From Amity Shlaes, "Bush's Subprime Plan Spells a Raw Deal for 2008" at Bloomberg.com:
"The first step would be to rid the financial system of the existing toxic subprime mortgages, for which there are no reliable market prices, and scaring banks from lending to other banks holding such mortgages. My Council on Foreign Relations colleague Benn Steil has suggested a short-term government program that would offer to buy up such mortgages on a deeply discounted and publicly disclosed price schedule.
"Something like that happened during the savings-and-loan crisis of the early 1990s. President George H.W. Bush and Congress created the Resolution Trust Corp. to sort out the credit mess. Hundreds of thrifts failed. Hundreds of billions in assets were marked down. But at least they had prices. And the process was fast."
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