Yale professor and co-founder of the Case/Shiller housing index Robert Shiller admires Treasury Secretary Henry Paulson.
"He's decisive and not afraid to do unusual things," Shiller told The Wall Street Journal. "He's thrown out a plan that none of us understand."
What bothers Shiller is that if Paulson's plan goes through, U.S. taxpayers will have effectively given the Treasury secretary a blank check he will then use to pay too much for whatever Treasury buys.
"Nobody else can value these securities, how is Treasury going to value them?" Shiller asks.
"They'll do it in some crazy and arbitrary way. I don't like the sound of this at all."
On the other hand, Shiller says that Paulson's plan beats doing nothing. Although nobody knows how bad the situation really is, urgency appears paramount.
"We seem to see a crumbling of our financial system, and nobody knows how bad the effects will be." Shiller says.
"I think we've really gotten the attention of the American people and the world, and in a bad way."
Shiller blames those who believed that housing prices would continue to rise ad infinitum for the housing bubble. He says that his index shows the housing market is about halfway down from where it was when the bubble began in the late 1990s.
Shiller says a three-pronged approach is necessary to improve financial markets: boosting the information infrastructure, broadening and strengthening our markets, and improving retail institutions.
"We all have to work together. Basically, we want to improve and democratize our markets for the people," Shiller says.
"We don't want to go back, we want to go forward into something that's even better."
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