05/02/2009 05:12 am ET Updated May 25, 2011

Joseph E. Stiglitz: Obama's Bank Bailout Plan Is Win-Win-Lose Proposal

THE Obama administration's $500 billion or more proposal to deal with America's ailing banks has been described by some in the financial markets as a win-win-win proposal. Actually, it is a win-win-lose proposal: the banks win, investors win -- and taxpayers lose.
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Treasury hopes to get us out of the mess by replicating the flawed system that the private sector used to bring the world crashing down, with a proposal marked by overleveraging in the public sector, excessive complexity, poor incentives and a lack of transparency.