BigHornRam
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Educated idiot is what I think.......
Economist: Cut value of homes
By JAMIE KELLY of the Missoulian
Bailout? Bail out whom?
Prosecute? Prosecute whom?
Political talk is cheap and a $700 billion bailout is expensive, but the financial crisis that looms over the United States and the world would be easily undermined with a single course of action: lower the price of homes.
That's the opinion of Lester Thurow, a world-renowned economist in Missoula to help celebrate the opening of the UM business school's Gilkey Center for Leadership, Entrepreneurship and Executive Education and to speak to students about the nation's ongoing financial meltdown.
The Montana-born-and-raised Thurow, a professor at the Massachusetts Institute of Technology and prolific author on globalism and economics, said much of the hemorrhaging in the economy could be slowed if the government stepped in to lower home prices to “pre-bubble” levels and renegotiate bad loans and loans in default.
“You've got to stop people from walking away from their mortgages,” said Thurow. “Whatever you do, you have to do that, or else.”
Or else what?
Or else the United States and the rest of the world are in for prolonged pain, said Thurow, who added that the bailout bill recently passed by Congress is a mistake.
Bailouts only help banks and their CEOs, and don't address the real problem: that people aren't making their mortgage payments and that the default rate has locked up financial and credit markets.
“You can't just operate on confidence,” he said. “You have to get the economy moving.”
To do that, Thurow calls for the government, on a massive scale, to reappraise home values and have banks and individuals renegotiate subprime loans to help stop the crisis from spreading further.
Neither presidential candidate, Barack Obama or John McCain, is addressing that issue, with both voting for the massive bailout, he said.
Yet, unlike the candidates, Thurow won't toss around blame. This current crisis is no different than others that have preceded it, he said.
“I don't blame anyone because it's the nature of the beast,” he said. “Elk come with horns. That's just the way they come. Capitalism comes with financial crises. That's the way it comes.”
Calls for hearings and prosecution of CEOs and others are fruitless, because no laws were broken in the first place, Thurow said.
“Who would you prosecute?” he asked. “People did things at the time that were perfectly legal. Maybe they shouldn't have been done, but they did.”
Thurow said there will be further short-term pain on the stock market, but insisted the United States will avoid another Great Depression, and that “around 2009, 2010, things will begin to level out.”
Thurow was born in Montana and left the Treasure State when he was 18.
He has appeared on CBS' “60 Minutes” and sat on the editorial board of the New York Times.
Reporter Jamie Kelly can be reached at 523-5254 or at [email protected]
Economist: Cut value of homes
By JAMIE KELLY of the Missoulian
Bailout? Bail out whom?
Prosecute? Prosecute whom?
Political talk is cheap and a $700 billion bailout is expensive, but the financial crisis that looms over the United States and the world would be easily undermined with a single course of action: lower the price of homes.
That's the opinion of Lester Thurow, a world-renowned economist in Missoula to help celebrate the opening of the UM business school's Gilkey Center for Leadership, Entrepreneurship and Executive Education and to speak to students about the nation's ongoing financial meltdown.
The Montana-born-and-raised Thurow, a professor at the Massachusetts Institute of Technology and prolific author on globalism and economics, said much of the hemorrhaging in the economy could be slowed if the government stepped in to lower home prices to “pre-bubble” levels and renegotiate bad loans and loans in default.
“You've got to stop people from walking away from their mortgages,” said Thurow. “Whatever you do, you have to do that, or else.”
Or else what?
Or else the United States and the rest of the world are in for prolonged pain, said Thurow, who added that the bailout bill recently passed by Congress is a mistake.
Bailouts only help banks and their CEOs, and don't address the real problem: that people aren't making their mortgage payments and that the default rate has locked up financial and credit markets.
“You can't just operate on confidence,” he said. “You have to get the economy moving.”
To do that, Thurow calls for the government, on a massive scale, to reappraise home values and have banks and individuals renegotiate subprime loans to help stop the crisis from spreading further.
Neither presidential candidate, Barack Obama or John McCain, is addressing that issue, with both voting for the massive bailout, he said.
Yet, unlike the candidates, Thurow won't toss around blame. This current crisis is no different than others that have preceded it, he said.
“I don't blame anyone because it's the nature of the beast,” he said. “Elk come with horns. That's just the way they come. Capitalism comes with financial crises. That's the way it comes.”
Calls for hearings and prosecution of CEOs and others are fruitless, because no laws were broken in the first place, Thurow said.
“Who would you prosecute?” he asked. “People did things at the time that were perfectly legal. Maybe they shouldn't have been done, but they did.”
Thurow said there will be further short-term pain on the stock market, but insisted the United States will avoid another Great Depression, and that “around 2009, 2010, things will begin to level out.”
Thurow was born in Montana and left the Treasure State when he was 18.
He has appeared on CBS' “60 Minutes” and sat on the editorial board of the New York Times.
Reporter Jamie Kelly can be reached at 523-5254 or at [email protected]
