Feds Respond To Financial Crisis With Massive Intervention
Professor Joseph A. Grundfest is quoted in a San Jose Mercury News story about how the massive bailout of Wall Street Investment banks reflects on the Bush administration. He also assesses the implications for the taxpayer:
Joseph Grundfest, professor of law and business at Stanford University, marveled at the Bush administration's philosophical turnaround: "Just as there are no atheists in foxholes, apparently there's no economic dogma in a crisis,'' he said.
"If, on the one hand, the prices are set on the high side, it certainly helps the holders of these instruments, but it increases the probability that taxpayers will one day suffer a loss," said Stanford's Grundfest. "If the prices are set lower, the taxpayers may actually make a profit, but it doesn't provide much help to the holders of the instruments.''