Peter S. Goodman offers a revealing summary in this morning's New York Times of the magical thinking behind the Bernanke/Paulson BIG BAILOUT. A $700 Billion Rescue Plan for Wall St., but Will It Work? Sandwichman elaborates at EconoSpeak on what is magical about this thinking, if it isn't obvious from the quote.
http://econospeak.blogspot.com/2008/09/you-were-expecting-maybe-panacea.html) "If the plan works, it will attack the central cause of American economic distress: the continued plunge in housing prices. If banks resumed lending more liberally, mortgages would become more readily available. That would give more people the wherewithal to buy homes, lifting housing prices or at least preventing them from falling further. This would prevent more mortgage-linked investments from going bad, further easing the strain on banks. As a result, the current downward spiral would end and start heading up." -- Sandwichman _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
