165 Economists Rip Bailout Plan

Posted By: TheManofSteel

165 Economists Rip Bailout Plan - 09/28/08 01:11 PM

edited for copyright...


http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=76231
165 economists rip bailout plan
Contend administration proposal has 3 pitfalls
Posted: September 25, 2008
7:08 pm Eastern


Treasury Secretary Henry Paulson - At least 165 economists have signed a letter to Congress members warning of three pitfalls in the Bush administration's $700 billion proposal to deal with the Wall Street crisis.


"For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity," they say. "Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted."

The signatories as of this morning were:

Acemoglu Daron (Massachussets Institute of Technology)
Adler Michael (Columbia University)
Admati Anat R. (Stanford University)
Alvarez Fernando (University of Chicago)
Andersen Torben (Northwestern University)
Barankay Iwan (University of Pennsylvania)
Barry Brian (University of Chicago)
Beim David (Columbia University)
Berk Jonathan (Stanford University)
Bisin Alberto (New York University)
Bittlingmayer George (University of Kansas)
Boldrin Michele (Washington University)
Brooks Taggert J. (University of Wisconsin)
Brynjolfsson Erik (Massachusetts Institute of Technology)
Buera Francisco J.(UCLA)
Carroll Christopher (Johns Hopkins University)
Cassar Gavin (University of Pennsylvania)
Chaney Thomas (University of Chicago)
Chari Varadarajan V. (University of Minnesota)
Chauvin Keith W. (University of Kansas)
Chintagunta Pradeep K. (University of Chicago)
Christiano Lawrence J. (Northwestern University)
Cochrane John (University of Chicago)
Coleman John (Duke University)
Constantinides George M. (University of Chicago)
Crain Robert (UC Berkeley)
Culp Christopher (University of Chicago)
De Marzo Peter (Stanford University)
Dubé Jean-Pierre H. (University of Chicago)
Edlin Aaron (UC Berkeley)
Eichenbaum Martin (Northwestern University)
Ely Jeffrey (Northwestern University)
Eraslan Hülya K. K.(Johns Hopkins University)
Faulhaber Gerald (University of Pennsylvania)
Feldmann Sven (University of Melbourne)
Fernandez-Villaverde Jesus (University of Pennsylvania)
Fox Jeremy T. (University of Chicago)
Frank Murray Z.(University of Minnesota)
Fuchs William (University of Chicago)
Fudenberg Drew (Harvard University)
Gabaix Xavier (New York University)
Gao Paul (Notre Dame University)
Garicano Luis (University of Chicago)
Gerakos Joseph J. (University of Chicago)
Gibbs Michael (University of Chicago)
Goettler Ron (University of Chicago)
Goldin Claudia (Harvard University)
Gordon Robert J. (Northwestern University)
Guadalupe Maria (Columbia University)
Hagerty Kathleen (Northwestern University)
Hamada Robert S. (University of Chicago)
Hansen Lars (University of Chicago)
Harris Milton (University of Chicago)
Hart Oliver (Harvard University)
Hazlett Thomas W. (George Mason University)
Heaton John (University of Chicago)
Heckman James (University of Chicago - Nobel Laureate)
Henderson David R. (Hoover Institution)
Henisz, Witold (University of Pennsylvania)
Hertzberg Andrew (Columbia University)
Hite Gailen (Columbia University)
Hitsch Günter J. (University of Chicago)
Hodrick Robert J. (Columbia University)
Hopenhayn Hugo (UCLA)
Hurst Erik (University of Chicago)
Imrohoroglu Ayse (University of Southern California)
Israel Ronen (London Business School)
Jaffee Dwight M. (UC Berkeley)
Jagannathan Ravi (Northwestern University)
Jenter Dirk (Stanford University)
Jones Charles M. (Columbia Business School)
Kaboski Joseph P. (Ohio State University)
Kaplan Ethan (Stockholm University)
Karolyi, Andrew (Ohio State University)
Kashyap Anil (University of Chicago)
Keim Donald B (University of Pennsylvania)
Ketkar Suhas L (Vanderbilt University)
Kiesling Lynne (Northwestern University)
Klenow Pete (Stanford University)
Koch Paul (University of Kansas)
Kocherlakota Narayana (University of Minnesota)
Koijen Ralph S.J. (University of Chicago)
Kondo Jiro (Northwestern University)
Korteweg Arthur (Stanford University)
Kortum Samuel (University of Chicago)
Krueger Dirk (University of Pennsylvania)
Ledesma Patricia (Northwestern University)
Lee Lung-fei (Ohio State University)
Leuz Christian (University of Chicago)
Levine David I.(UC Berkeley)
Levine David K.(Washington University)
Linnainmaa Juhani (University of Chicago)
Lucas Robert (University of Chicago - Nobel Laureate)
Luttmer Erzo G.J. (University of Minnesota)
Manski Charles F. (Northwestern University)
Martin Ian (Stanford University)
Mayer Christopher (Columbia University)
Mazzeo Michael (Northwestern University)
McDonald Robert (Northwestern University)
Meadow Scott F. (University of Chicago)
Mehra Rajnish (UC Santa Barbara)
Mian Atif (University of Chicago)
Middlebrook Art (University of Chicago)
Miguel Edward (UC Berkeley)
Miravete Eugenio J. (University of Texas at Austin)
Miron Jeffrey (Harvard University)
Moretti Enrico (UC Berkeley)
Moriguchi Chiaki (Northwestern University)
Moro Andrea (Vanderbilt University)
Morse Adair (University of Chicago)
Mortensen Dale T. (Northwestern University)
Mortimer Julie Holland (Harvard University)
Muralidharan Karthik (UC San Diego)
Nevo Aviv (Northwestern University)
Ohanian Lee (UCLA)
Pagliari Joseph (University of Chicago)
Papanikolaou Dimitris (Northwestern University)
Paul Evans (Ohio State University)
Peltzman Sam (University of Chicago)
Perri Fabrizio (University of Minnesota)
Phelan Christopher (University of Minnesota)
Piazzesi Monika (Stanford University)
Piskorski Tomasz (Columbia University)
Rampini Adriano (Duke University)
Reagan Patricia (Ohio State University)
Reich Michael (UC Berkeley)
Reuben Ernesto (Northwestern University)
Roberts Michael (University of Pennsylvania)
Rogers Michele (Northwestern University)
Rotella Elyce (Indiana University)
Ruud Paul (Vassar College)
Safford Sean (University of Chicago)
Sandbu Martin E. (University of Pennsylvania)
Sapienza Paola (Northwestern University)
Savor Pavel (University of Pennsylvania)
Scharfstein David (Harvard University)
Seim Katja (University of Pennsylvania)
Shang-Jin Wei (Columbia University)
Shimer Robert (University of Chicago)
Shore Stephen H. (Johns Hopkins University)
Siegel Ron (Northwestern University)
Smith David C. (University of Virginia)
Smith Vernon L.(Chapman University- Nobel Laureate)
Sorensen Morten (Columbia University)
Spiegel Matthew (Yale University)
Stevenson Betsey (University of Pennsylvania)
Stokey Nancy (University of Chicago)
Strahan Philip (Boston College)
Strebulaev Ilya (Stanford University)
Sufi Amir (University of Chicago)
Tabarrok Alex (George Mason University)
Taylor Alan M. (UC Davis)
Thompson Tim (Northwestern University)
Tschoegl Adrian E. (University of Pennsylvania)
Uhlig Harald (University of Chicago)
Ulrich, Maxim (Columbia University)
Van Buskirk Andrew (University of Chicago)
Veronesi Pietro (University of Chicago)
Vissing-Jorgensen Annette (Northwestern University)
Wacziarg Romain (UCLA)
Weill Pierre-Olivier (UCLA)
Williamson Samuel H. (Miami University)
Witte Mark (Northwestern University)
Wolfers Justin (University of Pennsylvania)
Woutersen Tiemen (Johns Hopkins University)
Zingales Luigi (University of Chicago)
Posted By: buggs

Re: 165 Economists Rip Bailout Plan - 09/28/08 03:06 PM

I find it quite interesting that every one of these economists are employed by a college or university. I don't see one Federal Reserve economist or any freelance folks. I'm sure the Fed folks have their hands tied since if they spoke out it might a career limiting move, but where are other voices? (By the way, I know that there are folks in the Federal Reserve System who have enough integrity to speak out, even if it would mean they could lose their jobs, so I still think it's interesting none of their names appear on the list.)
Posted By: Princess Romeo

Re: 165 Economists Rip Bailout Plan - 09/28/08 08:11 PM

I thought I read that the senators called Warren Buffet to get his input on the plan. I am curious to hear if Mr. Buffet has an opinion to offer about the final product.

Which leads me to another question - why isn't Warren Buffet among the candidates for President? Or would that be too reminiscent of Ross Perot?

I think Stockdale is still regarded as one of the worst choices for the V.P. spot on the ticket. IMHO it was a very unfortunate circumstance and unfairly overshadowed his heroic sacrifices and service to our country.
Posted By: grmasterb

Re: 165 Economists Rip Bailout Plan - 09/28/08 09:56 PM

Originally Posted By: Bugs Bunny
I find it quite interesting that every one of these economists are employed by a college or university.


And many of them are employed by the University of Chicago, home to Milton Friedman and his monetarist school of thought, which is embraced by many conservatives. As has been evident, Bush has had a much tougher time selling this to his own party.
Posted By: grmasterb

Re: 165 Economists Rip Bailout Plan - 09/28/08 09:57 PM

Originally Posted By: Bonnie M

Which leads me to another question - why isn't Warren Buffet among the candidates for President?


Huge pay cut and 10 times the aggravation??
Posted By: Pale Rider

Re: 165 Economists Rip Bailout Plan - 09/29/08 01:55 AM

Originally Posted By: grmasterb
Originally Posted By: Bonnie M

Which leads me to another question - why isn't Warren Buffet among the candidates for President?


Huge pay cut and 10 times the aggravation??



he has $5 billion riding on the plan passing and it helping JP Morgan
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 02:09 AM

what is the link, huge? what does buffet have to do with jpmorgan?
Posted By: Pale Rider

Re: 165 Economists Rip Bailout Plan - 09/29/08 02:21 AM

Originally Posted By: McCain Economics
what is the link, huge? what does buffet have to do with jpmorgan?


"Shares of Morgan Stanley (NYSE: MS) are trading up over 10% on the heels of news that Warren Buffett will invest $5 billion in rival Goldman Sachs (NYSE: GS). Investors believe the move by Bufffett, while not directly benefiting Morgan Stanley...."

make that a $5 billion bet on Goldman Sachs, indirectly benefiting Morgan.....
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 02:28 AM

the buffet for president link?

pale, why don't you put in your own words what link to jp morgan there is.
Posted By: Pale Rider

Re: 165 Economists Rip Bailout Plan - 09/29/08 03:50 AM

Originally Posted By: McCain Economics
the buffet for president link?

pale, why don't you put in your own words what link to jp morgan there is.



ah, cause you asked for a link
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 01:40 PM

huge pale, do you even know what you are trying to say?
Posted By: Pale Rider

Re: 165 Economists Rip Bailout Plan - 09/29/08 03:03 PM

Originally Posted By: McCain Economics
huge pale, do you even know what you are trying to say?



I was responding to Bonnie, post #1052377. She questioned whether they had gotten Buffet's input on this plan. Does that help you? He obviously would be a vigorous supporter of the paln, don't you think?

He has already put up an additional $5 billion in bets on Goldman.

Can you keep up please?
Posted By: Miscuit

Re: 165 Economists Rip Bailout Plan - 09/29/08 03:27 PM

yeah...keep up!
Posted By: Pale Rider

Re: 165 Economists Rip Bailout Plan - 09/29/08 03:39 PM

....no comment!!!!!
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 04:54 PM

my bad. i thought that you were referring to buffet-for-pres as that is what she said in the post that i thought that you were referring to.

of course buffet is supporting this plan as is anybody other than the house gop members from ultra-conservative istricts running for reelection.

nobody is happy that this is happening, huge, but without this plan, get ready for bread lines.

now, regarding buffet, he has actually made 2 purchases in as many weeks: goldman and constellation energy. what this means to me is that there is substantial value to be had in the market and that as soon as the fog of negative psychology clears, we can start rebuilding. moreover, the one thing that people seem to overlook is that this bailout can generate a profit for taxpayers.
Posted By: Princess Romeo

Re: 165 Economists Rip Bailout Plan - 09/29/08 05:01 PM

Originally Posted By: Pale Rider
Originally Posted By: McCain Economics
huge pale, do you even know what you are trying to say?



I was responding to Bonnie, post #1052377. She questioned whether they had gotten Buffet's input on this plan. Does that help you? He obviously would be a vigorous supporter of the paln, don't you think?

He has already put up an additional $5 billion in bets on Goldman.

Can you keep up please?


Pale Rider - I had read on a couple of the news story about members of Congress calling Warren Buffet as well as some other notable financial experts, but I don't recall where I read it. A quick Google search shows that Buffet does favor the plan. I read an interview on Fox news that Trump apparently feels the plan, while unfortunate, is necessary.
Posted By: grmasterb

Re: 165 Economists Rip Bailout Plan - 09/29/08 05:51 PM

BREAKING NEWS: Looks like the plan is going down to defeat. I'm watching CNBC right now, it's 205 For, 228 Against. House GOP is rebelling against Bush.

The DJIA is down more than 500 points.
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 05:52 PM

Originally Posted By: grmasterb
BREAKING NEWS: Looks like the plan is going down to defeat. I'm watching CNBC right now, it's 205 For, 228 Against. House GOP is rebelling against Bush.

The DJIA is down more than 500 points.

this is awesome! we need to cut off our nose to spite our face. that will show everybody!
Posted By: Pale Rider

Re: 165 Economists Rip Bailout Plan - 09/29/08 05:53 PM

you can't sustain capitalism with socialism!!!!!!!!!!!!!!!!!!!
Posted By: grmasterb

Re: 165 Economists Rip Bailout Plan - 09/29/08 05:57 PM

The vote hasn't been called yet. The arm-twisting is ongoing. So far only two have flipped their votes.
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:01 PM

Originally Posted By: Pale Rider
you can't sustain capitalism with socialism!!!!!!!!!!!!!!!!!!!

you can recreate the great depression with politicians seeking reelection!
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:04 PM

grmasterb, i just saw that they need 9 votes in the house yet.
Posted By: grmasterb

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:09 PM

Originally Posted By: McCain Economics
grmasterb, i just saw that they need 9 votes in the house yet.


Even if 9 flipped, it's not enough.

CNBC is now saying it's dead.
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:10 PM

ouch. oh well. at least those gop house members will stay elected. i wonder if they will let me butt in line for bread?
Posted By: A_G

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:11 PM

So why are people against it?
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:24 PM

because their constituencies are against it and they are up for reelection.

hey, does anybody want to have a term limit discussion again?
Posted By: straw

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:29 PM

WASHINGTON - The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.


Stocks plummeted on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor.

When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away. Ample no votes came from both the Democratic and Republican sides of the aisle.

http://news.yahoo.com/s/ap/financial_meltdown
Posted By: RebekahL CRCM

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:42 PM

I don't know, I kind of feel like the American public simply had their voices heard. Everywhere I look or listen, Joe-average American's are against the bailout and have been calling their representatives to make their dissent clear. Since so many Representatives from both sides of the aisle voted nay, perhaps they actually simply did their jobs - REPRESENTED their people!

So maybe our economy will go down with a giant flushing sound, but if the trade-off is that America's representative governmental process followed the will of the people, I'm just more proud to be an American. For better or worse, WE made the decision, instead of having that descision made for us.
Posted By: A_G

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:44 PM

are they going to try again, to get something passed, before vacation?
Posted By: DeeQ

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:46 PM

I am sure they will...
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 06:48 PM

Originally Posted By: RebekahL CRCM
I don't know, I kind of feel like the American public simply had their voices heard. Everywhere I look or listen, Joe-average American's are against the bailout and have been calling their representatives to make their dissent clear. Since so many Representatives from both sides of the aisle voted nay, perhaps they actually simply did their jobs - REPRESENTED their people!

So maybe our economy will go down with a giant flushing sound, but if the trade-off is that America's representative governmental process followed the will of the people, I'm just more proud to be an American. For better or worse, WE made the decision, instead of having that descision made for us.

why is a crippled economy an acceptable outcome for you?
Posted By: Princess Romeo

Re: 165 Economists Rip Bailout Plan - 09/29/08 07:07 PM

Well I've already given up on Social Security being available when I retire. I am now kissing my 401(k) goodbye. At this point, I am very concerned that the money I have in FDIC insured deposits will even be there.

The stock market woes are straining the financial system, and from what I read, the FDIC did an "emergency" guaranty for Citi to save Wachovia. There are plenty of smaller regional banks that are teetering. Did any one's Disaster Recovery Plan cover this scenario?

All of these years of careful savings and living under my means, and I have no idea if it will have been worth it.

edited to add:
From my viewpoint, I don't think we are talking about job losses that we've seen before - i.e. the recessions of the early 90's and early 80's. I think we are talking about people losing their life's savings along with their job - and yes echoes of the Great Depression except that we have a h-ell of a lot more enemies than we did in the 1930's. Those enemies are also more dangerous than they were in the 1930's.

And I'm going to go out on a limb here and offer my observation that if Bush hadn't cried "Wolf" to get approval to invade Iraq, there would have been a lot more credibility when the real wolf is ready to pounce. I thought the invasion of Iraq was wrong on many levels, the two main ones being that I thought the WMD argument was false and we would be undertaking a HUGE commitment that could drain us.

I am disgusted beyond words.

Posted By: RebekahL CRCM

Re: 165 Economists Rip Bailout Plan - 09/29/08 07:08 PM

Originally Posted By: McCain Economics
Originally Posted By: RebekahL CRCM
I don't know, I kind of feel like the American public simply had their voices heard. Everywhere I look or listen, Joe-average American's are against the bailout and have been calling their representatives to make their dissent clear. Since so many Representatives from both sides of the aisle voted nay, perhaps they actually simply did their jobs - REPRESENTED their people!

So maybe our economy will go down with a giant flushing sound, but if the trade-off is that America's representative governmental process followed the will of the people, I'm just more proud to be an American. For better or worse, WE made the decision, instead of having that descision made for us.

why is a crippled economy an acceptable outcome for you?


Because a false, propped up economy may be worse. Because often (relatively) short term pain, even if accute, is necessary to heal. Because I think Americans are sick of greed, and believe consequences are necessary, even if they hurt. Because I believe Americans have enough ingenuity and resolve to see it through. But most of all, because most American's seem to be against the bailout, and we live under representative government... the will of the people.

Hopefully an America in which the voice of the people is ignored will never become an acceptable outcome for any of us.
Posted By: A_G

Re: 165 Economists Rip Bailout Plan - 09/29/08 07:10 PM

Weren't we sick of all the greed during Enron, and the rest of the collapses at the turn of the century too?
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 07:14 PM

Quote:
Because often (relatively) short term pain, even if accute, is necessary to heal.

to you (ie "relatively"), what is short term pain?

believe me, i understand your points about representative government, but i also don't trust the majority of americans to understand exactly/fully what the economics behind such a deal are.
Posted By: Princess Romeo

Re: 165 Economists Rip Bailout Plan - 09/29/08 07:22 PM

Originally Posted By: RebekahL CRCM


Because a false, propped up economy may be worse. Because often (relatively) short term pain, even if accute, is necessary to heal. Because I think Americans are sick of greed, and believe consequences are necessary, even if they hurt. Because I believe Americans have enough ingenuity and resolve to see it through. But most of all, because most American's seem to be against the bailout, and we live under representative government... the will of the people.

Hopefully an America in which the voice of the people is ignored will never become an acceptable outcome for any of us.


For the first time in my life I am truly frightened at what could happen, and that is due, in no small part, to the fact that the bank where I currently have a couple of CD's (total amount is till under $100,000) is one of the teetering banks. It is also the bank where my husband's paycheck is deposited directly, but that may not matter because his company may close before the end of the year.

I don't think the FDIC has the reserves to Guaranty all of the insured deposits that are at-risk, so we may need far MORE than the $700 Billion to guaranty the deposits as I think we will soon witness a cascade of bank failures.

Either way you slice and dice it, the American Taxpayer IS on the hook for this mess. I think it was a choice of - do we pay a little now, or do we pay a LOT later.

As I read more and more on the subject, the issue of the derivatives market flushing down the toilet is a subject that even most financial experts do not want to contemplate.
Posted By: RebekahL CRCM

Re: 165 Economists Rip Bailout Plan - 09/29/08 07:42 PM

Originally Posted By: McCain Economics
Quote:
Because often (relatively) short term pain, even if accute, is necessary to heal.

to you (ie "relatively"), what is short term pain?

believe me, i understand your points about representative government, but i also don't trust the majority of americans to understand exactly/fully what the economics behind such a deal are.



Hopefully the difference between painful months and painful years. My husband lost his job last Friday in direct relation to the slow economy. Heck yeah, it is going to be painful for us for awhile! But, we will endure, I have no doubt. I truly feel our resolve is matched by countless families around the country. This resolve, IMHO, outweighs any lack of economic understanding you think we suffer from.
Posted By: TheManofSteel

Re: 165 Economists Rip Bailout Plan - 09/29/08 07:48 PM

wow, even Dennis Kucinich was against the bailout bill, saying that it was sending America towards "casino socialism."

What does it say when a far lefty like Kucinich opposes the bill because of fears of socialism, and President Bush supports it?

This is crazy.
Posted By: Hated By Some

Re: 165 Economists Rip Bailout Plan - 09/29/08 07:49 PM

without a plan (that, btw, nobody wants to have to deal with but, guess what, we have to), we are looking at years.
Posted By: Princess Romeo

Re: 165 Economists Rip Bailout Plan - 09/29/08 07:56 PM

After seeing how the FDIC has handled WaMu and Wachovia, I wonder if they didn't already put together a plan after the IndyMac failure?

It will be curious to see how quickly the FDIC will surgically cut the decaying institutions from the banking system in order to preserve what it can of the insured deposit base. Of course, this may mean that bank stocks will be toast for awhile as investors may seek to dump stocks and receive at least pennies on the dollar rather than nothing.

Either way, a bailout plan will be upon us, and taxpayers will be paying the tab in order to cover the FDIC and NCUA deposit insurance guaranty.

Gives a whole new perspective on borrowing from Peter to pay Paul.
Posted By: Pale Rider

Re: 165 Economists Rip Bailout Plan - 09/29/08 08:03 PM

bless the house pubbies for showing the way!!!

Pelosi couldn't keep her troops in line, the democrats didn't need one pubbie vote, although they got quite a few

buyin, my gluts!!!