400 World Famous Economists Speakout Against Bailout

THEY SUGGEST THAT CONGRESS HOLD HEARINGS

Economists Protest the Bailout Plan:

Numerous prominent economists on both the right and the left have signed this petition against the bailout plan proposed by the Administration (list of signatories available at the link above):

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, Americas 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.

Additional Link to the list of Economists:  http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm

Simply breathtaking.

Mcauleysworldweblog: The following Articles describe the role of “political ideology” in the Financial Crisis – How Politics fueled the crisis:

Professor Stan Liebowitz: The Real Scandal – http://www.nypost.com/seven/02052008/postopinion/opedcolumnists/the_real_scandal_243911.htm?page=0

Professor Thomas J DiLorenzo: The CRA Scam and its Defenders: http://www.mises.org/story/2963

John R Lott, Jr : Analysis – Reckless Mortgages Brought Financial Market To Its Knees http://www.foxnews.com/story/0,2933,424945,00.html

Infamous Video of Committee Meeting on Fannie Reform:  http://www.youtube.com/watch?v=_MGT_cSi7Rs&eurl=http://gatewaypundit.blogspot.com/2008/09/devastating-dems-refuse-to-reform.html

6 Responses

  1. Somebody must be really out of their mind to trust common thieves and idiots to craft a bailout plan of this magnitude.
    So far the same people had not see nothing wrong in our economy and now they want to twist our hands and steal the rest of our money to have a grand finale, before sinking.
    Let me see their assets being donated for the ones they robbed and let me see a law,which punishes those common corporate criminals before I would open up my pocket to bail them out. So far whatever our government does goes bad and now they want to change USA into socialist commune, where the government will be owning banks,Wall Street and will give us handouts.
    Vote them all out of power and lock them up in jail,where they belong.

  2. I’ve been thinking about this a lot (as we all have) and it just occurred to me tonight… I’m be more than happy to agree with the “rescue” plan if Congress will do two things…

    1. Hold themselves accountable (by name… not House or Senate but by individual names) if this thing doesn’t work. I want to know who screwed up!
    2. Agree to some punishment if their plan doesn’t do what they are promising it will do. Punishment and an agreement that they will resign their post… Immediately!

    I want to see some accountability before I will agree to this approach.

  3. […] that? Some economists who expect the governemnt handouts for their reasearch support that, some don’t. Is your famous judgment the only proof you can offer? It’s not acceptable when you take my […]

  4. This bailout plan has extremely horrible long term effects. Our grandchildren will still be paying for our mistakes as they go to their deathbeds. We should be against this 100%

  5. John Cochrane is one of the most amazing guys I’ve ever talked to, and I’m glad he put this together.

  6. […] that action came from the left and the far-right, not the neoliberal center. Several. The bailouts were one of the few things which brought economists of all schools together for the most part. Men […]

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