Sunday, October 5, 2008

"Fraud... favoritism... and blind mistakes"

A Los Angeles Times' article headed "Mechanics of bail out remain unclear", at the bottom of Page One of the Sunday News' Business Section delves into the complicated issues raised by NewsLanc in response to a dimwitted Sept. 30 editorial in the New Era. (See "New Era Panics" at

The Times quotes Lawrence E. Harris, former chief economist of the Securities and Exchange Commission as referring as follows to the $700 billion dollars Bail Out: "That's a massive amount of power that has the potential for, if not fraud, then favoritism and blind mistakes."

The article goes on to state that Treasury Secretary "Paulson and Ben Bernanke have said the troubled mortgage loans owned by banks would be worth more if they can be held to maturity than if forced into the market now in a fire sale. That gives the Treasury a rationale for paying banks more than current valuations, on the assumption that it will make a profit down the line."

Do you agree with the New Era that conservative House Republicans and some Democrats who voted against the Bail Out were acting in a "despicable" manner by not wanting tax payers to pay inflated prices for securities so that investors would not lose money?