Here's the concluding paragraph from his recent blog post:
Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. [italics are Spot's]
In other words, the plan doesn't really address the credit crunch problem. He apparently doesn't like TARP much.
There are other economists who have their reservations, too:
A funny thing happened in the drafting of the largest-ever U.S. government intervention in the financial system. Lawmakers of all stripes mostly fell in line, but many of the nation's brightest economic minds are warning that the Wall Street bailout's a dangerous rush job.
President Bush and his Treasury secretary, former Goldman Sachs chief executive Henry Paulson, have warned of imminent economic collapse and another Great Depression if their rescue plan isn't passed immediately.
Is that true?
"It's more hype than real risk," said James K. Galbraith, a University of Texas economist and son of the late economic historian John Kenneth Galbraith. "A nasty recession is possible, but the bailout will not cure that. So it's mainly relevant to the financial industry."
Nearly two hundred academic economists (including three Nobel Prize winners) signed a letter opposing the Paulson plan:
But almost 200 academic economists -- who aren't paid by the institutions that could directly benefit from the plan but who also may not have recent practical experience in the markets -- have signed a petition organized by a University of Chicago professor objecting to the plan on the grounds that it could create perverse incentives, that it is too vague and that its long-run effects are unclear. Sen. Richard C. Shelby (Ala.), ranking Republican on the Budget Committee, brandished that letter yesterday afternoon as he explained his opposition to the bailout outside a bipartisan summit at the White House. The petition did not advocate any specific plan, including that offered yesterday by House Republicans.
(Shelby is about the only Senate Republican who has been vocal in opposition to the bailout, as least as far as Spot is aware.)
Here's the letter.
Did Professor Banaian sign the letter, Spotty?
No, he didn't, grasshopper.
Spot doesn't know why not. Maybe he didn't want to; maybe he wasn't asked. It is of no moment. Galbraith and Dr. Doom didn't sign it either. What does matter is that a pretty respected group of economists from around the country did take it upon themselves to get up a petition against the Treasury plan.
What also matters is that "crisis" is not at a level that the House Republicans can't play politics with it. If Nancy Pelosi makes this happen in the House, she had better make sure that all of the House Republicans are there as human shields.