Not so fast, Paulson
There's growing skepticism amongst economists about U.S. Treasury Secretary Paulson's plan to buy "toxic debt" off the balance sheets of financial institutions. And growing support for some alternative that would give the government an equity stake. Here's a list of places to check out these alternatives:
1. Luigi Zingales: Why Paulson Is Wrong
2. Arnold Kling: A Simpler Solution
3. Greg Mankiw provides links from Doug Elmendorf, Paul Krugman, and Sebastian Mallaby. Addendum: Mankiw provides six more links to commentary on the mess.
4. James Hamilton
The Democrats in Congress are also pushing for the legislation to include government equity stakes.
Megan McArdle makes sense of what happened last week that spooked the credit market.
Another addendum: Wall Street Journal, "The White House and Congress inched closer to agreement on a $700 billion plan to rescue troubled financial firms, with the Treasury making most of the concessions amid an increasing backlash from a range of economists and lawmakers."
1. Luigi Zingales: Why Paulson Is Wrong
2. Arnold Kling: A Simpler Solution
3. Greg Mankiw provides links from Doug Elmendorf, Paul Krugman, and Sebastian Mallaby. Addendum: Mankiw provides six more links to commentary on the mess.
4. James Hamilton
The Democrats in Congress are also pushing for the legislation to include government equity stakes.
Megan McArdle makes sense of what happened last week that spooked the credit market.
Another addendum: Wall Street Journal, "The White House and Congress inched closer to agreement on a $700 billion plan to rescue troubled financial firms, with the Treasury making most of the concessions amid an increasing backlash from a range of economists and lawmakers."
posted by John B. Chilton at 9/23/2008 12:40:00 AM
2 Comments:
"Do we want to live in a system where profits are private, but losses are socialized?"
Nicely said!
In my view, the bailout plan is plain WRONG. I don't see home prices coming down anywhere here in the tri-state areas, even though there are foreclosures. Banks took the risk, the would have earned rewards if the gamble paid off. I am not happy of tax payers monies being put on the line to save banks. There are alternatives - hard hitting - something required to bring much discipline on Americas borrowing & spending.
Fantastic, honest pieces John - Thank you.
There's a stinging attack on Paulson in The Times of London today, which I must say I agree with, here.
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