I went to Limbaugh....

[The_Paineful_Truth]

…who lowered himself by giving credit to a libertarian lecturer at Harvard (whoa!) and pass on his (the) understanding of the real problems associated with a bailout. I understood how we had gotten here, but until now, I didn’t know how we should face it. I’ve been hearing both sides from both parties–a major indication of ignorance. Haven’t we had enough of that already.

…

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street’s hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

The costs of the bailout, moreover, are almost certainly being understated. The administration’s claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.

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.

The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.

Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.

So what should the government do?..

cnn.com/2008/POLITICS/09/29/miron.bailout/

[d0rkyd00d]

Yep, I read that article as well…

It does make me slightly suspicious that they are putting so much effort into saving these giant companies at the expense of the poor.

I think the American people have made their decision: they would rather these companies go bankrupt, and suffer whatever the consequences, than teach large corporations they can take whatever risks they want because the government will bail them out.

Maybe people don’t care if it means hardships, so long as it doesn’t mean nationalizing debt, and standing on the slippery slope towards financial socialism.

[The_Paineful_Truth]

This “crisis” has exposed more intrigue and ignorance than any I can remember. That’s why its amazing how this article cut through the muck so easily yet is a model of brevity.