Bailouts in Perspective

Barry Ritholz calculates that the various government bailouts under way amount to $4.6165 trillion dollars.  To put it in context, he shows the cost of some other government expenditures you might have heard of: • Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion • Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion • Race to the Moon: Cost: $36.4 ...

Romney Changes Mind on Auto Bailout

In a NYT op-ed entitled "Let Detroit Go Bankrupt," Mitt Romney argues that Congress should let creative destruction do its job. IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed. Without that bailout, Detroit will need ...

Norquist’s Bailout Plan

Grover Norquist has applied for a $700 billion subsidy from the Treasury.  His appeal reads, in part: I have a plan for this $700 billion which should be just what’s needed to get the American economy going. Since the money came from the taxpayers in the first place, I propose giving it back to them. The rest is less amusing but probably ...

Bailout Tops $5 Trillion Dollars

Yay! For all the fury over Treasury Secretary Henry Paulson's $700 billion emergency economic relief fund, it seems downright puny when compared to the running total of the government's response to the credit crisis. According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an ...

Not Buying Troubled Assets After All

Remember that emergency bailout, wherein the world would come to a complete halt if the government didn't buy up all the bad loans? Hank Paulson says "Never mind." [caption id="attachment_27369" align="alignright" width="300" caption="Treasury Secretary Henry Paulson, AP/YahooNews Photo"][/caption] Treasury Secretary Henry Paulson says that the $700 billion government rescue program will not be used to purchase troubled assets as originally planned. Paulson ...

Why Not Bail Out GM?

Megan McArdle argues that those saying we should bail out General Motors and save its workers just like we did the banks and insurance companies miss the point of the bailout. Whereas a collapse of the financial sector had the ability to take down the rest of the economy with it, that's just not true in manufacturing. Besides that, propping ...

Karl Marx Was Black?!

At the risk of beating a dead horse of no specified color, one byproduct of this campaign will be to rob the word racism of what's left of its power.  Lewis Diuguid, a Kansas City Star columnist of whom I've never previously heard, is getting significant blogospheric attention for a piece titled "Shame on McCain and Palin for using an ...

Treasury to Buy Equity in U.S. Banks

Well, it looks like what I was worried about is going to happen. The Treasury Department will be buying equity in 9 of the U.S. largest banks. What I find particularly dishonest was this line, Therefore, the Treasury had little choice but to "jawbone them into taking the money in a coordinated fashion all at the same time.” ...

Hundreds of Billions More

Howard Glackman at the Tax Policy Center is saying his sources in the Federal Reserve and the financial industry that hundreds of billions more are needed to recapitalize financial institutions in trouble. That is the current bailout is just not going to work. Also fits well with the decline in the stock market we've been watching lately. My sources ...

Congress Approves Bailout

Congress has passed the bailout now that the three page bill has expanded in size a hundredfold and it has been larded with some good old pork: With the economy on the brink and elections looming, Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday and sent it to President Bush for his certain signature. The ...