In the Tanks: A Debate on the Financial Rescue Plan
The Post partnered with Andres Martinez of the New America Foundation to host an online dialogue with Washington think tankers on the administration's announced strategy to stabilize the nation's financial system.
Andres Martinez (New America): The markets are underwhelmed by Treasury Secretary Tim Geithner's plan. But the policy response to the nation's credit freeze and the need to "bail out" the overleveraged financial sector is precisely the kind of subject that gets our adrenaline flowing at think tanks. So what do we think? Any surprises here? Is the administration doing enough (or too much) to fix the problem? These aren't easy questions, and I'm still not entirely clear on the overriding narrative of Geithner's plan. I can explain the stimulus to my four-year-old son, but I'd be hard pressed to explain the financial rescue to him -- or anyone else.
Dan Mitchell (Cato Institute): Geithner's bailout proposal is very disappointing. The economy is in a ditch in large part because of misguided government intervention. The best option would be to allow markets to operate. Unfortunately, Geithner has decided to continue the failed Paulson policy of hindering markets. He wants to prop up bankrupt institutions. He wants to hinder the natural and necessary reallocation of resources out of weak sectors of the economy (in this case, housing and finance). And he wants to create a "public-private" enterprise that almost surely will be a vehicle for ongoing -- perhaps permanent -- interference in private markets. Read entire exchange at the Washington Post...
Related article:
01/22/09 Washington Post: A Rush-and-Shush Rescue by David Ignatius (Hat tip: John D)
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