Thursday, September 25, 2008
re: "The White House is trying to argue that the bailout isn't so bad, it might not really cost $700 billion because some of the assets will appreciate in value. / ...[snip]... / But from my perspective, the budgetary gains and losses are a trivial part of the story. Those are a transfer from taxpayers to the current holders of the assets. My real concern is the incentive effects for future prudence (reduced) and the weird misallocations of capital that will inevitably result. I also am deeply concerned about the rule of law and how such a program can possibly run in a non-arbitrary way. /If the government makes money on these transactions, it actually depresses me all the more."