The following statements are made by highly informed, educated people of the Finance world. They are highly concerned. Should you also be concerned?
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"This administration is asking for a $700 billion blank check to be put in the hands of Henry Paulson (Treasury Secretary), a guy who totally missed this, and has been wrong about almost everything," said Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington. "It's almost amazing they can do this with a straight face. There is clearly skepticism and anger at the idea that we'd give this money to these guys, no questions asked."
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"This is scare tactics to try to do something that's in the private but not the public interest," said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. "It's terrible."
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"At first it was, 'thank goodness the cavalry is coming,' but what exactly is the cavalry going to do?" asked Douglas W. Elmendorf, a former Treasury and Federal Reserve Board economist, and now a fellow at the Brookings Institution in Washington. "What I worry about is that the Treasury has acted very quickly, without having the time to solicit enough opinions."
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In part, Mr. Paulson's credibility has been dented by his pronouncements in previous weeks that the crisis was already contained. Some suggest this was a well-intentioned effort to stem panic. But the aftermath complicates his quest for the bailout.
"If you view your public statements as an instrument of policy, people don't believe you anymore," said Vincent R. Reinhart, a former Federal Reserve economist and now a scholar at the conservative American Enterprise Institute.
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"There's a tendency for people to think these are stocks and bonds and you know what the price is," said Bruce Bartlett, a former White House economist under President Reagan. "The problem is people are operating in a world in which nobody knows what the hell is going on. There's some naïve assumptions about how this would function."
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"It's a straight subsidy to financial institutions," said Martin Baily, a former chairman of the Council of Economic Advisers in the Clinton administration, and now a senior fellow at the Brookings Institution. "You're essentially giving them money."
Mr. Baily favors the basics of the Paulson plan, albeit with some mechanism that would give the government a slice of any resulting profits. And yet he remains troubled by the dearth of information combined with the abundance of zeros in the bailout request.
"I'd like a clearer statement of what we were afraid was going to happen that requires $700 billion," Mr. Baily said. "Maybe they don't want to talk about it because it would scare everybody, but it's a bit much to ask."
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"This administration is asking for a $700 billion blank check to be put in the hands of Henry Paulson (Treasury Secretary), a guy who totally missed this, and has been wrong about almost everything," said Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington. "It's almost amazing they can do this with a straight face. There is clearly skepticism and anger at the idea that we'd give this money to these guys, no questions asked."
----
"This is scare tactics to try to do something that's in the private but not the public interest," said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. "It's terrible."
----
"At first it was, 'thank goodness the cavalry is coming,' but what exactly is the cavalry going to do?" asked Douglas W. Elmendorf, a former Treasury and Federal Reserve Board economist, and now a fellow at the Brookings Institution in Washington. "What I worry about is that the Treasury has acted very quickly, without having the time to solicit enough opinions."
----
In part, Mr. Paulson's credibility has been dented by his pronouncements in previous weeks that the crisis was already contained. Some suggest this was a well-intentioned effort to stem panic. But the aftermath complicates his quest for the bailout.
"If you view your public statements as an instrument of policy, people don't believe you anymore," said Vincent R. Reinhart, a former Federal Reserve economist and now a scholar at the conservative American Enterprise Institute.
----
"There's a tendency for people to think these are stocks and bonds and you know what the price is," said Bruce Bartlett, a former White House economist under President Reagan. "The problem is people are operating in a world in which nobody knows what the hell is going on. There's some naïve assumptions about how this would function."
----
"It's a straight subsidy to financial institutions," said Martin Baily, a former chairman of the Council of Economic Advisers in the Clinton administration, and now a senior fellow at the Brookings Institution. "You're essentially giving them money."
Mr. Baily favors the basics of the Paulson plan, albeit with some mechanism that would give the government a slice of any resulting profits. And yet he remains troubled by the dearth of information combined with the abundance of zeros in the bailout request.
"I'd like a clearer statement of what we were afraid was going to happen that requires $700 billion," Mr. Baily said. "Maybe they don't want to talk about it because it would scare everybody, but it's a bit much to ask."
