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Bush’s Bailout
Will Bush bail out “hundreds of thousands of borrowers who have been unable to pay off their mortgages”? Why yes, or at least it appears that way. Marc Moore wrote a mighty fine article about Bush’s plan to help these people (and a nice debate followed).
I would have cross posted it here if I would have written it myself, but since that is not the case, I thought I’d link to it from here.
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9 Responses to “Bush’s Bailout”
I am not an economist. But Barack Obama has suggested imposing fines on unscrupulous lenders and using the proceeds to bail out borrowers.
Why bail them out? The government should not bail out anyone.
Maybe bailing them out will discourage the proper appreciation of risk, leading to larger problems in the future. But if this is a widespread problem, it was the responsibility of financial professionals to judge risk correctly. And they failed in their due diligence on a massive scale. It’s not hard to imagine they failed because they were sure someone would bail them out.
It’s possible the government bails out the damaged to prevent the spread of damage throughout the wider economy. It’s possible, even likely, that this is a legitimate role of government. But it seems to me that somebody has to pay. Why shouldn’t predatory lenders pay rather than their victims?
As I say, I’m not an economist. But it’s way too late to say the government should not bail anyone out.
Government bailouts are already plentiful.
Alan Greenspan February 23, 2004
Surely the worst Fed Chairman of all time.
George,
Arguing that the government has bailed out other people, is not a great argument to advocate bailing out more. I could say that this bailing out has only made matters worse in the long run.
True. But individuals should have used their own brains as well.
What I actually said was
I’m saying that maybe the government the bails people out for good economic reasons, not just for the heck of it.
But I do not consider that to be a “legitimate role of government.” I consider that to be a “legitimate role of family.”
What family, Michael? This is one of the constant refrains of conservatives who look back on the good old days when families helped each other out. Of course back then families were larger and could spread out that help among a larger group. And in today’s environment it’s also equally likely that the other family members are having their own liquidity problems.
What do you mean, ‘failed’? It seems they did exactly what they were intended to do: The owners and operators of the loan companies made off with billions thanks to policies they set.
This time they overextended themselves too far and their own companies collapsed, so that sucks, but you know, it’s like a car. Sometimes you can fix them, sometimes you just have to junk them and get a new one. As long as they mostly get you to where you need to go and don’t cost too much, it’s all good.
Of course, shame about all the lives they’ve destroyed, but those people shouldn’t have been standing in the road. And it’s a shame, when they totaled their cars, no one bothered to rescue their loyal drivers and support staff. (But I’m sure the accident is all the driver’s fault for following policy.)
Hey, it’s the free market, right? People get hurt, what can you do?
And providing care to the poor that were run over or the people still in the car just encourages them to continue to be poor and/or work for a living instead of inheriting a ton of money and living off that.
However, the government should certainly, if it can, tow the car somewhere and try to fix it. Without cars, society would collapse, and I think we’d all be willing to chip to stop that from happening. But the car may be unrepairable, so we need to realize this could involve buying some new cars and giving them out to the former owners of the broken cars.