Cuando veas la barbas de tu vecino en fuego, remoja la tuya en agua...reza un viejo decir de nuestro pueblo. De cara a las próximas elecciones, todos los puertorriqueños debemos exigir de todos nuestros líderes políticos que nos expliquen en detalle el tema de la reglamentación, el de la privatización y de cómo habrán de enfrentar los problemas económicos de Puerto Rico... ¡Basta de cancioncitas y de promesas irresponsables! ¿Hay que exigir que nos expliquen qué harán, por qué y cómo? Y muchas interrogantes más...BFC
Editorial
Hard Truths About the Bailout
Published: September 19, 2008
The fifth major federal bailout this year — after Bear Stearns, Fannie Mae, Freddie Mac and the American International Group — is now in the works. Taxpayers have every right to be alarmed and angry. The latest plan is not necessarily a bad one, and officials had to move quickly to prevent credit markets from seizing up. But make no mistake, this crisis could have been avoided if regulators had enforced rules and officials had dared to question risky lending and other dubious practices.
If done right, this bailout could succeed where the others have failed and remove the threat of a systemwide financial collapse. But the upfront cost will be enormous. So will the risk of losses in the long run — on top of the risks already incurred.
The new plan would commit taxpayer money to buy hundreds of billions of dollars of troubled loans and other mortgage-related securities from banks and Wall Street firms. It is based on the reasonable premise that as long as institutions are stuck with those assets, the flow of credit, the economy’s lifeblood, will be constrained, or as in the past week, all but frozen.
The new plan would commit taxpayer money to buy hundreds of billions of dollars of troubled loans and other mortgage-related securities from banks and Wall Street firms. It is based on the reasonable premise that as long as institutions are stuck with those assets, the flow of credit, the economy’s lifeblood, will be constrained, or as in the past week, all but frozen.
Congress, with one eye on this week’s volatile Dow and the other on November’s election, could authorize the plan as early as next week.
It is painfully clear that the financial system will not rebound on its own from the excessive lending and borrowing of the Bush years and the credit collapse in their wake. The one-bailout-at-a-time approach hasn’t worked. And modest steps are no longer an option.
Lawmakers and administration officials must be prepared to tell Americans the full, hard truths about this plan:
What is this going to cost the taxpayers and who decides? It’s generally believed that many of the troubled assets that the government would buy will, in time, be worth more than they can fetch in today’s chaotic markets. That’s far from a sure thing. The assets are tied to housing, so their value will depend on how far prices fall, how many people end up defaulting and how long it takes before housing rebounds — all big unknowns.
For those reasons, it’s important for Americans to know who is going to decide what is the right purchase price for these assets. Wall Street will have a role, of course, but outside experts should be allowed to analyze the results. Americans also need to know how the process will be monitored to ensure that taxpayers’ interests are protected. If the government gets the price right, the upfront outlay could be recouped when it later sells. If it overpays, the taxpayer is stuck with the loss.
How will Congress balance the bailout of Wall Street and the needs on Main Street? If financial markets stabilize, all Americans will benefit. But Congress must do more to provide direct help to struggling American families. Lawmakers should use the bailout legislation to also extend unemployment benefits, bolster food stamps and provide aid to state and local governments to provide health care and other services that are especially important during tough times.
The administration and lawmakers also need to tell Americans that the era of cheap and easy money is over and that there are more tough times to come.
Whose taxes will have to go up? How will the government help to create the jobs of the future? How will the most vulnerable Americans be protected? And they need to explain that the cost of the bailouts will compete with other spending.
Finally, Americans need to be told a more fundamental truth: This crisis is the result of a willful and systematic failure by the government to regulate and monitor the activities of bankers, lenders, hedge funds, insurers and other market players. All were playing high-stakes poker with the financial system, but without adequate transparency, oversight or supervision.
The regulatory failure, in turn, was grounded in the Bush administration’s magical belief that the market, with its invisible hand, works best when it is left alone to self regulate and self correct. The country is now paying the price for that delusion.
If lawmakers and administration officials really want to restore confidence, the bailout must be only a first step. The hard work of establishing and enforcing the regulations that are needed for a truly trustworthy financial system, still lies ahead.
But make no mistake, this crisis could have been avoided if regulators had enforced rules and officials had dared to question risky lending and other dubious practices.
The new plan would commit taxpayer money to buy hundreds of billions of dollars of troubled loans and other mortgage-related securities from banks and Wall Street firms. It is based on the reasonable premise that as long as institutions are stuck with those assets, the flow of credit, the economy’s lifeblood, will be constrained, or as in the past week, all but frozen.
Congress, with one eye on this week’s volatile Dow and the other on November’s election, could authorize the plan as early as next week.
It is painfully clear that the financial system will not rebound on its own from the excessive lending and borrowing of the Bush years and the credit collapse in their wake. The one-bailout-at-a-time approach hasn’t worked. And modest steps are no longer an option.
Lawmakers and administration officials must be prepared to tell Americans the full, hard truths about this plan:
What is this going to cost the taxpayers and who decides? It’s generally believed that many of the troubled assets that the government would buy will, in time, be worth more than they can fetch in today’s chaotic markets. That’s far from a sure thing. The assets are tied to housing, so their value will depend on how far prices fall, how many people end up defaulting and how long it takes before housing rebounds — all big unknowns.
For those reasons, it’s important for Americans to know who is going to decide what is the right purchase price for these assets. Wall Street will have a role, of course, but outside experts should be allowed to analyze the results. Americans also need to know how the process will be monitored to ensure that taxpayers’ interests are protected. If the government gets the price right, the upfront outlay could be recouped when it later sells. If it overpays, the taxpayer is stuck with the loss.
How will Congress balance the bailout of Wall Street and the needs on Main Street? If financial markets stabilize, all Americans will benefit. But Congress must do more to provide direct help to struggling American families. Lawmakers should use the bailout legislation to also extend unemployment benefits, bolster food stamps and provide aid to state and local governments to provide health care and other services that are especially important during tough times.
The administration and lawmakers also need to tell Americans that the era of cheap and easy money is over and that there are more tough times to come. Whose taxes will have to go up? How will the government help to create the jobs of the future? How will the most vulnerable Americans be protected? And they need to explain that the cost of the bailouts will compete with other spending.
Finally, Americans need to be told a more fundamental truth: This crisis is the result of a willful and systematic failure by the government to regulate and monitor the activities of bankers, lenders, hedge funds, insurers and other market players. All were playing high-stakes poker with the financial system, but without adequate transparency, oversight or supervision.
The regulatory failure, in turn, was grounded in the Bush administration’s magical belief that the market, with its invisible hand, works best when it is left alone to self regulate and self correct. The country is now paying the price for that delusion.
If lawmakers and administration officials really want to restore confidence, the bailout must be only a first step. The hard work of establishing and enforcing the regulations that are needed for a truly trustworthy financial system, still lies ahead.
A version of this article appeared in print on September 20, 2008, on page A18 of the New York edition.
Editorial
Hard Truths About the Bailout
Published: September 19, 2008
The fifth major federal bailout this year — after Bear Stearns, Fannie Mae, Freddie Mac and the American International Group — is now in the works. Taxpayers have every right to be alarmed and angry. The latest plan is not necessarily a bad one, and officials had to move quickly to prevent credit markets from seizing up. But make no mistake, this crisis could have been avoided if regulators had enforced rules and officials had dared to question risky lending and other dubious practices.
If done right, this bailout could succeed where the others have failed and remove the threat of a systemwide financial collapse. But the upfront cost will be enormous. So will the risk of losses in the long run — on top of the risks already incurred.
The new plan would commit taxpayer money to buy hundreds of billions of dollars of troubled loans and other mortgage-related securities from banks and Wall Street firms. It is based on the reasonable premise that as long as institutions are stuck with those assets, the flow of credit, the economy’s lifeblood, will be constrained, or as in the past week, all but frozen.
The new plan would commit taxpayer money to buy hundreds of billions of dollars of troubled loans and other mortgage-related securities from banks and Wall Street firms. It is based on the reasonable premise that as long as institutions are stuck with those assets, the flow of credit, the economy’s lifeblood, will be constrained, or as in the past week, all but frozen.
Congress, with one eye on this week’s volatile Dow and the other on November’s election, could authorize the plan as early as next week.
It is painfully clear that the financial system will not rebound on its own from the excessive lending and borrowing of the Bush years and the credit collapse in their wake. The one-bailout-at-a-time approach hasn’t worked. And modest steps are no longer an option.
Lawmakers and administration officials must be prepared to tell Americans the full, hard truths about this plan:
What is this going to cost the taxpayers and who decides? It’s generally believed that many of the troubled assets that the government would buy will, in time, be worth more than they can fetch in today’s chaotic markets. That’s far from a sure thing. The assets are tied to housing, so their value will depend on how far prices fall, how many people end up defaulting and how long it takes before housing rebounds — all big unknowns.
For those reasons, it’s important for Americans to know who is going to decide what is the right purchase price for these assets. Wall Street will have a role, of course, but outside experts should be allowed to analyze the results. Americans also need to know how the process will be monitored to ensure that taxpayers’ interests are protected. If the government gets the price right, the upfront outlay could be recouped when it later sells. If it overpays, the taxpayer is stuck with the loss.
How will Congress balance the bailout of Wall Street and the needs on Main Street? If financial markets stabilize, all Americans will benefit. But Congress must do more to provide direct help to struggling American families. Lawmakers should use the bailout legislation to also extend unemployment benefits, bolster food stamps and provide aid to state and local governments to provide health care and other services that are especially important during tough times.
The administration and lawmakers also need to tell Americans that the era of cheap and easy money is over and that there are more tough times to come.
Whose taxes will have to go up? How will the government help to create the jobs of the future? How will the most vulnerable Americans be protected? And they need to explain that the cost of the bailouts will compete with other spending.
Finally, Americans need to be told a more fundamental truth: This crisis is the result of a willful and systematic failure by the government to regulate and monitor the activities of bankers, lenders, hedge funds, insurers and other market players. All were playing high-stakes poker with the financial system, but without adequate transparency, oversight or supervision.
The regulatory failure, in turn, was grounded in the Bush administration’s magical belief that the market, with its invisible hand, works best when it is left alone to self regulate and self correct. The country is now paying the price for that delusion.
If lawmakers and administration officials really want to restore confidence, the bailout must be only a first step. The hard work of establishing and enforcing the regulations that are needed for a truly trustworthy financial system, still lies ahead.
But make no mistake, this crisis could have been avoided if regulators had enforced rules and officials had dared to question risky lending and other dubious practices.
The new plan would commit taxpayer money to buy hundreds of billions of dollars of troubled loans and other mortgage-related securities from banks and Wall Street firms. It is based on the reasonable premise that as long as institutions are stuck with those assets, the flow of credit, the economy’s lifeblood, will be constrained, or as in the past week, all but frozen.
Congress, with one eye on this week’s volatile Dow and the other on November’s election, could authorize the plan as early as next week.
It is painfully clear that the financial system will not rebound on its own from the excessive lending and borrowing of the Bush years and the credit collapse in their wake. The one-bailout-at-a-time approach hasn’t worked. And modest steps are no longer an option.
Lawmakers and administration officials must be prepared to tell Americans the full, hard truths about this plan:
What is this going to cost the taxpayers and who decides? It’s generally believed that many of the troubled assets that the government would buy will, in time, be worth more than they can fetch in today’s chaotic markets. That’s far from a sure thing. The assets are tied to housing, so their value will depend on how far prices fall, how many people end up defaulting and how long it takes before housing rebounds — all big unknowns.
For those reasons, it’s important for Americans to know who is going to decide what is the right purchase price for these assets. Wall Street will have a role, of course, but outside experts should be allowed to analyze the results. Americans also need to know how the process will be monitored to ensure that taxpayers’ interests are protected. If the government gets the price right, the upfront outlay could be recouped when it later sells. If it overpays, the taxpayer is stuck with the loss.
How will Congress balance the bailout of Wall Street and the needs on Main Street? If financial markets stabilize, all Americans will benefit. But Congress must do more to provide direct help to struggling American families. Lawmakers should use the bailout legislation to also extend unemployment benefits, bolster food stamps and provide aid to state and local governments to provide health care and other services that are especially important during tough times.
The administration and lawmakers also need to tell Americans that the era of cheap and easy money is over and that there are more tough times to come. Whose taxes will have to go up? How will the government help to create the jobs of the future? How will the most vulnerable Americans be protected? And they need to explain that the cost of the bailouts will compete with other spending.
Finally, Americans need to be told a more fundamental truth: This crisis is the result of a willful and systematic failure by the government to regulate and monitor the activities of bankers, lenders, hedge funds, insurers and other market players. All were playing high-stakes poker with the financial system, but without adequate transparency, oversight or supervision.
The regulatory failure, in turn, was grounded in the Bush administration’s magical belief that the market, with its invisible hand, works best when it is left alone to self regulate and self correct. The country is now paying the price for that delusion.
If lawmakers and administration officials really want to restore confidence, the bailout must be only a first step. The hard work of establishing and enforcing the regulations that are needed for a truly trustworthy financial system, still lies ahead.
A version of this article appeared in print on September 20, 2008, on page A18 of the New York edition.
Puede leer esta noticia en la version digital en: http://www.nytimes.com/2008/09/20/opinion/20sat1.html?scp=1&sq=Hard%20Truths%20About%20the%20Bailout&st=cse
