Monday, March 23, 2009

The Treasury's Version of the Flying Spaghetti Monster

Ezra Klein argues that the Obama administration's mortgage rescue plan involves guessing at the price of toxic assets and then laundering the guess through corporate investors demanding a huge payoff to participate. The Treasury is assuming that risk aversion will naturally lead to fair pricing. It sounds like another version of blind and misdirected faith in the market to me.

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