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Unread 6 Aug 2009, 09:05   #42
Tietäjä
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Re: Is Bigger Government Better

Quote:
Originally Posted by Tactitus View Post
I was mostly referring to this letter signed by over 200 economists in various universities around the country and sent to Congress in September 2008 in opposition to the bailout then under consideration. It got a bit of attention here in the U.S. but maybe not elsewhere.
"It does not reflect all signatories views on subesquent plans or modifications of the bill"

This would lead me to believe that the people whose names appear on the list are against the specific bail out plan presented by the above mentioned government institutions. This does not mean that they'd be against bail outs per principle, or that they'd think that simply not bailing out would be a better option, or that the bail out plan could not be improved through modifications or follow-up actions.

I'll ask again, and I'll try be more specific: could you please point me out an economist with creditentials that will specifically state that the bail outs should have never happened, and bail outs should never happen, because they are "wrong" (because markets clear as per efficient markets model). It's worth mentioning that nobelists like Krugman and Shiller would follow the list to argue that the bail out plan was poor. Yet, they'd probably not argue that it was worse than doing nothing, or, that the whole of the financial sector should be left for free markets to reign.

I doubt any sensible economist nowadays would so trust some pristine efficient market model.

Quote:
I don't know if you consider a professorship of economics as an acceptable credential, but their names and institutions are listed and you can decide for yourself.
I do. Your citation does not support your case for above reasons. What I'm arguing is, that in the case, bail outs were necessary. I'd even be tempted to support Krugman's case for temporary takeovers could be necessary. The way I see it, you are arguing that markets alone should be left to handle the financial sector unsupervised, and that markets such as that would clear. And that govenrment intervention on markets causes more adverse reactions. This is what I'd like to hear argued.

In fact, in this aspect, I'll quote your own citation. Please, read this part carefully.

"We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan"

I'll ask again, in case you misunderstood. I'm not supporting the Paulson plan vis a vis. But I'm a fan of certain bail outs. I'll quote myself.

Quote:
that argue that bailouts of Freddie Mac and Fannie May were mistakes, or argue that they should have never happened?
The source you cite is a critisism towards the propsed plan by the senate. It in fact underpins, that it does not state that no action is needed: in fact, it specifically states, that bold action is needed. C'mon. Mostly refering to a source that in fact backs up the need for action to ensure the functionality of the financial system in an attempt to argue against the need for such action is a bit of a numb point, especially as citing to it does not really answer the question I presented to you in any way.
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