Thursday, October 02, 2008

Economists on the Bailout

As I mentioned yesterday regarding congressman Brian Baird, I am right and he is wrong. Now what is this guy doing in congress?

All the economists criticized the government-mandated accounting rules, so-called “mark to market.” While these rules were reasonable in principle, they were applied to situations that they weren’t meant to apply to. Paul Evans, an economics professor at Ohio State University, explained that you run into real problems when “someone trades a tiny fraction of a particular type of asset at a very low price to clear it off the books. It is then used to estimate the price of all these other assets.”

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