Wikinvest Wire

The bailout backlash grows

Friday, September 19, 2008

Yes, he's a little nutty sometimes, but Senator Jim Bunning (R-Kentucky) often makes a good deal of sense when he talks about the Federal Reserve being a less-than-ideal solution to current problems, given their role in creating them.

IMAGEClick to play in a new window

Apparently, he introduced legislation yesterday to prohibit the Fed from bailing out companies they do not regulate - that seems to make a good deal of sense.

Some highlights from the interview:
How much more chaos have the Fed Chairman and the Secretary of the Treasury brought to the market by what they have done? Who do they pick and choose? What's next? Chrysler, Ford, General Motors? They are all here with their hands out. United Airlines, Delta Airlines, US Airlines - they'll all be here with their hand out. This is not a free market we're in. This is France of 20 years ago.
My God, the Federal Reserve is at the very core of the problem we're having because the 1994 bill that we passed gave them the responsibility on all mortgages, not just bank mortgages.
Elsewhere at Bloomberg, there's this:
Backlash Against Bailouts Grows on Capitol Hill, Wall Street
Amid calls for the government to take stronger measures to stabilize financial markets, some former Federal Reserve officials, lawmakers and Wall Street executives are saying too much has already been done.
"If we don't stop now, there will be no end,'' said Gerald O'Driscoll, a former vice president of the Dallas Fed and now a scholar at the Cato Institute in Washington. He joins Vince Reinhart, former director of the Fed's monetary affairs division, and Marvin Goodfriend, a former official at the Richmond Fed in questioning the market interventions.

They're getting support from Republican lawmakers, who are stepping up their efforts to put a halt to further rescues. Yesterday a group of 100 lawmakers released a letter asking Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson to "refrain from conducting any additional government-financed bailouts for large financial firms.''
Another day, another crisis. But, hey, stocks are up today.

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staghounds said...

I didn't buy FNMA or AIG myself, because I thought they were risky, and might not be a good value.

But now that we all know for sure they are absolutely worthless, Congress bought them for me!

I wonder if they want my old betting slips on Ruffian, too.

kingdom media said...

from a historical point of view, it's hard to object to the government's mass bailouts since similar debt-producing methods were used to bring the U.S. out of the Depression... our economy has been supported and driven by debt ever since

VoiceFromTheWilderness said...

They'll let all these 'sane' voices for stopping 'win' just as soon as they've bailed out everyone they really care about. The public will then chear the end to taxpayer liability increases, and no one will realize they've just been duped.

These guys are good. Really good.

dearieme said...

"since similar debt-producing methods were used to bring the U.S. out of the Depression": many economists seem to think that the methods failed to do so, and that credit should go to WWII.

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