Professors Against the Bailout

Campus Report ^ | September 29, 2008 | Bethany Stotts

[bs9021]

Professors Against the Bailout

by: Bethany Stotts, September 29, 2008

Politicians opposing the $700 billion bailout, known as the Paulson plan, got support from an academic venue on Thursday, September 25. Senator Richard Shelby (R-Alabama) met before the press that day to explain his opposition to the plan.

“I don’t know if you have this, but I have…five pages of the leading economists in America that wrote to me and the leadership saying ‘the Paulson plan is a bad plan, it will not solve problems, it will create more problems, we’re rushing to judgment, and that we do have stress in our financial markets, but this is not the best way—we ought to get alternatives,’” Senator Shelby told the press, according to a video released by the BBC. “This is not me, this is economists in at Harvard, Yale, MIT, [the] University of Chicago—our leading universities. Five pages. It ought to tell you something,” he said.

On Friday, the Chronicle of Higher Education ran the story with the subtitle, “For once, a petition has an impact.”

“Neither the mission of the new agency nor its oversight are clear,” wrote the five petition-designers, Professors John Cochrane, Anil Kashyap, Bob Shimer, Paola Spienza, and Luigi Zingales, who come from Northwestern University and the University of Chicago. “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 afterward.”

Professor Zingales argued that a significant deficiency within the Paulson plan is that it would likely cause the government to purchase subprime mortgages at inflated prices. In a column published on the Vox website, which provides “research-based policy analysis and commentary from leading economists,” Zingales wrote that...

[TheWasteLand]

Asking economists about the economy? What a novel idea.

I thought everyone in Washington had decided that Henry Paulson, an investment banker, knew everything about the economy.

[Nervous Tick]

>> I thought everyone in Washington had decided that Henry Paulson, an investment banker, knew everything about the economy.

The problem is, those silly academics are inept liars. You can’t have a front man who is clumsy about misleading the public (er, for their OWN GOOD, of course).

[STONEWALLS]

I got news for the professors against the rescue plan....their university endowments/scholarship funds just took a massive hit this afternoon....with more to come tomorrow....and without scholarship money just how many families are going to be able to afford the $46,000/year it cost to go to a hot shot school?

[Sergio]

Asking economists about the economy? What a novel idea.

Well, we really won't know what the real solution is until the press interviews the real experts on economics. You know, the real intellectual power houses, the actors and singers of our great nation.