[Marxism] Fed considers buying short-term debt

["Andrew Pollack" <acpollack2@xxxxxxxxx>]

I recently mentioned on another list the plethora of articles about
how the lenders' strike was
causing a crisis in the short-term debt (commercial paper) market used
by companies for
day-to-day function. The story below is about a Fed plan to step in to
handle that, a
plan that would give it what I believe is an unprecedented role by a
US central bank in
the day-to-day financing of the economy (someone correct me please if
I've forgotten a
historical precedent), and which makes even more compelling arguments
for nationalizing
the banks under workers' control -- e.g. WE, not the Fed, should
decide how the total sum
of funds in the economy should be used up to keep goods and services flowing.
To make concrete that argument, of course, we have to keep close tabs
on how the lenders'
strike is leading to actual or threatened cuts and workers' reactions to those.
http://www.nytimes.com/2008/10/07/business/07markets.html?pagewanted=2&_r=1&hp
The New York Times

October 7, 2008
Fed Considers Plan to Buy Companies' Unsecured Debt
By EDMUND L. ANDREWS and MICHAEL M. GRYNBAUM

WASHINGTON — As pressure built in the credit markets and stocks
spiraled lower around
the world on Monday, the Federal Reserve was considering a radical new
plan to jump-start
the engine of the financial system.

Under a proposal being discussed with the Treasury Department, the Fed
could buy vast
amounts of the unsecured short-term debt that companies rely on to
finance their
day-to-day activities, according to officials familiar with the
discussions. If this were
to happen, the central bank would come closer than ever to lending directly to
businesses.

While the move would put more taxpayer dollars at risk, it underscores
the growing sense
of urgency felt by policy makers in a climate where lending has
virtually dried up.

The plan was being formulated amid cascading losses in global stock
markets... [snip]

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