>and this Harvard economist's view that bankruptcy, not a bailout, is the right answer:
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http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?iref=mpstoryviewI think this guy is very pointy... has several valid points. First, none of the numbers being tossed around are for real. They are all someone's estimates based on guesses about what may happen or not. In an economy where opportunity cost can be passed to the consumer, none of the numbers are really real, it's all some form of creative accounting. So, a shovel of salt to take it with.
Second, GW2B's second inaugural speech, "We will widen the ownership of homes and businesses, retirement savings and health insurance - preparing our people for the challenges of life in a free society. " - this was only a part of the wider relaxation of the rules, with (as prof. Miron notices) implied promise of government backing in case that some of the new owners become a risk. I think this was supposed to cut two ways: on one side, to increase ownership, so to have something to show as a positive result of the current government; on the other, to increase the profits of the whole financial sector and construction sector... except that the rules were not just relaxed, they were thrown away and we saw a lending binge. The plan may have been to have the bubble burst at some point in next president's term, so the hot potato would be passed to the other team's side, but the breaks were already pulled, and I think everyone thought everyone else knew what they were doing, so they did the same.
So... I don't believe in 700 billion, it's not worth that much; I don't believe this blackmail is serious either. A lot of the value of this or that at the moment is based on expectation that there will or will not be a bailout. The day after a clear decision the things will start to settle. If it's a decision to let them fall, as they should, the better.
>and last, but not least, pressure from the EU:
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http://www.breitbart.com/article.php?id=080930121824.24k1fx4j&show_article=1I expect this will be accepted just as much as the instruction to go metric, join the international court, Kyoto...
