H.J. Huneycutt

ROI, Paulson's Plan, and the Rise of Neo-Mercantilism

CM in MA, I agree with you on the parties. You can't expect much in the way of prudent policy from either of them. There are only a handful of individuals in Congress that I actually respect.


Anonymous User, how would taxpayers profit on Paulson's original plan? The original plan was to "purchase" the assets without receiving anything in return (other than the junk assets). It is the equivalent to a government price subsidy.

You might possibly be confusing Paulson's plan with the Democratic alternative that has been floating around. In that alternative, the government would purchase the bad assets in exchange for an equity interest in the companies. Hence, it's possible the government could profit. It still doesn't resolve the underlying problem, however, and creates a murky situation where the government will come to the rescue any time reckless actions are taken by the private sector. Moreover, if "successful", it would most likely simply re-inflate the bubble before another more dramatic falldown.

I wouldn't deny that Warren Buffett does have greater knowledge than me on the market and the economy. However, I own a few billion dollars less than him in stocks of financial institutions (many of which he bought back in the early part of the year somewhere near the middle of the plunge).