Dueling Economists: Who Gets The $700 Billion?
It's all about trust, or, as FDR put it, "the only thing we have to fear is fear itself." And we've seen plenty o' fear in the markets of late.
Today at noon (and available all week long) on Raw Fisher Radio, economists from George Mason University and the University of Maryland debate the wisdom of letting financial institutions collapse versus putting our faith in the bailout, however unpopular it may be here in the opening days of the new quasi-nationalized economy.
Professor David Levy of Mason argues that there is little reason to expect the American people to trust in a rescue plan when the most likely folks to collect the bulk of that $700 billion-plus that the taxpayers are putting up will be "those who are politically connected."
But economist Lawrence Ausubel of Maryland counters that the main thing that must be done right now is to stop the panic because "if you let financial institutions fall one by one, there is a lot of collateral damage."
It can be unsettling to hear a learned economist say, as Levy does on today's show, that "We're in a world right now where we don't know what a bank is." And despite their differences over the bailout--Levy's against and Ausubel's in favor--both agree that all economists are afraid of bank runs.
Fear, panic and the power of huge mountains of money to ease (or exacerbate) those fears--today on Raw Fisher Radio.
By Marc Fisher |
October 7, 2008; 11:40 AM ET
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