History will not be kind to Paulson’s bailout plan. No question, the government had to do something, but using taxpayer money to provide corporate welfare to the rich, is just downright wrong. The American people know it. The President knows it. Congress knows it. The academics know it. And oh yeah, even the bankers know it too.
For those of you saying, the government did it before with the Savings and Loan scandal — well the government was obligated then because those banks actually took deposits that were federally insured. That is clearly not the case with this crisis.
Thus, I find it difficult to believe that Bernanke is suggesting that the government should buy these toxic mortgage assets at more than their current distressed prices. Seriously, what is wrong with this man? Has he lost his marbles? More importantly, whose side is he on? If it were the taxpayers, he definitely wouldn’t be asking Congress to pay a higher price for these toxic assets.