Wednesday, October 01, 2008

Questioning the bailout

Jeffrey Miron "is senior lecturer in economics at Harvard University" and "one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan."

If you have any interest in this economic crisis at all (and you should), please take time to read his article on CNN.

The bottom line: It was the government (i.e. the Democrats!) who caused this problem. Now we are about to dish out 700 billion dollars without fixing the problems that got us into this mess in the first place. Miron concludes:
So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.
(Hat tip: John W.)

1 comment:

Kevin said...

I am no longer in support of the bailout. Washington must be reformed. Small businesses may need assistance in this economy... but this bailout program is too risky, too uncertain. Particularly considering that the Treasury Secretary could change within the next four months.