UA opinions differ on bailout
Drew Van Patter
Issue date: 10/8/08 Section: News
The U.S. House of Representatives voted to pass the $700 billion Wall Street bailout late last week, and UA students and experts alike said they aren't sure if the decision was in the country's best interest.
The early rejection of the bailout caused the Dow Jones industrial average to drop 778 points as U.S. stocks reached their lowest point since 1987, according to Bloomberg.com. But the bailout itself could lead to job losses, bank collapses and more inflation.
Craig Rennie, associate professor of finance in the Sam M. Walton College of Business, said in a UA press release that the bailout bill was "too broad and all-encompassing. It left something to be desired, notwithstanding short-term negative market reaction."
The flimsy subprime mortgage industry is at the heart of the financial crisis, which is the worst since the Great Depression, said Timothy Yeager in the Northwest Arkansas Times on Oct. 6. Yeager also is an associate professor of finance in the Walton College of Business.
Yeager also said the $700 billion could be used to buy all the bad mortgages and remove them from sight so U.S. markets can function more normally. Yeager cited a similar situation that happened to Japan in the early 1990s, which led to a 15-year recession.
Subprime loans are primarily given to those who wish to buy homes.
The main problem with subprime loans is that anyone can get them, said Trey Holt, a senior biological engineering major.
"The vote shouldn't have been passed," he said. "People need to be held accountable for the loans they take out, not the government."
Some students said they think the government bailout will spell disaster for the future of the country.
"The bailout is a mistake. It's setting a precedent for bad behavior," said Casey Clare, a senior international relations major.
Clare insinuated that the passing of the bailout will not prevent it from happening again in coming years.
The early rejection of the bailout caused the Dow Jones industrial average to drop 778 points as U.S. stocks reached their lowest point since 1987, according to Bloomberg.com. But the bailout itself could lead to job losses, bank collapses and more inflation.
Craig Rennie, associate professor of finance in the Sam M. Walton College of Business, said in a UA press release that the bailout bill was "too broad and all-encompassing. It left something to be desired, notwithstanding short-term negative market reaction."
The flimsy subprime mortgage industry is at the heart of the financial crisis, which is the worst since the Great Depression, said Timothy Yeager in the Northwest Arkansas Times on Oct. 6. Yeager also is an associate professor of finance in the Walton College of Business.
Yeager also said the $700 billion could be used to buy all the bad mortgages and remove them from sight so U.S. markets can function more normally. Yeager cited a similar situation that happened to Japan in the early 1990s, which led to a 15-year recession.
Subprime loans are primarily given to those who wish to buy homes.
The main problem with subprime loans is that anyone can get them, said Trey Holt, a senior biological engineering major.
"The vote shouldn't have been passed," he said. "People need to be held accountable for the loans they take out, not the government."
Some students said they think the government bailout will spell disaster for the future of the country.
"The bailout is a mistake. It's setting a precedent for bad behavior," said Casey Clare, a senior international relations major.
Clare insinuated that the passing of the bailout will not prevent it from happening again in coming years.
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Loonatikjenn
posted 10/24/08 @ 10:30 AM CST
Rosy scenarios promised by government bureacrats
and Spanish and Latin American studies Majors,
never come to pass.
There is an old saying regarding the economy,
that I havent heard in awhile. (Continued…)
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