…by the same people who got us into the problem.
Think about it. In July, Sen Charles Schumer asserted publicly that IndyMac, “Could face a collapse,” precipitating the bank run that the Senator assures us had nothing to do with the bank’s collapse.
That was the week after Senator Dodd assured us that everything was fine at Fanny Mae and Freddie Mac, “Just fine.”
This week Majority Leader Harry Reid caused a huge drop in insurance company stocks, and your 401k, by announcing in a press conference that a major insurer was “about to go bankrupt.”
Main Street vs. Wall Street
By Arnold Kling
The financial bailout isn’t as bad as Main Street thinks. It’s worse.
…The American people are being given two reasons to support the bailout, namely, that it is needed to prevent another Great Depression and that it will actually earn a profit for taxpayers. Both rationales are suspect.
The most credible evidence that the Main Street economy is in danger is that “Ben Bernanke is worried, so everyone should be worried.” In fact, no economic textbook, including Bernanke’s, offers any theory that predicts depression as a result of consolidation in the financial sector.
…The other claim that is made on behalf of the bailout is that Treasury will make a profit for taxpayers by buying distressed mortgage-related assets. However, this claim is being made by the same people who did not see the crisis coming, in large part because they do not understand how the values of these sorts of securities behave.
Read the whole thing