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Published on Sunday, Sep 14, 2008
New York Times
Despite decades of free-market rhetoric from Republican and Democratic lawmakers, Washington has a long history of providing financial help to the private sector when the economic or political risk of a corporate collapse appeared too high.
The effort to save Fannie Mae and Freddie Mac is the latest in a series of bailouts that stretch back to the rescue of the military contractor Lockheed Aircraft Corp. and the Penn Central Railroad under President Nixon and the rescue of Chrysler in the waning days of the Carter administration, through the more recent salvage of the savings-and-loan system in the late 1980s.
Now, with the federal government preparing to save Fannie and Freddie only six months after the Federal Reserve orchestrated the rescue of Bear Stearns, it appears that the mortgage crisis has forced the government to once again shove ideology aside and get back into the bailout business.
''If anybody thought we had a pure free-market financial system, they should think again,'' said Robert F. Bruner, dean of the Darden School of Business at the University of Virginia. ''The government and private financial institutions are cheek by jowl in their engagement with the flows of money in the economy, so regulators have a keen interest in the survival of financial institutions.''
He added these types of rescues came when the economy was weakening or was already in a recession, as in the 1970s.
New York Times
Get the full article here.
Comments
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Posted 06:56 AM, 09/14/2008
The biggest bailout in the Nixon era was his impeachment! We have the Bush/Cheney duo who are nixon students,Dennis Kucinich present the impeachment articles please!Another bailout has been presented. impeachforpeace.org Dennis M Mccullough,Wash Pa
