[Pen-l] The end of American capitalism?

[Marvin Gandall <marvgandall@xxxxxxxxxxxx>]

Louis posted:

> http://www.washingtonpost.com/wp-dyn/content/article/2008/10/09/AR2008100903425.html
>
> The End Of American Capitalism?
>
> By Anthony Faiola
> Washington Post Staff Writer
> Friday, October 10, 2008; A01
[...]

> The Bush administration is considering a partial nationalization of some
> banks, buying up a portion of their shares to shore them up and restore
> confidence as part of the $700 billion government bailout. The notion of
> government ownership in the financial sector, even as a minority
> stakeholder, goes against what market purists say they see as the
> foundation of the American system.
=========================================
The "market purist" Wall Street Journal understands full well the purpose of
such "nationalizations":

"Some in the media -- especially the Brits -- can't resist calling these
capital injections a "partial nationalization." Perhaps this is nostalgia
for the heyday of Fabian socialism. But while the size of this intervention
is unusual, the U.S. has acted to rescue the banking system at other times
since the Great Depression. Think of the savings and loan debacle in the
late 1980s, as well as the collapse of the oil patch and the failure of
Continental Illinois earlier that decade. The government that helped to
create the mess has to play a role in cleaning it up.

"These interventions are, or at least should be, temporary efforts to
stabilize and rebuild the banking system and thus avoid a more costly
financial crash. There is always a danger that politicians will want to
start allocating credit for their own purposes (see Fannie Mae and Freddie
Mac), so it is imperative that governments return any bank shares they
accumulate back to private hands once the crisis passes..."

("Progress amid the ruins", WSJ editorial, October 9, 2008)



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