The Times’ Joe Nocera has a decent column but I want to quibble with this part:
…readers have reacted angrily to my suggestion that we find ways to keep people from being evicted from their homes. It is not fair, they reply, that their neighbors who were greedy during the bubble should get a taxpayer bailout while those who weren’t get nothing. Even when I point out that foreclosures hurt everyone’s property values, they are unmoved. The seeming injustice overpowers their rational selves. And you know what? It is unjust. But there is a larger good at stake: the economic health of the country.
I think Nocera here is overlooking the scandal that was mortgage lending in America during the bubble. Sure, lots of people knew what they were getting into, but lots of people didn’t, too.
The infamous $700 billion program) or what kind of collateral it’s taking on in exchange Fed Chairman Ben. Bloomberg has been excellent in watchdogging the Federal Reserve various bailouts, even suing the government last week for the information.
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Brian
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Posted by Brian2008 on Tue 11 Nov 2008 at 07:00 AM
Now the Fed is desperate because the hundreds of billions of dollars of mortgage-backed securities (MBS) in the banks vaults have bankrupt the entire system and the Fed's balance sheet is ballooning by the day. The market for MBS will not bounce back in the foreseeable future and the banks are unable to roll-over their short term debt. Game over. The Federal Reserve itself is in danger. So, it's on to Plan B; which is to dump all the toxic sludge on the taxpayer before he realizes that the whole system is cratering and his life is about to change forever. It's called the Paulson Plan, a $700 billion boondoggle which has already been disparaged by every economist of merit in the country.
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Jessica.
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Posted by Jessica on Mon 17 Nov 2008 at 11:34 PM