Wall Street ‘yes,’ economists ‘no’ — what’s your call?
Economists Joseph Stiglitz and Paul Krugman separately blasted the plan. Stiglitz told Reuters that the plan will rob taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak.
“The Geithner plan is very badly flawed,” Stiglitz said. “Quite frankly, this amounts to robbery of the American people. I don’t think it’s going to work because I think there’ll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer.”
Krugman, a columnist for the New York Times who received his Nobel Prize in Economics last year, said of the plan: “This is more than disappointing. In fact, it fills me with a sense of despair … Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.”
More on the toxic asset plan: