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Why doesn't Congress listen to advice of ECONOMISTS regarding the bailout? Instead of people who PARTICIPATED?

...in allowing the mortgage/banking industry to get where it is now?

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200 leading Economists write Congress Warning Bailout will make things Worse!

News Type: Event — Tue Sep 30, 2008 4:59 AM EDT

This letter was sent to Congress on Wed Sept 24 2008 regarding the Treasury plan as outlined on that date. It does not reflect all signatories views on subesquent plans or modifications of the bill, although some of the economists on this list added their names as recently as the 27th.

"To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come."

Signed (updated at 9/27/2008 6:00PM CT)

9 Answers

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  • 1 decade ago
    Favorite Answer

    The pressure to make a deal is coming from Big Time creditors who threaten to bring the government to its knees if they dont get some sort of agreement on the financial rescue plan.

    If they ever do agree on a financial rescue plan, I'd hope that three things occur.

    1. The money that is to be given for the rescue plan should be monthly payments.

    2. The money that is to be given is "traceable" in that who is to get it and where it is to be deposited.

    3. That they continue to investigate how this country was brought to its knees when "safeguards" were supposedly already in place to prevent this kind of thing from occuring.

    We don't need another great depression. What an oxymoron, "Great Depression". Sounds like someone was bragging.

    see HR 3997 http://www.congress.org/congressorg/home/

    In this bill I don't see any responsibility for who gets the money and where it is to be deposited. I do see how it is to be used.

  • Anonymous
    1 decade ago

    It defies all reason. Apart from the reason that the big investors they are bailing out are the big donors to both parties.

    They don't want to sh**t where they eat, babe!! That;s all there is to it!!

    And economic insanity or not, they will continue to push for it while ever the dollars from those investors keep coming their way.

    Source(s): I don't trust bankers or poltiicians, especially not when they're working together!!!
  • Anonymous
    1 decade ago

    honest I'm not a well educated man but If some one gave me some "wise advices" like this ; I'll listen them.

    but they didn't .. because greedy fat cat's makes so much noise.

    I'm not a American but I wanna something about hem .. If they did this kind of greedy shits in my country we send him to jail for long time.

    .. and we put theme at very same cells with drug dealers & sex maniacs at there for "penetration"

    I've read something about 175USD for a Hamburger sold at The Wall Street Burger Shoppe or 70million dollar salary for a year and guess what .. disgusting, I simply hate that kind of Arrogant act's.

    just like I said .. I'm a simple man who had simple minds. IMHO they will go to jail for common good.

  • 1 decade ago

    B/c Congress is dominated by Democrats who think they know how to run everything better than anyone else, including the economy and the rest of our lives. Most of them have been in office for WAY too long--so long that absolute power has corrupted them absolutely. Why? B/c we don't have term limits in Congress!

    Republicans in the House listened to their constituents (thank God!) and didn't support the first $700B bailout bill.

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  • Anonymous
    1 decade ago

    All the more reason you need Obama.

    He said in his speech this morning that he will put a team of experts over each agency to supervise and report back to him.

    THAT is what's needed to make sure there isn't waste/abuse/corruption/collusion. Trust me, was in govt purchasing/tendering for 20 years and very rarely do you see anyone popping in to make sure anyone was doing the job they were hired to do! I kind of had that privilege of making it run efficiently but corruption eventually ousted me.

  • Anonymous
    1 decade ago

    Congress doesn't listen to anyone, including the people who put them in office. As soon as someone is elected to Congresss they immediately know more than anyone and always convince themselves that their course of action is the best one. Listen to economists, listen to people who are experts in their field, Nah, no way.

  • Anonymous
    1 decade ago

    Economists are like Philosophers: for any point of view, you can find someone who holds it.

    Also: there's no shortage of economists in banks. They have plenty of blame to share.

  • Anonymous
    1 decade ago

    Because the economists would have told them not to do it, and that wasn't what they wanted to hear.

  • jk
    Lv 5
    1 decade ago

    Stupid is..stupid does.

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