[eDebate] why does obama refuse to suspend mark to market?
Mon Mar 9 10:48:14 CDT 2009
It's a bush 2007 policy that was the major factor in the credit collapse. FDR suspended mark to market in 1938 for the reason that it unnecessarily destroys banks. The bailout will either not work or work slower if mark to market is not suspended.
The question is: why does Obama not change this bush policy?
1) Ignorance. He does not know the history of mark to market and why it spirals economic downturns.
2) Nationalization is the goal. If Obama suspends mark to market, a no cost solution bottoms out the recession.
i thought Obama was going to form a team of rivals and get information from multiple perspectives in the spirit of policy experimentation. Are you telling me no one in his administration has suggested the possibility of suspending mark to market? Are they that miserable and clueless? Or do they have another agenda?
here's Forbes opinion last Friday.
yes, there is now an enormous amount of bad mortgage debt but in the 80s and 90s there was an enormous amount of bad third world debt with no crisis of this magnitude because FDR's suspension of mark to market accounting remained in place. Bush reinstated mark to market in 2007 and Obama is either completely stupid or using the negative effects to accomplish his own ends.
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