No excuse for selective memory, there was an engineered bail-out, you're forgetting the term bandied about "2 big 2 fail".
Oh come on... There is nothing wrong with the Fed getting the biggest financial players together and saying "you all need to make something happen or the consequences will be such and such. If you all work something out, and THEN need our assistance, we'll be there to help.."
The Fed didn't TELL them what to do, merely acted as the facilitator and putting them on the spot to make them work together.
And besides, it's no different than the massive governmental subsidization of the entire gold industry, as a result of maintaining the majority of the world's gold supply locked away from availability to the gold market.
It is GOVERNMENT'S ROLE to create policies that prevent irrational fears from overwhelming the economy and unleashing pent up and irrational "animal spirits" (as Keynes referrred to them).
LTCM was nasty, but from the government's point of view, should the rest of the US, and world, economy suffer for the mistakes and miscalculations of one firm??
No... But neither should it bear the total responsibility for cleaning up the mess, as they did with the S&L debacle.
Hawk |
