The bailout bill is old news. Now it's called a rescue bill. And the new one does seem to have a few provisions that I think are decent, while in essence carrying out the general shmuckus of handing over tax payer money to whomever.
Nevertheless, while I'm still trying to understand the new bill, we can talk about the old bill(s)--and I'll be quick to say that I never felt comfortable with the old bill, and suspected treachery, perhaps just because that's what I've come to expect.
However, after days of asking questions and poking around and reading a bunch of stuff, Kendra finally forwarded me an opinion that my instincts agreed with.
Bankruptcy, not bailout, is the right answer, by Jeffrey Miron
I'll quote the really good stuff:
"Bankruptcy means that shareholders typically get wiped out and the creditors own the company. Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines)."
"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."
I was particularly never satisfied with anyone's positive reviews of the bailout plan just because not one person that I encountered had the time or knowledge to adequately explain how it would be a good thing. I'm glad I ran into someone who could adequately explain why it was a bad thing.
Now, hug your children tight. The credit will flow eventually, one way or the other.
Nevertheless, while I'm still trying to understand the new bill, we can talk about the old bill(s)--and I'll be quick to say that I never felt comfortable with the old bill, and suspected treachery, perhaps just because that's what I've come to expect.
However, after days of asking questions and poking around and reading a bunch of stuff, Kendra finally forwarded me an opinion that my instincts agreed with.
Bankruptcy, not bailout, is the right answer, by Jeffrey Miron
I'll quote the really good stuff:
"Bankruptcy means that shareholders typically get wiped out and the creditors own the company. Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines)."
"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."
I was particularly never satisfied with anyone's positive reviews of the bailout plan just because not one person that I encountered had the time or knowledge to adequately explain how it would be a good thing. I'm glad I ran into someone who could adequately explain why it was a bad thing.
Now, hug your children tight. The credit will flow eventually, one way or the other.
No comments:
Post a Comment