Tuesday, March 24, 2009

Paul Krugman is WRONG about The Obama TARP Plan

Economist Paul Krugman has been attacking the Obama / Geitner Troubled Assets Relief Plan (TARP) as using taxpayer money to pay investors to take the assets off bank's hands. But he offers no alternative. Paul is wrong in that he wants the "bad assets" to remain on bank statements, but for what? To continue to freeze the credit market? His blog posts in the NY Times on this matter are intellectually sloppy at best. That -- for a Nobel Prize winner -- is terrible.

Krugman sets up straw person examples to prove the idea that the investor spends little of his or her own money -- but that is the idea. I do not know why he comes up with these half-baked statements at all. Perhaps he is just angry that Obama did not pick him to be economic advisor.

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