Saturday, September 20, 2008

Hoover versus McCain

Thank you, Paul Krugman, for pointing out an interesting coincidence.

Herbert Hoover, Oct. 25, 1929: "The fundamental of business is sound."

John McCain, September 16, 2008: "The fundamentals of our economy are strong."

Time to pay for deregulation. We'll just blame Alan Greenspan for this one, just like all the other flaws of an economy. After all, being Fed chairman gives you sole power of the immediate and long-run health of the economy. Right? Excuse my sarcasm, but I hate scapegoating. Particularly if it is Alan Greenspan, a man I give much respect to.

President Bush announced with Treasury Secretary Henry Paulson, a proposal to buy up highly leveraged investment banks, hoping to add liquidity to the markets. Unfortunately, this seems to me like putting a bandaid on the problem and offering incentives for banks to increase risk in the future. Not to mention the bad money that is being created to buy these banks, probably at a cost that is above what they are worth, placing the burden on taxpayers. we'll see what happens, but I have a bad feeling about the prospects of government taking over bad assets with taxpayer money.

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