Bailout: It’s Time to Start Listening - No More Price Fixing
September 24, 2008
(Long Island, N.Y.) The Unites States Congress, which could adjourn for the year as early as this week, is now deciding the unthinkable: How to take 700 Billion dollars from the American people and give it to those on Wall Street who lied and cheated us into this financial mess. This is a discussion that shouldn’t even be on the table.
Congress is being pushed into a corner to sign legislation before the end of the week, despite the fact that the White House admitted it drew up this scenario over pervious months and weeks. Some say this is no surprise as unfavorable bills or those which are not in the best interest of the people are often sent to congress with strategic timing such as this.
According to the New York Times, many Americans are writing their elected representatives in the nation’s capital to voice their concerns. “The last time that Congress hurriedly passed legislation that the administration presented as ‘urgent’ we got the Patriot Act, with its mix of necessary reforms and onerous civil rights abuses, Do not fall into this trap again”. One of the constituents wrote. We can only hope that Congress will listen to the many Americans who contact them.
Over the last year, Treasury Secretary Henry Paulson repeatedly assured the American people that the United States economy was sound. While many suspected that the United States was facing a recession, those like Henry Paulson, President Bush, and Federal Reserve Chairman Ben Bernanke explained the downturn as our nation facing “tough times” or “difficult challenges”. Today, they ask the American People to believe that catastrophic danger awaits them around every corner if action is not taken now. That they did not notice this as being possible until days ago - requiring quickly written three page legislation that would put taxpayers on the hook for purchasing troubled assets - mainly mortgage-backed securities, to be signed and passed immediately. Paulson’s original proposal included statements like: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
Representative Ron Paul of Texas, who has been fighting to explain the nations economic difficulties for years, was quoted in a July article as saying “Some Big Events Are About To Occur“. He warned that “These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.” But few ran this story.
Government intervention in the free market has artificially inflated prices for years. This has made money too easy to come by, and let banks lend to previously overly risky buyers. These governmental measures, combined with the Federal Reserve’s loose monetary policy, led to an unsustainable housing boom. The key measure by which the Fed caused this boom was through the manipulation of interest rates, and the open market operations that accompany this lowering.
This lowering of prices which we are experiencing today actually brings the economy back into balance, equalizing supply and demand. However. the government doesn’t like this, and is willing to put the tax payers money on the line to keep prices artificially inflated.
We must restore the checks and balences of our financial system by saying no to another Wall Street Bailout.
The following group of prominent economists, including numerous Nobel Prize winners, has written a letter slamming the bailout proposal:
- Acemoglu Daron (Massachusetts Institute of Technology)
- Adler Michael (Columbia University)
- Admati Anat R. (Stanford University)
- Alexis Marcus (Northwestern University)
- Alvarez Fernando (University of Chicago)
- Andersen Torben (Northwestern University)
- Baliga Sandeep (Northwestern University)
- Banerjee Abhijit V. (Massachusetts Institute of Technology)
- Barankay Iwan (University of Pennsylvania)
- Barry Brian (University of Chicago)
- Bartkus James R. (Xavier University of Louisiana)
- Becker Charles M. (Duke University)
- Becker Robert A. (Indiana University)
- Beim David (Columbia University)
- Berk Jonathan (Stanford University)
- Bisin Alberto (New York University)
- Bittlingmayer George (University of Kansas)
- Boldrin Michele (Washington University)
- Brooks Taggert J. (University of Wisconsin)
- Brynjolfsson Erik (Massachusetts Institute of Technology)
- Buera Francisco J. (UCLA)
- Camp Mary Elizabeth (Indiana University)
- Carmel Jonathan (University of Michigan)
- Carroll Christopher (Johns Hopkins University)
- Cassar Gavin (University of Pennsylvania)
- Chaney Thomas (University of Chicago)
- Chari Varadarajan V. (University of Minnesota)
- Chauvin Keith W. (University of Kansas)
- Chintagunta Pradeep K. (University of Chicago)
- Christiano Lawrence J. (Northwestern University)
- Cochrane John (University of Chicago)
- Coleman John (Duke University)
- Constantinides George M. (University of Chicago)
- Crain Robert (UC Berkeley)
- Culp Christopher (University of Chicago)
- Da Zhi (University of Notre Dame)
- Davis Morris (University of Wisconsin)
- De Marzo Peter (Stanford University)
- Dubé Jean-Pierre H. (University of Chicago)
- Edlin Aaron (UC Berkeley)
- Eichenbaum Martin (Northwestern University)
- Ely Jeffrey (Northwestern University)
- Eraslan Hülya K. K.(Johns Hopkins University)
- Faulhaber Gerald (University of Pennsylvania)
- Feldmann Sven (University of Melbourne)
- Fernandez-Villaverde Jesus (University of Pennsylvania)
- Fohlin Caroline (Johns Hopkins University)
- Fox Jeremy T. (University of Chicago)
- Frank Murray Z.(University of Minnesota)
- Frenzen Jonathan (University of Chicago)
- Fuchs William (University of Chicago)
- Fudenberg Drew (Harvard University)
- Gabaix Xavier (New York University)
- Gao Paul (Notre Dame University)
- Garicano Luis (University of Chicago)
- Gerakos Joseph J. (University of Chicago)
- Gibbs Michael (University of Chicago)
- Glomm Gerhard (Indiana University)
- Goettler Ron (University of Chicago)
- Goldin Claudia (Harvard University)
- Gordon Robert J. (Northwestern University)
- Greenstone Michael (Massachusetts Institute of Technology)
- Guadalupe Maria (Columbia University)
- Guerrieri Veronica (University of Chicago)
- Hagerty Kathleen (Northwestern University)
- Hamada Robert S. (University of Chicago)
- Hansen Lars (University of Chicago)
- Harris Milton (University of Chicago)
- Hart Oliver (Harvard University)
- Hazlett Thomas W. (George Mason University)
- Heaton John (University of Chicago)
- Heckman James (University of Chicago - Nobel Laureate)
- Henderson David R. (Hoover Institution)
- Henisz, Witold (University of Pennsylvania)
- Hertzberg Andrew (Columbia University)
- Hite Gailen (Columbia University)
- Hitsch Günter J. (University of Chicago)
- Hodrick Robert J. (Columbia University)
- Hopenhayn Hugo (UCLA)
- Hurst Erik (University of Chicago)
- Imrohoroglu Ayse (University of Southern California)
- Isakson Hans (University of Northern Iowa)
- Israel Ronen (London Business School)
- Jaffee Dwight M. (UC Berkeley)
- Jagannathan Ravi (Northwestern University)
- Jenter Dirk (Stanford University)
- Jones Charles M. (Columbia Business School)
- Kaboski Joseph P. (Ohio State University)
- Kahn Matthew (UCLA)
- Kaplan Ethan (Stockholm University)
- Karolyi, Andrew (Ohio State University)
- Kashyap Anil (University of Chicago)
- Keim Donald B (University of Pennsylvania)
- Ketkar Suhas L (Vanderbilt University)
- Kiesling Lynne (Northwestern University)
- Klenow Pete (Stanford University)
- Koch Paul (University of Kansas)
- Kocherlakota Narayana (University of Minnesota)
- Koijen Ralph S.J. (University of Chicago)
- Kondo Jiro (Northwestern University)
- Korteweg Arthur (Stanford University)
- Kortum Samuel (University of Chicago)
- Krueger Dirk (University of Pennsylvania)
- Ledesma Patricia (Northwestern University)
- Lee Lung-fei (Ohio State University)
- Leeper Eric M. (Indiana University)
- Leuz Christian (University of Chicago)
- Levine David I.(UC Berkeley)
- Levine David K.(Washington University)
- Levy David M. (George Mason University)
- Linnainmaa Juhani (University of Chicago)
- Lott John R. Jr. (University of Maryland)
- Lucas Robert (University of Chicago - Nobel Laureate)
- Luttmer Erzo G.J. (University of Minnesota)
- Manski Charles F. (Northwestern University)
- Martin Ian (Stanford University)
- Mayer Christopher (Columbia University)
- Mazzeo Michael (Northwestern University)
- McDonald Robert (Northwestern University)
- Meadow Scott F. (University of Chicago)
- Mehra Rajnish (UC Santa Barbara)
- Mian Atif (University of Chicago)
- Middlebrook Art (University of Chicago)
- Miguel Edward (UC Berkeley)
- Miravete Eugenio J. (University of Texas at Austin)
- Miron Jeffrey (Harvard University)
- Moretti Enrico (UC Berkeley)
- Moriguchi Chiaki (Northwestern University)
- Moro Andrea (Vanderbilt University)
- Morse Adair (University of Chicago)
- Mortensen Dale T. (Northwestern University)
- Mortimer Julie Holland (Harvard University)
- Muralidharan Karthik (UC San Diego)
- Nanda Dhananjay (University of Miami)
- Nevo Aviv (Northwestern University)
- Ohanian Lee (UCLA)
- Pagliari Joseph (University of Chicago)
- Papanikolaou Dimitris (Northwestern University)
- Parker Jonathan (Northwestern University)
- Paul Evans (Ohio State University)
- Pejovich Svetozar (Texas A&M University)
- Peltzman Sam (University of Chicago)
- Perri Fabrizio (University of Minnesota)
- Phelan Christopher (University of Minnesota)
- Piazzesi Monika (Stanford University)
- Piskorski Tomasz (Columbia University)
- Rampini Adriano (Duke University)
- Reagan Patricia (Ohio State University)
- Reich Michael (UC Berkeley)
- Reuben Ernesto (Northwestern University)
- Roberts Michael (University of Pennsylvania)
- Robinson David (Duke University)
- Rogers Michele (Northwestern University)
- Rotella Elyce (Indiana University)
- Ruud Paul (Vassar College)
- Safford Sean (University of Chicago)
- Sandbu Martin E. (University of Pennsylvania)
- Sapienza Paola (Northwestern University)
- Savor Pavel (University of Pennsylvania)
- Scharfstein David (Harvard University)
- Seim Katja (University of Pennsylvania)
- Seru Amit (University of Chicago)
- Shang-Jin Wei (Columbia University)
- Shimer Robert (University of Chicago)
- Shore Stephen H. (Johns Hopkins University)
- Siegel Ron (Northwestern University)
- Smith David C. (University of Virginia)
- Smith Vernon L.(Chapman University- Nobel Laureate)
- Sorensen Morten (Columbia University)
- Spiegel Matthew (Yale University)
- Stevenson Betsey (University of Pennsylvania)
- Stokey Nancy (University of Chicago)
- Strahan Philip (Boston College)
- Strebulaev Ilya (Stanford University)
- Sufi Amir (University of Chicago)
- Tabarrok Alex (George Mason University)
- Taylor Alan M. (UC Davis)
- Thompson Tim (Northwestern University)
- Tschoegl Adrian E. (University of Pennsylvania)
- Uhlig Harald (University of Chicago)
- Ulrich, Maxim (Columbia University)
- Van Buskirk Andrew (University of Chicago)
- Veronesi Pietro (University of Chicago)
- Vissing-Jorgensen Annette (Northwestern University)
- Wacziarg Romain (UCLA)
- Weill Pierre-Olivier (UCLA)
- Williamson Samuel H. (Miami University)
- Witte Mark (Northwestern University)
- Wolfers Justin (University of Pennsylvania)
- Woutersen Tiemen (Johns Hopkins University)
- Zingales Luigi (University of Chicago)
- Zitzewitz Eric (Dartmouth College)
Here’s the letter.They are not alone. See this, this, this, this, this, this and this.
Posted by News LI Editor · Filed Under Business
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One Response to “Bailout: It’s Time to Start Listening - No More Price Fixing”
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Bravo!
- Posted by: Cyd Malone