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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Thomas M. who wrote (89606)	2/17/2001 1:27:30 PM
From: Sam Citron	Respond to of 132070

Look, Thomas, I'm really not trying to sell you my ideas. As I said, moral hazard is a risk in any bailout. Nobody believes in good faith that governments should insulate free-market investors from risk. The reason Mexico was rescued in 1995 was because it had emerged over the previous decade from an inflation prone, highly unstable, rigid, government controlled economy towards free markets, and, in doing so, had become the poster child for emerging third world economies. Abandoning Mexico might mean the end of the cherished free market model. Discrediting this model might have a much larger impact on the world economy than what might happen to Mexico, pushing many other developing countries off the cliff. The assistance package that was agreed upon was the least-worst of all alternatives. I'm sorry that it did not address all your concerns about moral hazard. We can't afford to be puritanical about such matters. Even lenders sometimes deserve another chance. ;-) [with apologies to Bob Woodward, Maestro: Greenspan's Fed and the American Boom Simon & Schuster, NY, 2000, p. 139]