ANP: View Point - Economist Dean Baker says we don't need the bailout
Bio
Dean Baker is co-director of The Center for Economic and Policy Research (CEPR). He is the author of several books including, The United States Since 1980; Social Security: The Phony Crisis (with Mark Weisbrot); and The Benefits of Full Employment (with Jared Bernstein). He appears frequently on TV and radio programs, including CNN, CBS News, PBS NewsHour, and National Public Radio.
Economist Dean Baker shares his thoughts on the bailout panic during a public panel held at the Institute for Policy Studies on Sept 30, 2008. Dr. Baker is the Co-Director of the Center for Economic and Policy Research in Washington, DC and a columnist for The Washington Post and Atlantic Monthly.
How could we do away with all the banks that are too big to fail, without a complete meltdown? In my opinion any enterprise that is too big to fail should be split into smaller companies that are small enough to fail. We used to use a "quaint" "obsolete" Sherman Antitrust Act to prevent too big to fails from forming. Maybe we need an up to date, reinforced, stronger antitrust act to take up the slack. We could certainly use a few thousand lawyers trained in Antitrust Legislation. We should have found a way to let the Big Banks fail without causing a super meltdown which would have incurred because of the announcement by the know it all's that we were in a meltdown. Once they said so, it was a self-fulfilling prophecy. They had fabricated our point of no return and we had to bail them out.
piya 2008-10-04
hey.. im new to the subject of politics and would like some help. so my question is, what would happen if the bailout plan is not passed. if wall street is not recovered,than how would the economy be recovered? since wall street is a huge part of the economy.
thefleck 2008-10-02
I'm against the "bailout" in its current form....but to be fair, there is some cause for alarm. The crisis is not with the banks but with the credit markets. With frozen credit markets, businesses and people cannot get loans. When that happens, businesses and the public suffer...businesses can't make payroll, students don't get loans, you can't afford that car or home, etc.
So there is some cause for real concern. The real questions are: How much concern, and how much is the bailout going to fix the problem? The answer to the latter question was addressed well by Dr. Baker. This solution does not fix the problem, it keeps a broken system afloat...it's another shot of morphine to an addict. The other great point was that nobody seems to be asking the Treasury why they let this occur to begin with. By causing a panic they displace the focus off where it should be. The public is no less angry, but at least we're pointing our fingers at Wall Street and not at Capitol Hill.
Rane Seraph 2008-10-02
Why must the government continually use scare tactics to get things done? It seems that nothing has changed since the Feudal System. The working class is still being pushed around by the "nobles".
Gabriel White 2008-10-02
Interesting. I know zero about economics, but why is the collapse of such an opportunistic banking system such a cause for alarm? Why does the US financial system need to be so reliant on these lending institutions? Shouldn't a "bail out" or "rescue plan" be more of a "rethink"?
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