (and coincidentally), they seem to have once again miraculously chosen the way that benefits corporations at the expense of taxpayers.
Most people believe that we live in nations based on ~democracy, in both function and name. I for one would be very interested to know what the public's actual sentiments are on this matter, as opposed to what we are told are their sentiments (comically derived from a single vote, at one point in time). It's self-evidently silly behavior, and yet this seems to be the way the vast majority of people conceptualize the world.
