Academics Laud Bank Plan

Econ professors say capital infusion best option
By Ambreen Ali,  Newser User
Posted Oct 14, 2008 4:26 PM CDT
The capital infusion announced today will stop the current crisis, academics say.   (AP Photo)
camera-icon View 2 more images

(Newser) – The Treasury gets gold stars for finally recapitalizing collapsing banks, with the Wall Street Journal reporting on reactions from economics professors:

  • Barry Eichengreen, UC Berkeley: "I would give it an A- for quality but lower the final grade to a C for lateness."
  • Kenneth Rogoff, Harvard: "Thank goodness they didn’t dally for another week."

  • Anil Kashyap, University of Chicago: "I would prefer giving the option to raise it privately first."
  • Brad DeLong, UC Berkeley: "Yes, it is the right move—but nonvoting preferred stock scares me as giving too great incentives to gamble for resurrection."
  • John Cochrane, University of Chicago: "There are all sorts of warts on it, but at least this one will probably work."