Stiglitz: Obama/Geithner Plan Makes Fools Of Taxpayers
THE Obama administrationís $500 billion or more proposal to deal with Americaís ailing banks has been described by some in the financial markets as a win-win-win proposal. Actually, it is a win-win-lose proposal: the banks win, investors win ó and taxpayers lose.
And it is not even gonna work to "save" the financial industry:
So what is the appeal of a proposal like this? Perhaps itís the kind of Rube Goldberg device that Wall Street loves ó clever, complex and nontransparent, allowing huge transfers of wealth to the financial markets. It has allowed the administration to avoid going back to Congress to ask for the money needed to fix our banks, and it provided a way to avoid nationalization. But we are already suffering from a crisis of confidence. When the high costs of the administrationís plan become apparent, confidence will be eroded further. At that point the task of recreating a vibrant financial sector, and resuscitating the economy, will be even harder.
Krugman Stiglitz always hated Obama, and a Nobel in Economics does not mean squat and . . .
Speaking for me only
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