The US Government is to spend up to $250 billion buying direct stakes in banks and other financial institutions under a controversial emergency plan which President Bush insisted today was “not intended to take over the free market but to preserve it”.
It’s A Brave New World
Professor Jeffrey Cooper made an interesting comment on Minyanville today.
Treasury Secretary Hank Paulson Jr. told nine leading bankers they would have to accept government investment for the good of the U.S. financial system.
It’s a brave new world.
I’m also waiting for word as to when the implanting of chips in newborns is done ‘for the good of the country’.
What hath they wrought?
One Does Not Take Over Free Markets To Save Them
President Bush just proven without a doubt he does not understand free markets. Of course he has long since proven he does not understand anything else either.
One does not take over free markets to save them. It was and still is government intervention in the first place that is destroying the free markets. The root cause of the mess we are in is fractional reserve lending, an unsound currency, and interest rate micro-mismanagement by the Fed.
In a free market, there would not be a Fed, nor would there be fractional reserve lending, nor would there be unsound currencies. And instead of attacking the root cause of the mess, Bush, Paulson, Bernanke, and others are responding with measures that lead one further down the path of fascism, supposedly to “preserve the system”.
Also sad is the fact that highly respected economic professors like Krugman and Roubini openly cheer such nonsense. There is very little if anything in these bailout measures that is worth cheering over. Indeed, there may not be anything left worth preserving if we continue down this foolish path we are on for too much longer.
The actions taken by Central Bankers to “preserve the system” are tantamount to cutting off one’s head so that it won’t get any more blemishes.
Mike “Mish” Shedlock
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