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March 24, 2008

Dean Baker has a good idea

Dean Baker has a good proposal regarding investment banks that borrow from the discount window at the Federal Reserve:

"Even if this new lending route turns out not to help the economy much, it is certainly a good deal for these financial firms. They can now borrow tens of billions of dollars from the government at just a 2.5 percent interest rate.

Why shouldn't the taxpayers get something in return?

While we could think of all sorts of elaborate concessions we can ask from the Wall Street crew in exchange for these special discount loans, we can keep it simple. Suppose we put a cap on the compensation for their most highly paid executives of just $1 million a year."

--Mark Price

Posted by Price at March 24, 2008 01:47 PM

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