Thomas Sowell writes:
"Financial institutions are not being bailed out as a favor to them or their stockholders..."
"The real point is to avoid a major contraction of credit that could cause major downturns in output and employment, ruining millions of people, far beyond the financial institutions involved. If it was just a question of the financial institutions themselves, they could be left to sink or swim. But it is not."
"But bailing out people who made ill-advised mortgages makes no more sense that bailing out people who lost their life savings in Las Vegas casinos."
OK, Tommy baby (I now treat him with such disrespect as he has shown himself to be a mere pitchman for banking interests), how about this:
That $700 billion could completely pay off about 3.5 million $200,000 mortgages. If the Treasury gave people in risk of foreclosure that money, those people would keep their homes (yes, yes, the money would need to be in the form of coupons only good for mortgage payments), and all of that bad mortgage-backed security debt would no longer be bad -- the financial system would be saved!
So if you're goal isn't merely to save the wealthy investment bankers who fund your chair at the Hoover institute and allow them to seize the homes of a lot of poor people, why not back my plan instead of Paulson's?