Sep 17, 2008

Barney Frank and the "Free Market"

So, Barney Frank wants to create an entirely new Federal Agency that would buy up worthless securities, and then sell them for pennies on the dollar (if it can find any buyers at all). The inflation that this would cause is mind-boggling. It is essentially the proposal of a direct tax levied against the plebes (you and me) to prop up these banks. The banks would essentially get out from under the worthless paper at some negotiated price that allows them to dump the "assets" without suffering any real losses. But the NY Times reporter who wrote this piece doesn't even ask the question of who is going to buy the worthless securities from the government? Even at 10c on the dollar, who would want them? This is a blatant rip-off of the taxpayer but nobody dares call it that.
"The question is, and it's just a question, is, 'Are we at the point where the private market has made so many bad decisions and is so depressed that it can't get out from under?' " said Mr. Frank, who is planning to hold a hearing next week to explore whether Congress should create an agency to help the markets dispose of hard-to-sell assets.
I guess by qualifying this as "just a question" he can avoid scrutiny.......

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