We know that the people who run Citigroup, J.P. Morgan, Wells, and other major financial institutions may not be the sharpest knives in the drawer, but how much do taxpayers have to cough up to make up for their ineptitude? David Leonhardt's discussion of housing bailout plans never seems to consider the possibility that we would just let large numbers of foreclosures occur and let the banks eat their losses.
Yes, many, if not most, of the banks will go under. So what? Why should taxpayers support convoluted schemes to protect these bank executives and their shareholders from their own ineptitude. We can protect homeowners by simply giving them the right to stay in their home as renters following foreclosure. It's a simple, costless and bureaucracy-free solution, but it screws the banks. So, the folks in Washington and the media apparently are not interested.
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