Think Tank West

Last week, a group of 192 economists signed a letter expressing concern over the Treasury Department’s proposed bailout of the financial industry.  They write: The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses.  Not every business failure carries systemic risk. The government [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »

I’ve posted a copy of the proposed bailout legislation online in html format, which is easier to read, copy, and paste. Considering its size and significance, I urge you to review it and share it with others. We have several experts on the bailout at Cato, and our media producer Caleb Brown has ably drawn [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »

In his speech on the financial crisis, President Bush remarked: Our system of free enterprise rests on the conviction that the federal government should interfere in the marketplace only when necessary. Hmm.  I wonder what happens if I substitute other words for “free enterprise” and “in the marketplace.” Our system of free speech rests on the [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »

A page one Washington Post headline reports, “Credit Crisis Has Given Obama a Distinct Edge.” Which must be really frustrating for McCain, because McCain did try to reform Fannie Mae and Freddie Mac back in 2006. Obama, meanwhile, as I reported at the American Spectator, received more donations from Fannie Mae in four years than any [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »

Peter Bernstein draws a conclusion from the current problems in the financial markets: The subprime mortgage mess, the huge leverage throughout the system, the insidious impact of new kinds of derivatives and other financial paper, and, at the roots, the vast underestimation of risk could not have happened in a planned economy. Oh really? Another [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »

I have been telling reporters there is plenty of private money available for deals.  Witness Bank of America’s purchasing Merrill Lynch; Buffett’s $5 billion investment in Goldman Sachs; and JP Morgan Chase’s purchase of WAMU.  But sellers will now hold out for the expected baillout price from Treasury, and that will price private money out.  [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »

Arnold Kling makes an important observation that “Democrats want to [pass the Paulson-Bernanke bailout proposal] without deliberation, because putting the financial sector under government control is what they want.” Despite the sturm und drang of the Left blogosphere (not to mention protesters) over the proposal, it is not their Blue Team heroes who are standing against [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »

The IBD has an excellent front page summary of the 1990s roots to the Fannie Mae and Freddie Mac disaster. One issue IBD touches on is the ineffectiveness of the regulating agency OFHEO. Here is OFHEO giving Fannie and Freddie a clean bill of health just last December. One reason that having regulatory agencies is [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »

With so much riding on the pending bailout, I would ask Congress to hold a hearing this weekend, with two people testifying: Ben Bernanke and Roger Cole. Cole is head of the Federal Reserve’s Division of Bank Supervision and Regulation, fondly known as “soup and reg.” Here is how mortgage securities markets could affect good [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »

For not doing a bailout: We don’t need to bail out Wall Street to protect Main Street. All we have to do is make sure that sound borrowers, especially small businesses, have access to credit. Banks can do the job, although regulators may have to reduce capital requirements. The mortgage securitization industry is brain-dead. If [...]

Filed under: American Domestic Policy, American Foreign Policy by
No Comments »