Author Archives: Michael Froomkin

The Economists' Voice has some timely writing:

Why Paulson is Wrong

Luigi Zingales

There are alternatives to a massive government bailout of the U.S. financial industry, according to Luigi Zingales—they just would be more costly for financiers and cheaper for taxpayers.

Questioning the Treasury's $700 Billion Blank Check: An Open Letter to Secretary Paulson

Aaron S. Edlin

The Treasury wants a blank check for $700 billion, at taxpayer expense; instead a businessman like Buffett should be given the job of making the taxpayers some money out of this mess, according to Aaron Edlin.

Dr. StrangeLoan: or How I Learned to Stop Worrying and Love the Financial Collapse

Aaron S. Edlin

Last week, on Wednesday September 17, 2008, the Bush Administration almost stumbled upon a way to eliminate the U.S. debt and even taxes. Aaron Edlin's ironic take on a world gone mad.

Investment Banking Regulation After Bear Stearns

Dwight M. Jaffee and Mark Perlow

The Bear Stearns bailout created an implicit guarantee that will create a great deal of moral hazard unless we smartly regulate investment banks in a way that doesn't destroy their value; so say Dwight Jaffee and Mark Perlow.

Miami: Say NO to the Bush Bailout Rally
September 25, 2008
5:00 PM – 6:30 PM

Stand with your neighbors and say NO Bush Bailout!

Bring signs and friends so that we can all call on the government to invest in Main Street, not Wall Street.

Address
Busy Street Corner
SW 17th Avenue and US1
Miami, FL 33133

I wonder why so often progressive rallies pick this corner? Yes, it's on a main commuter route, but it's soulless and not that accessible.

Update: find a rally near you

I am very disappointed to read this in the NYT online.

At the same time, Congressional Democrats said they were prepared to drop one of their most contentious demands: new authority for bankruptcy judges to modify the terms of first mortgages. That provision, aimed at preventing foreclosures, was heavily opposed by Senate Republicans.

I hope it is not true. I have yet to read a convincing case for why banks should get all the windfalls for their evident stupidities. I do not like being asked to pay large sums of money for windfalls to the improvident, but given the choice between improvident families losing their homes and stock and bondholders in improvident banks, I know whose windfall I'd choose to hand my a share of my income to.

On a somewhat more cheerful note, it seems that the Dems might “only” hand over $150 billion, which might leave a little money for social programs in the Obama administration. Even though the $700 bn number was clearly made up, I suppose this will be about as small a number as they can get away with. Think what it could have done for health care.

If the Congress doesn't hold some sort of line on the amount, the GOP program of “starving the beast” — making the Treasury so broke that there's no danger Democrats could afford anything popular — would truly have reached its apotheosis.