Bailout DENIED

[B_New End]

market rebounds 280 pts.
Hmm... Looks like some people are still optimistic, like me.

 

[Phil Ayesho]

and you pretend to believe in everybody else, but never actually get off your ass to lead the other half to a better life.
stand up and be counted phil, we need you.

What are you talking about? I VOTED for liberal policies. More importantly, I voted for people who COULD enact change.

You vote for people who do nothing, and exercise ZERO power.

Just imagine all the things you could do if you weren't so busy lecturing us on the concept of "every man for himself" while wasting your time on a large penis site... while you could be doing so much more for your fellow man....i get it, you have to start right in your own back yard...think globally act locally...perfect for you phil...you can start right here...show em it is not really every man for himself...start right here on LPSG!!! Show the world phil, pay it forward, start right now, by holding the ruler for an LPSG'er having trouble measuring...it really is about helping one another.

Mighty big words for such a small man.
I note you are venting your political spleen- as schizophrenic as it is, on this same site.

So- with all due respect, bite me and make up your mind to make a difference by voting for the team that has a snowball's chance of winning and enacting your agenda.



I ignore your dissembling bullshit because it is dissembling bullshit.

Take a big step back and lookee see who has made all political appointments this past 8 years.
WHo has had total power to enact ANY legislation they please...
And done nothing.

Then try hard to conjure up some idea of what will happen if "so called" independents, such as you, throw away their vote on some jerkwater nobody.

Most of the time I would say vote for the folks you like most, just to send a message...
but THIS time--- its a little more important to vote EFFECTIVELY.- This time there is an opportunity for Liberal control without conservative obstructionism.

You would be an utter fool not to support it.

Even if you hate democrats.... we had 8 years for the country to see republicans as failures...
Maybe 4 years of Democrats fucking up just as bad is exactly what you NEED to get Americans to honestly entertain a third party.

Either way, the smart move is obvious.

The question is, Are you smart?

 

[Phil Ayesho]

well phil, nothing is stopping you from chucking it all, selling the business, selling the house, giving away all your money to charity and living for the people as a simple man, walking along the road of the american life, encouraging others to live for each other, give up material things, etc...
all you need is a tent, you can grow your own vegetables, you can live off the grid, not have to pay for electricity...don't need a TV...

why don't you sacrifice phil? You talk about caring for others...if you sold it all you could probably help dozens of folks...do you really need what you have? Or i guess you are just too invested in your life, and really just all about the bluster.
you talk a big game...let's see you do it.

I probably do and have done far more than you.

Oh yea of such little real knowledge.

I could not "sell" my business. IT is predicated upon my talent as a designer.
I EMPLOY people- I offer them a livelihood doing art.
I create a humane working environment-

I have taught 50 or more artists, over the years, how to make a living doing art.

They are mostly out on their own now- making their own living, hiring their own apprentices... furthering the humanities.



Oh, and whenever I am confronted with stupid ideas and stupider arguments... I try and expose them... I think that is important as well.




But I see you simply continue in the same vein... bitching about everything and with not one real constructive idea to offer in solution.

Whining about the "powers that be" and ineffectual at changing anything.

Endorsing other ineffectual whiners.
Folks like you are the most worthless in a civil society.

You really gotta make up your mind.
Your posts are meandering and self contradictory.

You gotta pony up some evidence that the numb-nuts YOU endorse would be any better... or shut up about the fact that any jackass can find fuckups by any party.

SO what?

You gotta choice to make

And your stated intention is to LITERALLY not support a party that could win and that would push your agenda.

When you grow a lobe, maybe I will be more interested in your point of view.

 

[catman]

well one tiny "plus" in this, McCains poll numbers are dropping slowly...

"The economy is sound"...

can he live that one down??

Not that I am in any way a fan of Obama but he does 'appear' to beworking towards a 'solution' to this mess (ie working both sides of the aisle)

I have to agree- if there is NO money to lend there is NO growth, period.




as to a 'revolution'...seriously, what would it take to get america off its ass?
really?

No gas? check (in Ga)
Banks failing? check
faith in 'the system' fading? check
crazy food cost? check
in a non-popular war? check
Health care getting further and further away? check
HIV on the rise? check

maybe if chickens and ducks start having sex in the street?

 

[transformer_99]

market rebounds 280 pts.
Hmm... Looks like some people are still optimistic, like me.

Closer to 500 points after all was said and done. Wall street bailing itself out ?

Those who have bad credit during & after this, really didn't have good credit going into it. After they default and are foreclosed upon, they won't be able to get credit, is that a bad thing ? It's bad enough they were allowed to play the good credit/bad credit game for automobile loans/leases.

The market seems to correct itself in spite of the good and bad news. Even had the $ 700+ billion bailout gone thru, the inevitable truth is that house prices can't be maintained at a false floor, the values of homes will continue to plummet because the reality of it is, incomes are not in the the neighborhood of affording the prices of houses as they are today. And now that the banking & real estate bubble has made all the bad loans it can make, those that qualify for a mortgage now will have to be a slam dunk to get/be approved.

 

[Phil Ayesho]

look- you haven't the slightest idea...

THis is NOTHING... you can not evaporate that amount money and NOT have repercussions.

THis STARTED with the Mortgages- NOW its the brokerages that are failing.

As each domino falls it will become harder to stem the momentum of a widespread failure of businesses.


People are getting pink slipped all over the country.
Business deals falling thru due to the banks not writing loans cause they have NO assets with which to raise the capital.

From the crash in 1929 the greatest number of bank failures did not occur until 1931.

IT takes TIME for the ripples to spread thru the entire economy.

All that time the market swung as much as 45% in volatile cycles... but always trending down.

It stayed down till 1940.

And what brought it back?
MASSIVE government borrowing to fund industry for war.

Why wait? Massive funding is what it took to solve the last one... why suffer 10 years of hell before we fund it?

 

[B_New End]

Why wait? Massive funding is what it took to solve the last one... why suffer 10 years of hell before we fund it?

Massive funding for what? for the credit industry... or for dams, roads, bridges and forests?

 

[earllogjam]

What we are witnessing here are the consequences of a failed education system in America. A populace too ignorant and uninformed to make educated decisions on complex issues such as this.

I doubt that they have this problem in countries where education is highly valued such as Japan and Finland where the common citizen has very basic and rudimentary understanding of economics.

This bail out would be a no-brainer for most informed and educated capitalistic societies. But here in America we are dealing with hillbilly and uneducated masses who have no understanding of the problem and are calling the shots for our economic survival without a clear understanding of the consequence of inaction. Feed into this equation representative politicians up for re-election who will cow tow to the masses however ill-informed they are and you have a disaster moving in slow motion.

You reap what you sow. Dumb citizens make dumb decisions, it's that simple and the consequences of their stupidity in a democracy is mind numbing if not dangerous.

A large measure of why this bailout failed has to rest on the President's failure to explain the problem and solution clearly not only to the American people but to all of the legislature. But alas it seems that this is par for the course from the shoot from the hip Bush Administration. It's only fitting that he leave office with one more big mess for all of us to clean up after

 

[Drifterwood]

I am glad that Nick Leeson and Barings were mentioned earlier. Seems though that instead of learning from that, our high and mighty financiers simply repackaged the model under the radar of unregulated credit derivitives.

The difference is though that whereas the losses at Barings were auditable and eventually transparent because Nick coughed, probable losses have escalated on the securitised SPV's of the subprime market debt because of credit derivitives, and are unknown and hidden. Rebundle rebundle rebundle, it's no better than money laundering really.

Nick Leeson went to jail and Barings was wiped out. If there was justice, the same would happen to all those involved in this disaster. But it won't and it is sadly ironic, that the man who feathered his own nest to the tune of $700,000,000 is the man that George W has advising him on how to deal with the problems. Mr. Paulson of Goldman Sachs fame. Read infamy.

Another sad thing, as Transformer said, is that ultimately the bail out is wasted money. Your houses, your homes, will stil be worth a lot less. There is no hiding from the fact that the failed sub prime will have to be auctioned off (liquidated) and all that the bail out does is cover the losses of the City/Wall Street wonderkids, and hope that real credit for real business and people can flow again. But why save the sheisters who caused the problem? Oh yes Mr. Paulson and the incredible political power that they exercise over our democracies.

If you want to accuse me of anything, try my contempt for bullshit finance and investment banking. Someone else mentioned Trading Places, I wonder if they will show that movie at the moment.

 

[B_New End]

What we are witnessing here are the consequences of a failed education system in America. A populace too ignorant and uninformed to make educated decisions on complex issues such as this.

I doubt that they have this problem in countries where education is highly valued such as Japan and Finland where the common citizen has very basic and rudimentary understanding of economics.

This bail out would be a no-brainer for most informed and educated capitalistic societies. But here in America we are dealing with hillbilly and uneducated masses who have no understanding of the problem and are calling the shots for our economic survival without a clear understanding of the consequence of inaction. Feed into this equation representative politicians up for re-election who will cow tow to the masses however ill-informed they are and you have a disaster moving in slow motion.

You reap what you sow. Dumb citizens make dumb decisions, it's that simple and the consequences of their stupidity in a democracy is mind numbing if not dangerous.

A large measure of why this bailout failed has to rest on the President's failure to explain the problem and solution clearly not only to the American people but to all of the legislature. But alas it seems that this is par for the course from the shoot from the hip Bush Administration. It's only fitting that he leave office with one more big mess for all of us to clean up after

You just called me, and millions of other Americans, vehemently opposed to this bail out, stupid. Did it ever occur to you, we know a bit more than a poor highschool education on the subject?

How many articles have you read on the subject? I am in the hundreds this week alone, not to mention 100's in the past 5 years. I am watching a documentary on Argentina's economic collapse right now. Sound like fun to you? Well it's fun to me, and it always has been.

You guys are negotiating from a position of fear, and afraid that shit is gonna hit the fan. It is going to hit the fan, we've been telling you for years. Your $700 Billion bail out will just make it worse in the long run. It's time to bite the bullet.

try my contempt for bullshit finance and investment banking.

Thank you. Guess what those fuckers tried to slip in the bail out?

They wanted to start letting banks loan out money.... WITH NOTHING to back it up!! Absolute MADNESS!! What makes banks so special? They already get to loan out at rates of 10 - 30 to 1.
Nobody on these boards could loan out $1,000,000 just because of who they are! they would have to back it up with something, house, cars and cash more than likely.

On page 83 of the bailout plan, you find

13 SEC. 128. ACCELERATION OF EFFECTIVE DATE.
14 Section 203 of the Financial Services Regulatory Re-
15 lief Act of 2006 (12 U.S.C. 461 note) is amended by strik-
16 ing ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2008’’.



SEC. 203. EFFECTIVE DATE.

The amendments made by this title shall take effect October 1, 2011......



SEC. 202. INCREASED FLEXIBILITY FOR THE FEDERAL RESERVE BOARD TO ESTABLISH RESERVE REQUIREMENTS.

Section 19(b)(2)(A) of the Federal Reserve Act (12 U.S.C. 461(b)(2)(A)) is amended--
(1) in clause (i), by striking `the ratio of 3 per centum' and inserting `a ratio of not greater than 3 percent (and which may be zero)'; and
(2) in clause (ii), by striking `and not less than 8 per centum,' and inserting `(and which may be zero),'.

 

[lucky8]

My bank just stores mine. Yours actually gives? Sign me up, dude!

Interest...

 

[lucky8]

What we are witnessing here are the consequences of a failed education system in America. A populace too ignorant and uninformed to make educated decisions on complex issues such as this.

I doubt that they have this problem in countries where education is highly valued such as Japan and Finland where the common citizen has very basic and rudimentary understanding of economics.

This bail out would be a no-brainer for most informed and educated capitalistic societies. But here in America we are dealing with hillbilly and uneducated masses who have no understanding of the problem and are calling the shots for our economic survival without a clear understanding of the consequence of inaction. Feed into this equation representative politicians up for re-election who will cow tow to the masses however ill-informed they are and you have a disaster moving in slow motion.

You reap what you sow. Dumb citizens make dumb decisions, it's that simple and the consequences of their stupidity in a democracy is mind numbing if not dangerous.

A large measure of why this bailout failed has to rest on the President's failure to explain the problem and solution clearly not only to the American people but to all of the legislature. But alas it seems that this is par for the course from the shoot from the hip Bush Administration. It's only fitting that he leave office with one more big mess for all of us to clean up after

Don't blame education, blame MTV

 

[stratedude]

What is wrong with that is the failure to recognize that you are a member of a community.
That there is NO success without the contribution of community. No economy.


All successful people OWE that success to the community that creates the environment in which they can succeed.

Warren Buffet recognized this.

But those who believe in 'every man for himself" do not.

Truly, no man is an island.

And the most rewarding success is the success you SHARE... not the success you hoard.

Nobody "owes" anyone anything when they become rich. The rich give because it is good for business. Look, just about everyone, liberals and conservatives alike hate greedy people. The big difference between them though is that liberals believe that the big government should determine how much a rich person should give AND what to do with it, while consevatives believe that a rich person should be smart enough to give back and contribute with private donations, or else they risk losing business to angry customers.

 

[earllogjam]

You just called me, and millions of other Americans, vehemently opposed to this bail out, stupid. Did it ever occur to you, we know a bit more than a poor highschool education on the subject?

Guess what? As smart as you and the millions of other anti bailout Americans are, we still haven't heard a proposed a solution to the problem from any of you.

Unless of course you and the millions of other Americans don't really see the ramifications of dwindling credit funding and the increased cost of borrowing money as a problem that affects everyone.

Most of the anti-bailout sentiment revolves around punishing the guys who set the fires instead of fighting the fire.

If you are wrong can we come back to you after the markets have crashed and burned and ask you to undo all the damage?

 

[2322]

Guess what? As smart as you and the millions of other anti bailout Americans are, we still haven't heard a proposed a solution to the problem from any of you.

Unless of course you and the millions of other Americans don't really see the ramifications of dwindling credit funding and the increased cost of borrowing money as a problem that affects everyone.

Most of the anti-bailout sentiment revolves around punishing the guys who set the fires instead of fighting the fire.

If you are wrong can we come back to you after the markets have crashed and burned and ask you to undo all the damage?

I don't think it's necessarily a foregone conclusion. Many economists oppose the bailout as it stands, or any bailout at all. Below are two separate letters signed by economists who oppose the bailout. It is not so cut and dried:

To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.

 

[2322]

The signatories to the letter above:

Acemoglu Daron (Massachussets Institute of Technology)
Ackerberg Daniel (UCLA)
Adler Michael (Columbia University)
Admati Anat R. (Stanford University)
Ales Laurence (Carnegie Mellon University)
Alexis Marcus (Northwestern University)
Alvarez Fernando (University of Chicago)
Andersen Torben (Northwestern University)
Baliga Sandeep (Northwestern University)
Banerjee Abhijit V. (Massachussets Institute of Technology)
Barankay Iwan (University of Pennsylvania)
Barry Brian (University of Chicago)
Bartkus James R. (Xavier University of Louisiana)
Becker Charles M. (Duke University)
Becker Robert A. (Indiana University)
Beim David (Columbia University)
Berk Jonathan (Stanford University)
Bisin Alberto (New York University)
Bittlingmayer George (University of Kansas)
Blank Emily (Howard University)
Boldrin Michele (Washington University)
Bollinger, Christopher R. (University of Kentucky)
Bossi, Luca (University of Miami)
Brooks Taggert J. (University of Wisconsin)
Brynjolfsson Erik (Massachusetts Institute of Technology)
Buera Francisco J.(UCLA)
Cabral Luis (New York University)
Camp Mary Elizabeth (Indiana University)
Carmel Jonathan (University of Michigan)
Carroll Christopher (Johns Hopkins University)
Cassar Gavin (University of Pennsylvania)
Chaney Thomas (University of Chicago)
Chari Varadarajan V. (University of Minnesota)
Chauvin Keith W. (University of Kansas)
Chintagunta Pradeep K. (University of Chicago)
Christiano Lawrence J. (Northwestern University)
Clementi, Gian Luca (New York University)
Cochrane John (University of Chicago)
Coleman John (Duke University)
Constantinides George M. (University of Chicago)
Cooley, Thomas (New York University)
Crain Robert (UC Berkeley)
Culp Christopher (University of Chicago)
Da Zhi (University of Notre Dame)
Darity, William (Duke University)
Davis Morris (University of Wisconsin)
De Marzo Peter (Stanford University)
Dubé Jean-Pierre H. (University of Chicago)
Edlin Aaron (UC Berkeley)
Eichenbaum Martin (Northwestern University)
Ely Jeffrey (Northwestern University)
Eraslan Hülya K. K.(Johns Hopkins University)
Fair Ray (Yale University)
Faulhaber Gerald (University of Pennsylvania)
Feldmann Sven (University of Melbourne)
Fernandez, Raquel (New York University)
Fernandez-Villaverde Jesus (University of Pennsylvania)
Fohlin Caroline (Johns Hopkins University)
Fox Jeremy T. (University of Chicago)
Frank Murray Z.(University of Minnesota)
Frenzen Jonathan (University of Chicago)
Fuchs William (University of Chicago)
Fudenberg Drew (Harvard University)
Gabaix Xavier (New York University)
Gao Paul (Notre Dame University)
Garicano Luis (University of Chicago)
Gerakos Joseph J. (University of Chicago)
Gibbs Michael (University of Chicago)
Glomm Gerhard (Indiana University)
Goettler Ron (University of Chicago)
Goldin Claudia (Harvard University)
Gordon Robert J. (Northwestern University)
Greenstone Michael (Massachusetts Institute of Technology)
Gregory, Karl D. (Oakland University)
Guadalupe Maria (Columbia University)
Guerrieri Veronica (University of Chicago)
Hagerty Kathleen (Northwestern University)
Hamada Robert S. (University of Chicago)
Hansen Lars (University of Chicago)
Harris Milton (University of Chicago)
Hart Oliver (Harvard University)
Hazlett Thomas W. (George Mason University)
Heaton John (University of Chicago)
Heckman James (University of Chicago - Nobel Laureate)
Henderson David R. (Hoover Institution)
Henisz, Witold (University of Pennsylvania)
Hertzberg Andrew (Columbia University)
Hite Gailen (Columbia University)
Hitsch Günter J. (University of Chicago)
Hodrick Robert J. (Columbia University)
Hollifield Burton (Carnegie Mellon University)
Hopenhayn Hugo (UCLA)
Hurst Erik (University of Chicago)
Imrohoroglu Ayse (University of Southern California)
Isakson Hans (University of Northern Iowa)
Israel Ronen (London Business School)
Jaffee Dwight M. (UC Berkeley)
Jagannathan Ravi (Northwestern University)
Jenter Dirk (Stanford University)
Jones Charles M. (Columbia Business School)
Jovanovic Boyan (New York University)
Kaboski Joseph P. (Ohio State University)
Kahn Matthew (UCLA)
Kaplan Ethan (Stockholm University)
Karaivanov Alexander (Simon Fraser University)
Karolyi, Andrew (Ohio State University)
Kashyap Anil (University of Chicago)
Keim Donald B (University of Pennsylvania)
Ketkar Suhas L (Vanderbilt University)
Kiesling Lynne (Northwestern University)
Klenow Pete (Stanford University)
Koch Paul (University of Kansas)
Kocherlakota Narayana (University of Minnesota)
Koijen Ralph S.J. (University of Chicago)
Kondo Jiro (Northwestern University)
Korteweg Arthur (Stanford University)
Kortum Samuel (University of Chicago)
Krueger Dirk (University of Pennsylvania)
Ledesma Patricia (Northwestern University)
Lee Lung-fei (Ohio State University)
Leeper Eric M. (Indiana University)
Letson David (University of Miami)
Leuz Christian (University of Chicago)
Levine David I.(UC Berkeley)
Levine David K.(Washington University)
Levy David M. (George Mason University)
Linnainmaa Juhani (University of Chicago)
Lott John R. Jr. (University of Maryland)
Lucas Robert (University of Chicago - Nobel Laureate)
Ludvigson, Sydney C. (New York University)
Luttmer Erzo G.J. (University of Minnesota)
Manski Charles F. (Northwestern University)
Martin Ian (Stanford University)
Mayer Christopher (Columbia University)
Mazzeo Michael (Northwestern University)
McDonald Robert (Northwestern University)
Meadow Scott F. (University of Chicago)
Meeropol, Michael (Western New England College)
Mehra Rajnish (UC Santa Barbara)
Mian Atif (University of Chicago)
Middlebrook Art (University of Chicago)
Miguel Edward (UC Berkeley)
Miravete Eugenio J. (University of Texas at Austin)
Miron Jeffrey (Harvard University)
Moeller, Thomas (Texas Christian University)
Moretti Enrico (UC Berkeley)
Moriguchi Chiaki (Northwestern University)
Moro Andrea (Vanderbilt University)
Morse Adair (University of Chicago)
Mortensen Dale T. (Northwestern University)
Mortimer Julie Holland (Harvard University)
Moskowitz, Tobias J. (University of Chicago)
Munger Michael C. (Duke University)
Muralidharan Karthik (UC San Diego)
Nair Harikesh (Stanford University)
Nanda Dhananjay (University of Miami)
Nevo Aviv (Northwestern University)
Ohanian Lee (UCLA)
Pagliari Joseph (University of Chicago)
Papanikolaou Dimitris (Northwestern University)
Parker Jonathan (Northwestern University)
Paul Evans (Ohio State University)
Pearce David (New York University)
Pejovich Svetozar (Steve) (Texas A&M University)
Peltzman Sam (University of Chicago)
Perri Fabrizio (University of Minnesota)
Phelan Christopher (University of Minnesota)
Piazzesi Monika (Stanford University)
Pippenger, Michael K. (University of Alaska)
Piskorski Tomasz (Columbia University)
Platt Brennan C. (Brigham Young University)
Rampini Adriano (Duke University)
Ray, Debraj (New York University)
Reagan Patricia (Ohio State University)
Reich Michael (UC Berkeley)
Reuben Ernesto (Northwestern University)
Rizzo, Mario (New York University)
Roberts Michael (University of Pennsylvania)
Robinson David (Duke University)
Rogers Michele (Northwestern University)
Rotella Elyce (Indiana University)
Roussanov Nikolai (University of Pennsylvania)
Routledge Bryan R. (Carnegie Mellon University)
Ruud Paul (Vassar College)
Safford Sean (University of Chicago)
Samaniego Roberto (George Washington University)
Sandbu Martin E. (University of Pennsylvania)
Sapienza Paola (Northwestern University)
Savor Pavel (University of Pennsylvania)
Schaniel William C. (University of West Georgia)
Scharfstein David (Harvard University)
Seim Katja (University of Pennsylvania)
Seru Amit (University of Chicago)
Shang-Jin Wei (Columbia University)
Shimer Robert (University of Chicago)
Shore Stephen H. (Johns Hopkins University)
Siegel Ron (Northwestern University)
Smith David C. (University of Virginia)
Smith Vernon L.(Chapman University- Nobel Laureate)
Sorensen Morten (Columbia University)
Spatt Chester (Carnegie Mellon University)
Spear Stephen (Carnegie Mellon University)
Stevenson Betsey (University of Pennsylvania)
Stokey Nancy (University of Chicago)
Strahan Philip (Boston College)
Strebulaev Ilya (Stanford University)
Sufi Amir (University of Chicago)
Tabarrok Alex (George Mason University)
Taylor Alan M. (UC Davis)
Thompson Tim (Northwestern University)
Troske Kenneth (University of Kentucky)
Tschoegl Adrian E. (University of Pennsylvania)
Uhlig Harald (University of Chicago)
Ulrich, Maxim (Columbia University)
Van Buskirk Andrew (University of Chicago)
Vargas Hernan (University of Phoenix)
Veronesi Pietro (University of Chicago)
Vissing-Jorgensen Annette (Northwestern University)
Wacziarg Romain (UCLA)
Walker Douglas O. (Regent University)
Walker, Todd (Indiana University)
Weill Pierre-Olivier (UCLA)
Williamson Samuel H. (Miami University)
Witte Mark (Northwestern University)
Wolfenzon, Daniel (Columbia University)

 

[2322]

Wolfers Justin (University of Pennsylvania)
Woutersen Tiemen (Johns Hopkins University)
Wu Yangru (Rutgers University)
Yue Vivian Z. (New York University)
Zingales Luigi (University of Chicago)
Zitzewitz Eric (Dartmouth College)

 

[2322]

[FONT=Verdana, Helvetica, Arial]The second letter:

We, the undersigned economists, write to strongly advise against the proposed \$700 billion bailout of the financial services sector as a response to current trends in the market. Granting the Treasury broad authority to purchase troubled assets from private entities poses a significant threat to taxpayers while failing to address fundamental problems that have created a bloated, over-leveraged financial services sector.

Such a large government intervention would create changes whose effects will linger long into the future. The Treasury plan would fundamentally alter the workings of the market, transferring the burden of risk to the taxpayer. At the same time, the \$700 billion proposal does not offer fundamental reforms required to avoid a repeat of the current problem. Many of the troubles in today’s market are the result of past government policies (especially in the housing sector) exacerbated by loose monetary policy. Congress has been reluctant to reform the government sponsored enterprises that lie at the heart of today’s troubled markets, and there is little to suggest the necessary reforms will be implemented in the wake of a bailout. Taxpayers should be wary of such an approach.

In addition to the moral hazard inherent in the proposal, the plan makes it difficult to move resources to more highly valued uses. Successful firms that may have been in a position to acquire troubled firms would no longer have a market advantage allowing them to do so; instead, entities that were struggling would now be shored up and competing on equal footing with their more efficient competitors.

Although it is clear that the financial sector has entered turbulent times, it is by no means evident that providing the U.S. Treasury with \$700 billion to purchase troubled assets will resolve the crisis. It is clear, however, that the federal government will be facing substantially higher deficits and taxpayers will be exposed to a significant new burden just as the looming crisis in entitlement spending appears on the horizon.

For these reasons, we find the proposed \$700 billion bailout an improper response to the current financial crisis.

Sincerely,

Dick Armey, FreedomWorks Foundation
Wayne Brough, FreedomWorks Foundation
Alan C. Stockman, University of Rochester
Ambassador Alberto Piedra, Institute of World Politics
Arthur A. Fleisher III, Denver Metropolitan State College of Denver
Bryan Caplan, George Mason University
Burt Abrams, University of Delaware
Cecil E. Bohanan, Ball State University
Charles N. Steele, Hillsdale College
Charles W. Baird, California State University East Bay
D. Eric Shansberg, Indiana University Southeast
Donald L. Alexander, Western Michigan University
Douglas K Adie, Ohio University
E.S. Savas, Baruch College/CUNY
Ed Stringham, Trinity College
Erik Gartzke, University of California, San Diego
Frank Falero, California State University, Bakersfield
George Selgin, West Virginia University
Howard Baetjer, Jr., Towson University
Ivan Pongracic, Jr., Hillsdale College
James L. Huffman, Clark University
James McClure, Ball State University
Joe Pomykala, Towson University
John P. Cochran, Metropolitan State College of Denver
Kirk Dameron, George Mason University
Kishore G. Kulkarni, Metropolitan State College of Denver
Lawrence H. White, University of Missouri-St. Louis
M. Northrup Buechner, St. John’s University
Melvin Hinich, University of Texas, Austin
Nikolai G. Wenzel, Hillsdale College
Norman Bailey, Institute of World Politics
Paul Evans, Ohio State University
Randall Holcombe, Florida State University
Richard W. Rahn, Institute for Global Economic Growth
Robert Heidt, Indiana University School of Law, Bloomington
Robert Stanley Herren, North Dakota State University
Rodolfo Gonzalez, San Jose State University
Roy Cordato, John Locke Foundation
Samuel Bostaph, University of Dallas
Scott Bradford, Brigham Young University
Soheila Fardanesh, Towson University
Stephen Shmanske, California State University, East Bay,
T. Norman Van Cott, Ball State University
Walter Block, Loyola University New Orleans
William Barnett, II, Loyola University New Orleans
William F. Shughart, II, University of Mississippi
William Niskanen, Cato Institute

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[B_New End]

Guess what? As smart as you and the millions of other anti bailout Americans are, we still haven't heard a proposed a solution to the problem from any of you.

Unless of course you and the millions of other Americans don't really see the ramifications of dwindling credit funding and the increased cost of borrowing money as a problem that affects everyone.

Most of the anti-bailout sentiment revolves around punishing the guys who set the fires instead of fighting the fire.

I guess you have been failing to read my posts, where I have time and time and time and time against said no bail out, if things go bad, we do a new deal with energy infrastructure as our focus.

There, that is one more time.

If you are wrong can we come back to you after the markets have crashed and burned and ask you to undo all the damage?

What if your bail out creates disastrous inflation that forces more people into choosing between gas in their tank, food in their bellies or their mortgage, and more home loans go into default. After we all suffer the inflation and the resulting meltdown, and we hear you guys begging for another $2 or $3 trillion to prop up your failed prop-up, can we come back to you, and ask you to undo all the damage... and give us our fucking money back, and refund me for the loss of the purchasing power of my dollar?

 

[earllogjam]

I don't think it's necessarily a foregone conclusion. Many economists oppose the bailout as it stands, or any bailout at all. Below are two separate letters signed by economists who oppose the bailout. It is not so cut and dried:

Jason, the letters would be more compelling if they offered an outline of a solution to the crisis or gave reasons why they felt that taking no action whatsoever was the correct response. They do not give a clear picture of consequences for doing nothing if that is their stand on the matter.

I don't think among the majority of economists there is a question of IF a bailout is necessary but more a quandary of HOW it will happen.

I guess you have been failing to read my posts,

No, I've read none of your posts regarding your economic theories. They are after all only theories, they may be amusing or interesting but in the end they are inconsequential, as you, probably like most of us who are not in positions of influence have absolutely no say in the matter, whatsoever.

What if your bail out creates disastrous inflation that forces more people into choosing between gas in their tank, food in their bellies or their mortgage, and more home loans go into default. After we all suffer the inflation and the resulting meltdown, and we hear you guys begging for another $2 or $3 trillion to prop up your failed prop-up, can we come back to you, and ask you to undo all the damage... and give us our fucking money back, and refund me for the loss of the purchasing power of my dollar?

What if?

All housing markets have been cyclical. Is the end of the world coming in your personal view of the future?