Quote For The Week
Joseph Stiglitz, a Nobel Prize-winning economist and professor at Columbia University, talked about the housing bailout bill that was recently signed into law. From the CNBC website last Friday:
What bothers me from the point of view of public policy is that Freddie Mac and Fannie Mae came to the American taxpayers, asked for the right to write a blank check and Congress gave them that right.
What should have happened was corporate reorganization, keep the companies going but not protect the management, the shareholders, not even protect the creditors… The whole basis of a market economy is a system of accountability. You make decisions, you take risks, you get the upside, but you also take the downside.
These guys that are supposed to be assessing and managing risks have repeatedly failed and I think that’s what we really have to get our minds around. The fact that we had such confidence in these gurus of the financial markets… We turn to them about how to fix the system, but these are the guys that broke the system.
The amount of potential liability that we undertook when we passed that bill with that blank check— we just don’t know. This is the worst kind of public irresponsibility.
And America will probably pay dearly for it in the end…
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