Originally Posted by Brian Austin Whitney

By the way, now that the bailout has passed.. let's see the market is down.. oh yeah.. 500 points, give or take, already today on top of the losses at the end of the last week. And folks are saying more companies now have their hands out for bailouts. What a surprise. So we may just find we spent 700 billion EXTRA dollars chasing bad money down the drain. Yee ha! And both our candidates were all for it.
Brian


Luigi Zingales, professor of finance at the University of Chicago was a guest this morning on CSPAN. He will be testifying later today in a hearing on the collapse of Lehman Brothers and AIG. He wrote the book, " Saving Capitalism from the capitalist". It is his contention that the $700 bailout won't work. He suggest a way to solve this problem (banks refusal to loan to each other) by simply creating a modified "chapter 11" for the failing banks administered by the government. It would overnight free up lending (something that would take 5 years if we let the ordinary courts do it). It would appropriately punish the abuses, free up lending (the real crisis) and not involve a bailout at all.
The sad part of this whole mess is that for the amount of money we are throwing at this problem, we could have launched some grand plans in health care or green energy or infrastructure improvement, all of which would have made the economy explode with activity and optimism.

Here is a link to a Luigi Zingales argument against the bailout.
http://www.debatepolitics.com/economics/36565-why-paulson-wrong-luigi-zingales.html
Read this because it will explain a hell of a lot. The "many" (us)are stuck with toxic debt because the "few" (the rich) are more organized- that is Zingales explanation.