Saturday, March 28, 2009

The Attack from the Left on the Obama/Geithner Rescue Plan

They really don't have a clue as to how to fix things, but FT has a nice piece showing that left wing economists sure do get what the rescue plan is really all about.

Edward Luce from FT reports:

The liberal backlash against President Barack Obama has begun with many prominent left-leaning economists in the US attacking the administration’s plans
to bail out the banks.

Paul Krugman describes the toxic asset purchase plan as “cash for trash”.Jeffrey Sachs calls it “a thinly veiled attempt to transfer hundreds of billions of US taxpayer funds to the commercial banks”. Robert Reich depicts Tim Geithner, Treasury secretary, as a prisoner of Wall Street while Joe Stiglitz says the plan “amounts to robbery of the American people”.
Reich is even good on the continuity between the Paulson-Geithner balout the bankers approach. Luce writes:

Mr Reich now talks of the “Paulson-Geithner approach” to demonstrate what he sees as the continuity between Hank Paulson, George W. Bush’s last Treasury secretary, and the current administration.
Amazingly, as much as they correctly understand what is going on, they are way off base on the way to fix things. For example, "Mr Reich says bank nationalisation is the only answer to today’s crisis."

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