Bailouts, Buy-Ins, and Ballyhoo: Forget K Street, Save Main Street, and You Will Save Wall Street - And Paulson - As Well
Challenge, Vol. 52, 2009
24 Pages Posted: 2 Oct 2008 Last revised: 11 Jan 2009
Date Written: October 1, 2008
I propose here a critical amendment to Treasury Secretary Paulson's proposed "bailout" plan for troubled financial institutions. If we channel the plan through FHA and its recently re-federalized GSE siblings, I argue, we shall neatly avoid all objections currently raised to the plan - those sounding in unconstitutional delegation, moral hazard, and inequity alike. Rather than "rescuing Main Street by rescuing Wall Street" through new Treasury authority, in short, we should employ institutional means already at our disposal by which we shall readily "rescue Wall Street by rescuing Main Street."
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