Page A15: The Confidence Game -
Objections to Secretary of Treasury Paulson's proposal abound. It would rescue some financial institutiions from bad decisions and erode the normal discipline of potential losses. Some investors doubtlessly bought subprime securities at huge discounts and would reap massive profits by reselling to the government. That might trigger a public backlash. The program would be huge ($700 billion) and could burden future taxpayers.
My comment: That remains to be seen and we must have Faith,Hope and Charity for the best but be prepared for the worst as lifelong taxpayers in the years to come.
Five keys to recovery:
1. Put individual taxpayers first.
2. Minimize taxpayer costs over the long term.
3. Avoid creating an interim program.
4. Remember global investor, whose confidence we must regain.
5. Do not hesitate.
The above points are written by Robert H. Dugger, managing director of a global asset management firm and chairman of the Partnership for America's Economic Success. As policy director of the American Bankers Association in 1988, he led a panel of bankers in developing the plan that became the Resolution Trust Corporation.
My comment: It is the mix or combo of public sector and the private sector to play the role in the economy of USA and in China as I have observed.
China's decision last week to lower interest rates and bank reserve requirements is also likely to help Japan. China has replaced the United States as Japan's biggest trading partner. Such change serves as important reference for USA since America expects to trade with Japan and China to honor the Law of Comparative Advantage. US recession would punish Japan's exports. Trade for thoughts,indeed!
Francis Shieh a.k.a. Xie Shihao on Monday, September 22, 2008 at 10.12 a.m.
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