116 "academic" economists signed a petition against the bailout. stating this is all "fabricated" by wall street. What say you ?
Very divisive issue.
Almost all economists are adamantly against, except the most democratic Keynesians.
The surprising factor is that Bernanke endorses it. He endorsed it even as the original Paulson plan. Really weird.
But, the fact that he endorsed suggested that it might have merit because just about everyone respects Bernanke.
I talked to one of our most respected professors in monetary policy the other day, and he said that Bernanke is endorsing it because he did his dissertation on the Great Depression, is afraid that the cosmos is realigning, and doesn't want it to happen on his watch.
Even with the latest version of the plan, there are ample problems.
Democrats demand equity stake in the companies, but this will have very specific problems in the future as the government tries to auction off its t-bills, but will have bias towards the bidders to which it holds equity stake. Very touchy.
The good news is that the house voted down the bill endorsed by democrats and the administration might be signaling that the Republican party is actually coming back to its platform of minimalist government intervention and divorcing itself from the current administration.
Or, since it looks like the Fed and world bank and …. are going to cover the bailout anyway, they may have voted it down in a surreptitious move to prevent the Dodd-plan regulation in the banking industry and still steal $700B.
Your guess. Are you optimistic or pessimistic about House Republicans.
The only real solution is, we should never have gotten in this mess in the first place. Where the hell was the SEC?