Archive for the ‘FDIC’ Category

Capitalism, fiscal woes; contempt for economic liberty

November 9, 2008

There has always been contempt for economic liberty. Historically, our nation was an important, not complete, exception. It took the calamity of the Great Depression to bring about today’s level of restrictions on economic liberty. Now we have another government-created calamity that has the prospect of moving us even further away from economic liberty with the news media and pundits creating the perception that the current crisis can be blamed on capitalism.

We see comments such as those in the New York Times: “The United States  has a culture that celebrates laissez-faire capitalism as the economic ideal.” Or, “For 30 years, the nation’s political system has been tilted in favor of business deregulation and against new rules.” Another says, “Since 1997, Mr. Brown [the British prime minister] has been a powerful voice behind the Labor Party’s embrace of an American-style economic philosophy that was light on regulation.”

By Walter E. Williams
The Washington Times

First, let’s establish what laissez-faire capitalism is. Broadly defined, it is an economic system based on private ownership and control over of the means of production. Under laissez-faire capitalism, government activity is restricted to the protection of the individual’s rights against fraud, theft and the initiation of physical force.

Professor George Reisman has written a very insightful article on his blog titled “The Myth that Laissez Faire Is Responsible for Our Financial Crisis.” (http://georgereisman.com/blog/2008/10/myth-that-laissez-faire-is-respo nsible.html) You can decide whether we have an unregulated laissez-faire economy. There are 15 Cabinet departments, nine of which control various aspects of the U.S. economy. They are the Departments of: Transportation, Housing and Urban Development, Health and Human Services, Education, Energy, Labor, Agriculture, Commerce and Interior. In addition, there is the alphabet soup cluster of federal agencies such as: the IRS, the FRB and FDIC, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH and NASA.

Here’s my question to you: Can one be sane and at the same time hold that ours is an unregulated laissez-faire economy? Better yet, tell me what a businessman, or for that matter you, can do that does not involve some kind of government regulation.

Read the rest:
http://www.washingtontimes.com/news/2008/nov
/09/capitalism-and-fiscal-woes/

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U.S. Is Investing $250 Billion in Banks: Bush Addresses Financial Crisis

October 14, 2008
WASHINGTON — President Bush, speaking from the Rose Garden Tuesday before the markets opened in New York, called the government plan to invest up to $250 billion in banks essential to help assure stability in the nation’s financial system.

Under the proposal that is similar to those initiated by European governments on Monday, President Bush said the Treasury Department would invest up to $250 billion in banks, receiving an equity stake in return.

“This is an essential short-term measure to ensure the viability of the American banking system,” Mr. Bush said.

The United States would also guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers, officials said.

The Federal Deposit Insurance Corporation would also offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees.

In addition, Mr. Bush said the Federal Reserve would start a program to become the buyer of last resort for commercial paper, a move intended to help businesses get the money they need for day-to-day operations.

Mr. Bush’s comments were the latest in series by administration officials and government leaders around the world to try to calm the financial turmoil and help stave off a deep recession. And markets around the world have rebounded on news of the coordinated efforts by various governments. The Dow Jones industrial average gained 936 points, or 11 percent, the largest single-day gain in the American stock market since the 1930s and future indexes were substantially higher. European markets were up at least 5 percent on Tuesday after rising nearing 10 percent Monday.

The president described the four measures as “unprecedented and aggressive.” Each of the new programs protects taxpayers and is “limited and temporary,” Mr. Bush said.

“These measures are not intended to take over the free market,” he said, but to safeguard it.

It will take time for our efforts to have their full impact,” Mr. Bush said, “but the American people can have confidence about our long-term economic future.

As the White House has done since the House rejected the initial bailout legislation, Mr. Bush sought to assure Americans that the efforts were necessary to protect their savings and retirement.

“I recognize that the action leaders are taking here in Washington and in European capitals can seem distant from those concerns,” he said. “But these efforts are designed to directly benefit the American people by stabilizing our overall financial system and helping our economy recover.”

Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at a meeting Monday afternoon d. He essentially told the participants that they would have to accept government investment for the good of the American financial system, according to officials.

Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase, officials said. The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes.

Read the rest:
http://www.nytimes.com/2008/10/15/business/economy/15bailout.
html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1223989371-GE
1byNeb0SM8dBDEOs0rOg

U.S. Investing $250 Billion in Banks: Financial ‘Bailout’ Continues to Intill Hope

October 14, 2008

By Mark Landler
The New York Times

WASHINGTON — The Treasury Department, in its boldest move yet, is expected to announce a plan on Tuesday to invest up to $250 billion in banks, according to officials. The United States is also expected to guarantee new debt issued by banks for three years — a measure meant to encourage the banks to resume lending to one another and to customers, officials said.

A euro coin and one US dollar bill. The dollar has dipped against ... 

And the Federal Deposit Insurance Corporation will offer an unlimited guarantee on bank deposits in accounts that do not bear interest — typically those of businesses — bringing the United States in line with several European countries, which have adopted such blanket guarantees.

The Dow Jones industrial average gained 936 points, or 11 percent, the largest single-day gain in the American stock market since the 1930s. The surge stretched around the globe: in Paris and Frankfurt, stocks had their biggest one-day gains ever, responding to news of similar multibillion-dollar rescue packages by the French and German governments.

Treasury Secretary Henry M. Paulson Jr. outlined the plan to nine of the nation’s leading bankers at an afternoon meeting, officials said. He essentially told the participants that they would have to accept government investment for the good of the American financial system.

Of the $250 billion, which will come from the $700 billion bailout approved by Congress, half is to be injected into nine big banks, including Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase, officials said. The other half is to go to smaller banks and thrifts. The investments will be structured so that the government can benefit from a rebound in the banks’ fortunes.

President Bush plans to announce….

Read the rest:
http://www.nytimes.com/2008/10/14/business
/economy/14treasury.html?_r=1&hp&oref=slogin

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Asian Markets Soar On Signs of Renewed Hope

By JEREMIAH MARQUEZ, AP Business Writer 18 minutes ago

HONG KONG – Asian markets soared for a second day Tuesday, led by a record 14 percent jump in Tokyo, after Wall Street rallied from its worst week ever on optimism that government rescue efforts will heal the crippled global financial system.

Read the rest:
http://news.yahoo.com/s/ap/20081014/ap_on_bi_ge/world_
markets;_ylt=AhU9ssfZ2fvgiOjAnyoc0oSs0NUE

A businessman walks past an electonic board showing the Hang ...
A businessman walks past an electonic board showing the Hang Seng Index. Global stock markets staged spectacular gains Monday as governments pumped hundreds of billions of dollars into banks crippled by the credit crunch, coaxing newly confident investors to buy shares.(AFP/Mike Clarke)

A South Korean woman passes a foreign exchange facility in Seoul. ... 
A South Korean woman passes a foreign exchange facility in Seoul.(AFP/File/Jung Yeon-Je)