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Saturday, September 27, 2008

Bailout blues

Barney Frank says that he wants House Republican support for the bailout plan, even if they don’t need their votes to pass something and get Bush to sign it. He said because it’s economic everybody needs to have confidence in it. To me this suggests that Democrats and Republicans are colluding again. Why aren’t the mechanisms rock-solid objective and automatic?

Also I heard on NPR’s Marketplace Money that the yield on U.S. T-bills was hovering around zero and had even gone negative for a while. They said the T-bill is the safest investment in the world.

Based on what little we know, it seems that if they don’t pass the bailout, there will be a run on the banks, and if they do pass the bailout, there will be high inflation. The cleanest and fairest solution may be to backstop the FDIC, but not the stock market. Whereas stock investors knew they were taking a risk, bank depositors did not. Maybe run that one past your senator or congressperson.


At Sun Sep 28, 01:41:00 PM CDT, Blogger Ted Wong said...

It doesn't matter what we tell our congress person.

1) Our government is ineffectual at solving large problems such as the financial crisis.

2) Only the big players make a difference.

At Fri Oct 03, 03:58:00 PM CDT, Blogger Tom Cleland said...

Happy Birthday Ted!


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