[quote]SteelyD wrote:
shookers wrote:
SteelyD wrote:
shookers wrote:
I recognize many of you are free market libertarians - hell I am too, but how anyone can responsibility not vote yes for this bill is beyond me. Why you would “accept” a huge recession when you could correct the problem is rediculous. Someone enlighten me as to your thinking?
This is an outrageously inconsistent and non-sensical paragraph.
Not really. Sometimes practically has to trump idealism
Here, I’ll re-post this article since I see it’s been ‘elevated’ to Drudge status this morning:
Excerpts:
–snip
[i]This bailout was a terrible idea. Here’s why.
The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis.
The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.
[/i]
–snip
[i]The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.
The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.
[/i]
–snip
[i]In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government.
This “moral hazard” generates enormous distortions in an economy’s allocation of its financial resources.[/i]
–snip
If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.
** See: rainjack re: M2M
–snip
The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.
Oh, look-- he’s a Libertarian and GASP! even has a Ph.D from MIT and lectures at Harvard…)
Editor’s note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.[/quote]
This is frigging great stuf
