This is a Cato Special Podcast. I'm Keelah Brown. The bailout plan moving through

Congress is an attempt to stave off a massive financial collapse in the US

and possibly around the world. But if the goal is to assign a credible price to lousy mortgage-backed assets

is a federal intervention that would price so many bidders out of the market

really the best way to go.

Arnold Kling, an adjunct scholar at the Cato Institute and a former economist for both Freddie Mac

and the Board of Governors at the Federal Reserve, offers his comments.

Last Thursday, Ben Bernanke and Hank Paulson,

the Fed Chairman and Treasury Secretary,

essentially opened up a closet, looked inside and saw a dead body.

They came to Congress the next week and said, we saw a dead body in a closet and we need

you to help us essentially dispose of it very very quickly.

Well I don't have time we don't have time to discuss this that much.

Your deliberation must be very swift, but you have to do this right away.

Generally speaking when a Fed chair swift, but you have to do this right away.

Generally speaking, when a Fed chairman does that,

he has the power to act unilaterally.

That is, he can adjust rates, interest rates, however he cares to.

But the difference here is he's going to Congress and saying you must now do this or that.

It's difficult generally to challenge the thinking in the very short run of a Fed

chairman but in this case it's Congress's job.

Yeah and it probably should have been already it's sort of I think in some sense I think Paulson and Bernanke would have been

...