All Posts Tagged With: "bailout"

Recycling Discredited Ideas

The current financial crisis has fueled a frenzied recycling of discredited Keynesian ideas. We are hearing again of the need for “public works,” of the need to “stimulate” the economy. The Federal Reserve is frantically inflating the supply of money. We are laying the groundwork for a disaster reminiscent of the 1970s—if not worse.

1Apr2009 | Peter Lewin | 11 comments | Continued

A Microeconomist’s Protest

The conventional macroeconomic diagnosis and proposed cures ignore many important structural or microeconomic factors.

1Apr2009 | Mario Rizzo | 27 comments | Continued

Too Big to Succeed

One widely cited culprit for the 2008 financial crisis was a supposed decision by the U.S. government not to regulate a relatively new type of financial instrument known as a credit default swap (CDS). In fact, this so-called “failure to regulate” refers to regulations that prohibited public trading of these instruments, concentrated risk in a small number of large firms, and massively increased the probability of a financial disaster. To add to the irony, one of the government officials most responsible for these interventions, then-Federal Reserve Chairman Alan Greenspan, recently apologized for having had too much faith in the free market when he should have apologized for not having had enough.

1Apr2009 | Less Antman | 13 comments | Continued

The Geithner-Bernanke Power Grab

The powers that be apparently think we’ll swallow anything they serve up. For example, they expect us to believe that the taxpayers will be safer if the government has the power to seize insurance and other nonbank companies whose failure might pose a “systemic risk.”A few problems off the top of my head: this plan [...]

25Mar2009 | Sheldon Richman | 0 comments | Continued

George Will Quotes Larry White, The Freeman

Syndicated columnist George Will quotes Larry White’s March Freeman article on the financial bailouts here. Five months after enactment of TARP, a plan for unfreezing the credit system remains, like Atlantis, rumored but unseen. Twelve months after the government brokered the marriage of Bear Stearns and J.P. Morgan Chase, the government is recapitalizing financial institutions [...]

13Mar2009 | Sheldon Richman | 0 comments | Continued

FEE at Western New England College

This morning FEE and the economics department at Western New England College in Springfield, Mass., held our sixth annual symposium.  This year’s program comprised two debates on “The Financial Crisis.” Session I: How Did We Get into This Mess? featured Prof. Steven Horwitz of St. Lawrence University, representing FEE, and Prof. Fred Lee of the [...]

5Mar2009 | Sheldon Richman | 0 comments | Continued

Government Sets Us Up for the Next Bust

If an athlete injures himself and suffers great pain, we recognize the shortsightedness of giving him painkillers to keep him going. The pain might be masked, but at the risk of greater injury later. That’s a good analogy for the inflationary policies now pursued by Washington. These policies may temporarily “stimulate the economy,” but they [...]

2Mar2009 | John Stossel | 32 comments | Continued

Black Swans, Butterflies, and the Economy

One side blames the market. The other blames government. We get two causal stories going in opposite directions and a lot of animus. But both perhaps are missing something important in this titanic debate about our current financial crisis. It’s time we exposed a complicated truth about the economy of the 21st century. Nassim Nicholas [...]

2Mar2009 | Max Borders | 62 comments | Continued

Too Big to Fail

“Once you lose your freedom to fail, you also lose your freedom to succeed and you cease to be a free society.” —U.S. Rep. Jeb Hensarling of Texas In March 2008 the investment banking firm Bear Sterns failed and the federal government quickly stepped in. The public was inundated with the phrase “too big to fail” [...]

2Mar2009 | Michael Heberling | 8 comments | Continued

The Financial Bailouts: “See the Needle and the Damage Done”

On Wednesday, September 17, 2008, according to the New York Times, Fed Chairman Ben Bernanke used “a speaker phone from his ornate office” to tell Treasury Secretary Henry Paulson “that it was time to adopt a comprehensive strategy that Congress would have to approve” for dealing with the financial-market troubles. After a second call on [...]

27Feb2009 | Lawrence H. White | 13 comments | Continued

The Salary Cap

Don Boudreaux points out the frightening precedent set by Obama’s bailout stipulations in this article in the Pittsburgh Tribune:  Government is now increasingly in the business of determining salaries and deciding whether firms can have private jets. These matters — salaries and jets — are lightning rods for public attention. So they are,ipso facto, lightning [...]

11Feb2009 | Margaret Morgan | 0 comments | Continued

And Now for Something Completely Different

Some banks don’t want taxpayer money. From the AP: A small but growing number of community banks are backing out of the government’s bailout, which they see as fraught with hidden strings and government interference.About 20 banks so far that applied for or had been approved to receive about $1 billion combined in taxpayer money [...]

30Jan2009 | Sheldon Richman | 0 comments | Continued

Penthouses for playmates? More like the poorhouse for the populace.

It is when the porn industry asks for a $5 billion dollar bailout that I hope citizens have an interest in just where our tax dollars go.  On the other hand, when I mentioned this bailout to the president of the Mackinac Center for Public Policy, Joe Lehman, his response was something to the effect: “Why wait [...]

26Jan2009 | Margaret Morgan | 0 comments | Continued

Bailing Out Statism

The key to understanding the saga of Fannie Mae and Freddie Mac—the recently nationalized twin government-sponsored enterprises (GSEs) that dominate home financing—is this: They were set up—intentionally—to distort the housing and mortgage markets. Government planners were not content to let voluntary exchange and spontaneous market forces configure those industries unmolested. So—holding the taxpayers hostage—they intervened. [...]

20Jan2009 | Sheldon Richman | 12 comments | Continued

Theory and Crisis

What might be even more distressing than the current buildup of the corporate state in response to the supposed economic crisis is the way some self-styled advocates of the free market are willing to cast aside the economic theory they once claimed to embrace. If you are a glutton for cable news-talk shows, you know [...]

20Jan2009 | Sheldon Richman | 2 comments | Continued

What Happened to Market Discipline?

During the late presidential campaign Barack Obama said, “[Today’s economic problems are] a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.” What? Does that mean that until last fall the Bush administration embraced the free market? Nonsense. Governments at all levels [...]

20Jan2009 | John Stossel | 3 comments | Continued

Where Will It Stop?

From today’s New York Times, regarding the impending auto bailout from the Bush administration: In addition to the emergency loan package, officials are working with the finance arms of G.M. and Chrysler to convert them into government-regulated financial institutions, a designation that could make them eligible for separate loans from the Federal Reserve. The administration [...]

18Dec2008 | Sheldon Richman | 0 comments | Continued
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