Posted on 09/27/2008 11:41:58 PM PDT by TDT
..... It is a disgrace that no professional economist was consulted by Congress or invited to present his/her views at the Congressional hearings on the Treasury rescue plan.
Specifically, the Treasury plan does not formally provide senior preferred shares for the government in exchange for the government purchase of the toxic/illiquid assets of the financial institutions; so this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the firms; with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. ..
Moreover, the plan does not address the need to recapitalize badly undercapitalized financial institutions: this could have been achieved via public injections of preferred shares into these firms; needed matching injections of Tier 1 capital by current shareholders to make sure that such shareholders take first tier loss in the presence of public recapitalization; suspension of dividends payments; conversion of some of the unsecured debt into equity (a debt for equity swap).
The plan also does not explicitly include an HOLC-style program to reduce across the board the debt burden of the distressed household sector; without such a component the debt overhang of the household sector will continue to depress consumption spending and will exacerbate the current economic recession.
Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown.
(Excerpt) Read more at rgemonitor.com ...
Ben Bernanke?
So this Roubini guy called every single economist in the whole world and asked them if they were consulted?
I’m just saying...
Mr. Sunshine isn’t taking part in the negotiations from My understanding.
Fire Bernanke, replace with one of the other governors critical of him...there are a couple.
Fire Paulson, replace with Roubini....as in the movie ‘My Cousin Vinnie’....the line “I want him!” is relevant.
This is a smokey backroom deal by power brokers with blank checks and no accountability (until the next election, except for Paulson who has his half billion safely nestled in a trust).
A fellow I meet just today at a Church said the same thing. He’s an accountant, actually he works as a controller.
Perhaps you should re-title this as “Congress DID NOT consult with economics Experts” and put it in Breaking!
Worth a shot. :)
I’m tired of this “fire!” gimmick. yeah, let’s fire Chris Cox, replace him with Andrew Cuomo, then fire Paulson and replace him with Chris Cox and by the time everyone is replaced, a new administration will be in charge and everyone will be fired all over again.
Not being part of the negotiations does not mean not being consulted on the bill. Bernanke certainly seemed to argue for the initial bill which is apparently the basis for the final agreement.
He said in essence: ‘something needed to be done quick’ and hit the road back to the Hampton’s for an extended weekend.
http://www.bloomberg.com/apps/news?pid=20601087&sid=awNB18n8u4Xo&refer=home
They’ve got Maxine Waters on the job—what more does this guy want?
Exactly this is a bail-out package for their true masters - top .0001% and foreign sheikdoms.
omG :::laughing so hard::: Like a black comedy and I don’t mean Maxine.
Yeah, Maxine...she needs to get Solomon Smith Barney Frank on the job.
That was my guess. As he knows every economist personally and they all report to home with all their movements, he would have been made aware of their involvement.
That said, I’ve studied economics, and most “economists” are morons who have found a way to cash in on the fact that most people know even less than they do.
SEC Cox is not so damnable, and, is trying to do a good job.
Paulsons’ original fiat demand to the Congress was for a complete capitulation of the US to vest in him personally, as US Secy of the Treasury, full arbitrary authority without any oversight or investigational or judicial action to ever be applied against him to ‘run’, as a Caesar, the full financial sector with full power to decide which entities get helped, to what degree...literally whose companies and institutions live or die whether they be American or foreign. Look at point number 8 of his original proposal.
His proposal violated his oath of office to support the US Constitution and, his request clearly did not meet our Constitutional standard relating to Congressional responsibilities in my opinion. It is unconstitutional for the Congress to grant such obviously dictatorial power to any individual. That Pres. Bush sponsored such a proposal by Paulson is mind boggling.
Did our President panic?
In any event, I think, with deliberation that Paulson should be canned simply for offering a very unAmerican proposal, the most astonishing proposal I can think of in our history by any officer of the Executive Branch. We Americans are not really ready for arbitrarily delivered, dictatorial socialism. In fact, we do not want socialism at all under any terms...after all we have no means of to financially supporting it. It is plain to see now.
“If you took all the economists in this country and laid them end to end, they’d point in every direction.” - Will Rogers.
Besides, why do you need economists when you’re just dividing up the pie amongst friends?
I saw a scroll on FOX saying, I believe, that Bernanke wanted to remove his recommendation of the Paulson scheme. I don’t know where that leaves Bernanke,....I have not heard anyting else.
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