Stiglitz: Gov’t Should Bail Out Homeowners, Not Banks

Economist Joseph E. Stiglitz argues bailing out the banks is only another short-term fix and will fail unless people are living in houses and paying mortgages. He suggests the government should instead help people maintain homeownership. “We should be helping at the bottom end, not at the top,” he says.

(I am in favor of this, if we only engage in triage, and not “rescue” home-owers who cannot actually afford the house they are in. We should try to engage in work outs for those people who can credibly stay in their homes).

The New School, New York, NY, Nov 14th, 2008

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