Criticism of Bailout Plan Important, Yet Plan Necessary
A reader writes in response to yesterday’s “The Crisis, Wall Street and Main Street” article:
I actually agree with some of the criticisms of the plan, and I think many financial experts would agree with the professor above. Yes, financial sector is overdeveloped, bloated, and it needs to shrink. That’s what I thought when I was working in one of those failed investment banks. (I left much earlier than the current crisis).
You don’t need to be a genius to figure out how overbloated and overpaid these people are for contributing nothing of value to society at large. But hey, you’re facing many layoffs in the industry as of now and in the following days and months to come.
It is crucial that the government pay fair value for those distressed securities and not pay more than what they are worth. It will be a challenge because a lot of those institutions holding these securities would like to get as good of a deal as possible. That’s why how the plan gets executed will be of paramount importance. Whether enough punitive measures will be enforced throughout these organizations or whether the management will really be stripped of their golden parachutes is not all that clear.
Also it’s important that institutions that are supposed to fail indeed do so without being kept afloat in defiance of market forces so to speak. But all this needs to be done while trying to keep the fabric of the financial system intact, which is why the plan was an important step in the right direction. However the critics of this plan should be loud and clear despite the fact that this plan was a necessity.
People in charge of this plan should know that Americans expect accountability - and perhaps more explaining as to why this was necessary. I also concede that the plan details and execution should be followed in a hawkish fashion so that public money doesn’t get wasted in some special interest financial deals or in bad debts or overpaid securities of institutions that were supposed to fail.
Wow… the bailout worked as expected…
Like pouring gasoline on a fire…
Let me guess… we need another bailout?
“privatize the profit, socialize the loss”?
China vs US markets…thoughts?
http://video.msn.com/?mkt=en-us&brand=money&vid=5fe2a19b-47ae-46ef-832c-c4077dd8268f&playlist=videoByTag:tag:money_top_investing:ns:MSNmoney_Gallery:mk:us:vs:1&from=MSNmoney_TheNextCrisisTheEconomy&tab=s216
This bailout is just one more example of the indivisible handjob stroking irresponsible CEOs and CFOs with billions so that they can run the American economy even further into the ground. So much for Keynesian economics. If the goal is to stimulate the economy, why not give the money directly to the American taxpayer? A bird in the hand is worth two in the bush administration.