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1 Page 1 of 6 (ThisletterwassenttoCongressonWedSept242008regardingtheTreasuryplanasoutlinedonthatdate.It doesnotreflectallsignatoriesviewsonsubesquentplansormodificationsofthebill) TotheSpeakeroftheHouseofRepresentativesandthePresidentprotemporeoftheSenate: Aseconomists,wewanttoexpresstoCongressourgreatconcernfortheplanproposedbyTreasurySecretary Paulsontodealwiththefinancialcrisis.Wearewellawareofthedifficultyofthecurrentfinancialsituationandwe agreewiththeneedforboldactiontoensurethatthefinancialsystemcontinuestofunction.weseethreefatal pitfallsinthecurrentlyproposedplan: 1)Itsfairness.Theplanisasubsidytoinvestorsattaxpayers expense.investorswhotookriskstoearnprofits mustalsobearthelosses.noteverybusinessfailurecarriessystemicrisk.thegovernmentcanensureawellfunctioningfinancialindustry,abletomakenewloanstocreditworthyborrowers,withoutbailingoutparticular investorsandinstitutionswhosechoicesprovedunwise. 2)Itsambiguity.Neitherthemissionofthenewagencynoritsoversightareclear.Iftaxpayersaretobuyilliquid andopaqueassetsfromtroubledsellers,theterms,occasions,andmethodsofsuchpurchasesmustbecrystal clearaheadoftimeandcarefullymonitoredafterwards. 3)Itslong termeffects.iftheplanisenacted,itseffectswillbewithusforageneration.foralltheirrecent troubles,america'sdynamicandinnovativeprivatecapitalmarketshavebroughtthenationunparalleled prosperity.fundamentallyweakeningthosemarketsinordertocalmshort rundisruptionsisdesperatelyshortsighted. ForthesereasonsweaskCongressnottorush,toholdappropriatehearings,andtocarefullyconsidertheright courseofaction,andtowiselydeterminethefutureofthefinancialindustryandtheu.s.economyforyearsto come. Signed(updatedat9/27/20086:00PMCT) AcemogluDaron(MassachussetsInstituteofTechnology) AckerbergDaniel(UCLA) AdlerMichael(ColumbiaUniversity) AdmatiAnatR.(StanfordUniversity) AlesLaurence(CarnegieMellonUniversity) AlexisMarcus(NorthwesternUniversity) AlvarezFernando(UniversityofChicago) AndersenTorben(NorthwesternUniversity) BaligaSandeep(NorthwesternUniversity) BanerjeeAbhijitV.(MassachussetsInstituteofTechnology) BarankayIwan(UniversityofPennsylvania) BarryBrian(UniversityofChicago) BartkusJamesR.(XavierUniversityofLouisiana) BeckerCharlesM.(DukeUniversity) BeckerRobertA.(IndianaUniversity) BeimDavid(ColumbiaUniversity) BerkJonathan(StanfordUniversity) BisinAlberto(NewYorkUniversity)

2 Page 2 of 6 BisinAlberto(NewYorkUniversity) BittlingmayerGeorge(UniversityofKansas) BlankEmily(HowardUniversity) BoldrinMichele(WashingtonUniversity) Bollinger,ChristopherR.(UniversityofKentucky) Bossi,Luca(UniversityofMiami) BrooksTaggertJ.(UniversityofWisconsin) BrynjolfssonErik(MassachusettsInstituteofTechnology) BueraFranciscoJ.(UCLA) CabralLuis(NewYorkUniversity) CampMaryElizabeth(IndianaUniversity) CarmelJonathan(UniversityofMichigan) CarrollChristopher(JohnsHopkinsUniversity) CassarGavin(UniversityofPennsylvania) ChaneyThomas(UniversityofChicago) ChariVaradarajanV.(UniversityofMinnesota) ChauvinKeithW.(UniversityofKansas) ChintaguntaPradeepK.(UniversityofChicago) ChristianoLawrenceJ.(NorthwesternUniversity) Clementi,GianLuca(NewYorkUniversity) CochraneJohn(UniversityofChicago) ColemanJohn(DukeUniversity) ConstantinidesGeorgeM.(UniversityofChicago) Cooley,Thomas(NewYorkUniversity) CrainRobert(UCBerkeley) CulpChristopher(UniversityofChicago) DaZhi(UniversityofNotreDame) Darity,William(DukeUniversity) DavisMorris(UniversityofWisconsin) DeMarzoPeter(StanfordUniversity) DubéJean PierreH.(UniversityofChicago) EdlinAaron(UCBerkeley) EichenbaumMartin(NorthwesternUniversity) ElyJeffrey(NorthwesternUniversity) EraslanHülyaK.K.(JohnsHopkinsUniversity) FairRay(YaleUniversity) FaulhaberGerald(UniversityofPennsylvania) FeldmannSven(UniversityofMelbourne) Fernandez,Raquel(NewYorkUniversity) Fernandez VillaverdeJesus(UniversityofPennsylvania) FohlinCaroline(JohnsHopkinsUniversity) FoxJeremyT.(UniversityofChicago) FrankMurrayZ.(UniversityofMinnesota) FrenzenJonathan(UniversityofChicago) FuchsWilliam(UniversityofChicago) FudenbergDrew(HarvardUniversity) GabaixXavier(NewYorkUniversity) GaoPaul(NotreDameUniversity) GaricanoLuis(UniversityofChicago) GerakosJosephJ.(UniversityofChicago) GibbsMichael(UniversityofChicago)

3 Page 3 of 6 GibbsMichael(UniversityofChicago) GlommGerhard(IndianaUniversity) GoettlerRon(UniversityofChicago) GoldinClaudia(HarvardUniversity) GordonRobertJ.(NorthwesternUniversity) GreenstoneMichael(MassachusettsInstituteofTechnology) Gregory,KarlD.(OaklandUniversity) GuadalupeMaria(ColumbiaUniversity) GuerrieriVeronica(UniversityofChicago) HagertyKathleen(NorthwesternUniversity) HamadaRobertS.(UniversityofChicago) HansenLars(UniversityofChicago) HarrisMilton(UniversityofChicago) HartOliver(HarvardUniversity) HazlettThomasW.(GeorgeMasonUniversity) HeatonJohn(UniversityofChicago) HeckmanJames(UniversityofChicago NobelLaureate) HendersonDavidR.(HooverInstitution) Henisz,Witold(UniversityofPennsylvania) HertzbergAndrew(ColumbiaUniversity) HiteGailen(ColumbiaUniversity) HitschGünterJ.(UniversityofChicago) HodrickRobertJ.(ColumbiaUniversity) HollifieldBurton(CarnegieMellonUniversity) HopenhaynHugo(UCLA) HurstErik(UniversityofChicago) ImrohorogluAyse(UniversityofSouthernCalifornia) IsaksonHans(UniversityofNorthernIowa) IsraelRonen(LondonBusinessSchool) JaffeeDwightM.(UCBerkeley) JagannathanRavi(NorthwesternUniversity) JenterDirk(StanfordUniversity) JonesCharlesM.(ColumbiaBusinessSchool) JovanovicBoyan(NewYorkUniversity) KaboskiJosephP.(OhioStateUniversity) KahnMatthew(UCLA) KaplanEthan(StockholmUniversity) KaraivanovAlexander(SimonFraserUniversity) Karolyi,Andrew(OhioStateUniversity) KashyapAnil(UniversityofChicago) KeimDonaldB(UniversityofPennsylvania) KetkarSuhasL(VanderbiltUniversity) KieslingLynne(NorthwesternUniversity) KlenowPete(StanfordUniversity) KochPaul(UniversityofKansas) KocherlakotaNarayana(UniversityofMinnesota) KoijenRalphS.J.(UniversityofChicago) KondoJiro(NorthwesternUniversity) KortewegArthur(StanfordUniversity) KortumSamuel(UniversityofChicago) KruegerDirk(UniversityofPennsylvania)

4 Page 4 of 6 KruegerDirk(UniversityofPennsylvania) LedesmaPatricia(NorthwesternUniversity) LeeLung fei(ohiostateuniversity) LeeperEricM.(IndianaUniversity) LetsonDavid(UniversityofMiami) LeuzChristian(UniversityofChicago) LevineDavidI.(UCBerkeley) LevineDavidK.(WashingtonUniversity) LevyDavidM.(GeorgeMasonUniversity) LinnainmaaJuhani(UniversityofChicago) LucasRobert(UniversityofChicago NobelLaureate) Ludvigson,SydneyC.(NewYorkUniversity) LuttmerErzoG.J.(UniversityofMinnesota) ManskiCharlesF.(NorthwesternUniversity) MartinIan(StanfordUniversity) MayerChristopher(ColumbiaUniversity) MazzeoMichael(NorthwesternUniversity) McDonaldRobert(NorthwesternUniversity) MeadowScottF.(UniversityofChicago) Meeropol,Michael(WesternNewEnglandCollege) MehraRajnish(UCSantaBarbara) MianAtif(UniversityofChicago) MiddlebrookArt(UniversityofChicago) MiguelEdward(UCBerkeley) MiraveteEugenioJ.(UniversityofTexasatAustin) MironJeffrey(HarvardUniversity) Moeller,Thomas(TexasChristianUniversity) MorettiEnrico(UCBerkeley) MoriguchiChiaki(NorthwesternUniversity) MoroAndrea(VanderbiltUniversity) MorseAdair(UniversityofChicago) MortensenDaleT.(NorthwesternUniversity) MortimerJulieHolland(HarvardUniversity) Moskowitz,TobiasJ.(UniversityofChicago) MungerMichaelC.(DukeUniversity) MuralidharanKarthik(UCSanDiego) NairHarikesh(StanfordUniversity) NandaDhananjay(UniversityofMiami) NevoAviv(NorthwesternUniversity) OhanianLee(UCLA) PagliariJoseph(UniversityofChicago) PapanikolaouDimitris(NorthwesternUniversity) ParkerJonathan(NorthwesternUniversity) PaulEvans(OhioStateUniversity) PearceDavid(NewYorkUniversity) PejovichSvetozar(Steve)(TexasA&MUniversity) PeltzmanSam(UniversityofChicago) PerriFabrizio(UniversityofMinnesota) PhelanChristopher(UniversityofMinnesota) PiazzesiMonika(StanfordUniversity) Pippenger,MichaelK.(UniversityofAlaska)

5 Page 5 of 6 Pippenger,MichaelK.(UniversityofAlaska) PiskorskiTomasz(ColumbiaUniversity) PlattBrennanC.(BrighamYoungUniversity) RampiniAdriano(DukeUniversity) Ray,Debraj(NewYorkUniversity) ReaganPatricia(OhioStateUniversity) ReichMichael(UCBerkeley) ReubenErnesto(NorthwesternUniversity) Rizzo,Mario(NewYorkUniversity) RobertsMichael(UniversityofPennsylvania) RobinsonDavid(DukeUniversity) RogersMichele(NorthwesternUniversity) RotellaElyce(IndianaUniversity) RoussanovNikolai(UniversityofPennsylvania) RoutledgeBryanR.(CarnegieMellonUniversity) RuudPaul(VassarCollege) SaffordSean(UniversityofChicago) SamaniegoRoberto(GeorgeWashingtonUniversity) SandbuMartinE.(UniversityofPennsylvania) SapienzaPaola(NorthwesternUniversity) SavorPavel(UniversityofPennsylvania) SchanielWilliamC.(UniversityofWestGeorgia) ScharfsteinDavid(HarvardUniversity) SeimKatja(UniversityofPennsylvania) SeruAmit(UniversityofChicago) Shang JinWei(ColumbiaUniversity) ShimerRobert(UniversityofChicago) ShoreStephenH.(JohnsHopkinsUniversity) SiegelRon(NorthwesternUniversity) SmithDavidC.(UniversityofVirginia) SmithVernonL.(ChapmanUniversity NobelLaureate) SorensenMorten(ColumbiaUniversity) SpattChester(CarnegieMellonUniversity) SpearStephen(CarnegieMellonUniversity) StevensonBetsey(UniversityofPennsylvania) StokeyNancy(UniversityofChicago) StrahanPhilip(BostonCollege) StrebulaevIlya(StanfordUniversity) SufiAmir(UniversityofChicago) TabarrokAlex(GeorgeMasonUniversity) TaylorAlanM.(UCDavis) ThompsonTim(NorthwesternUniversity) TroskeKenneth(UniversityofKentucky) TschoeglAdrianE.(UniversityofPennsylvania) UhligHarald(UniversityofChicago) Ulrich,Maxim(ColumbiaUniversity) VanBuskirkAndrew(UniversityofChicago) VargasHernan(UniversityofPhoenix) VeronesiPietro(UniversityofChicago) Vissing JorgensenAnnette(NorthwesternUniversity) WacziargRomain(UCLA)

6 WacziargRomain(UCLA) WalkerDouglasO.(RegentUniversity) Walker,Todd(IndianaUniversity) WeillPierre Olivier(UCLA) WilliamsonSamuelH.(MiamiUniversity) WitteMark(NorthwesternUniversity) Wolfenzon,Daniel(ColumbiaUniversity) WolfersJustin(UniversityofPennsylvania) WoutersenTiemen(JohnsHopkinsUniversity) WuYangru(RutgersUniversity) YueVivianZ.(NewYorkUniversity) ZingalesLuigi(UniversityofChicago) ZitzewitzEric(DartmouthCollege) 11/10/08 10:09 AM Page 6 of 6

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