Most watched in shock while J.P.Morgan bought Bear-Stearns for $2 a share, aided by our Federal Reserve Bank. The purchase price was not even enough
to pay for the real estate B-S owned on the Street.
Here's Washington Post Op-Ed on the current crisis-
Excerpts
By E. J. Dionne Jr.
Tuesday, March 18, 2008; Page A19
Never do I want to hear again from my conservative friends about how brilliant capitalists are, how much they deserve their seven-figure salaries and how government should keep its hands off the private economy.
The Wall Street titans have turned into a bunch of welfare clients. They are desperate to be bailed out by government from their own incompetence, and from the deregulatory regime for which they lobbied so hard. They have lost "confidence" in each other, you see, because none of these oh-so-wise captains of the universe have any idea what kinds of devalued securities sit in one another's portfolios.
Enter the federal government, the institution to which the wealthy are not supposed to pay capital gains or inheritance taxes.
In a deal that the New York Times described as "shocking," J.P. Morgan Chase agreed over the weekend to pay $2 a share to buy all of Bear Stearns, one of the brand names of finance capitalism. The Federal Reserve approved a $30 billion -- that's with a "b" -- line of credit to make the deal work.
But if this near meltdown of capitalism doesn't encourage a lot of people to question the principles they have carried in their heads for the past three decades or so, nothing will.
We had already learned the hard way -- in the crash of 1929 and the Depression that followed -- that capitalism is quite capable of running off the rails. Franklin Roosevelt's New Deal was a response to the failure of the geniuses of finance (and their defenders in the economics profession) to realize what was happening or to fix it in time.
As the economist John Kenneth Galbraith noted of the era leading up to the Depression, "The threat to men of great dignity, privilege and pretense is not from the radicals they revile; it is from accepting their own myth. Exposure to reality remains the nemesis of the great -- a little understood thing."
...we forgot the lesson that government needs to keep a careful watch on what capitalists do. Of course, some deregulation can be salutary, and the market system is, on balance, a wondrous instrument -- when it works. But the free market is just that: an instrument, not a principle.
LaWood needs to make an effort to learn how to post short links
Free Market is Not a Principle-J.P.Morgan as Welfare Client
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LaWood
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Barbara Fitzpatrick
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- Joined: Thu Mar 02, 2006 10:55 am
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Blanche Lincoln is working on the reconciliation Farm Bill. Congressional switchboard - tollfree - 800-828-0498. You might also mention that subsidizing high-petroleum, high-water input crops to the extent that they can be exported for less than 3rd world farmers can grow them (bankrupting said farmers so they sneak over the border looking for jobs), is a bad idea.
Barbara Fitzpatrick
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LaWood
