report scams here at scam.com dont get scammed Scams and Scammers - Expose hypocrisy and spread respect ! Don't get ripped off! REGISTER  

Go Back   scams > Scam Message Board > Political Chat
Register FAQ Register To Post Member List Promote Search Today's Posts Mark Forums Read
Reply
 
Thread Tools
  #1  
Old 09-18-2008, 04:18 AM
sojustask's Avatar
sojustask sojustask is offline
Lady Moderator- Just call me Your Majesty
 
Join Date: Feb 2005
Location: East Texas
Posts: 13,894
Bailout Is Seen as a Free Market Detour

And here once again is how the rest of the world views this administration's actions.


Abroad, Bailout Is Seen as a Free Market Detour

By NELSON D. SCHWARTZ
Published: September 17, 2008

PARIS — Is the United States no longer the global beacon of unfettered, free-market capitalism?

In extending a last-minute $85 billion lifeline to American International Group, the troubled insurer, Washington has not only turned away from decades of rhetoric about the virtues of the free market and the dangers of government intervention, but it has also probably undercut future American efforts to promote such policies abroad.

“I fear the government has passed the point of no return,” said Ron Chernow, a leading American financial historian. “We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams.”

The bailout package for A.I.G., on top of earlier government support for Bear Stearns, Fannie Mae and Freddie Mac, has stunned even European policy makers accustomed to government intervention — even as they acknowledge the shock of the collapse of Lehman Brothers.

“For opponents of free markets in Europe and elsewhere, this is a wonderful opportunity to invoke the American example,” said Mario Monti, the former antitrust chief at the European Commission. “They will say that even the standard-bearer of the market economy, the United States, negates its fundamental principles in its behavior.”

Mr. Monti said that past financial crises in Asia, Russia and Mexico brought government to the fore, “but this is the first time it’s in the heart of capitalism, which is enormously more damaging in terms of the credibility of the market economy.”

In France, where the government has long supported the creation of “national champions” and worked actively to protect select companies from the threat of foreign takeover, politicians were quick to point out the paradox of what is essentially the nationalization of the largest American insurance company.

“Today the actions of American policy makers illustrate the need for economic patriotism,” said Bernard Carayon, a lawmaker of President Nicolas Sarkozy’s center-right governing party, UMP. “I congratulate them.”

For the “evangelists of the market, this is a painful lesson,” he added.
National economies are entering “an era where we have much more regulation and where the public and the private sector will mix much more.”

In parts of Asia, the bailouts stirred bitter memories of the different approach the United States and the International Monetary Fund adopted during the economic crises there a decade ago.

When the I.M.F. pledged $20 billion to help South Korea survive the Asian financial crisis of the late 1990s, one of the conditions it imposed was that the Korean government allow ailing banks and other companies to collapse rather than bail them out, recalled Yung Chul Park, a professor of economics at Korea University in Seoul, who was deeply involved in the negotiations with the I.M.F.

While Mr. Park says the current crisis is different — it is global rather than limited to one region — “Washington is following a different script this time.”
“I understand why they do it,” he added. “But they’ve lost credibility to some extent in pushing for opening up overseas markets to foreign competition and liberalizing economies.”

The ramifications of the rescue of A.I.G. will be felt for years within the United States, too.

A.I.G. was a different kind of company than Fannie Mae or Freddie Mac, which enjoyed government sponsorship, or Bear Stearns, which was regulated by the federal government.

“This was an insurance company that wasn’t federally regulated,” said Gary Gensler, who served as a top official in the Treasury Department during the Clinton administration. Nor did A.I.G. have access to Federal Reserve funds or deposit insurance, like a commercial bank.

“We’re in new territory,” Mr. Gensler added. “This is a paradigm shift.”
A.I.G. is also in a different league because of the breadth of its businesses and its extensive overseas operations, especially in Asia.
What’s more, it fell into something of a regulatory gap under the current rules.

While the company, based in New York, is better known for selling conventional products like insurance policies and annuities overseen by state regulators in the United States, it is also deeply involved in the risky, opaque market for derivatives and other complicated financial instruments that operate largely outside regulation.

Along with the threat to the plain-vanilla insurance policies held by millions of ordinary consumers, it was the threat posed by these arcane financial instruments that led Washington to bail out A.I.G.
So far that rescue has not steadied markets.

“It’s pure crisis management,” Mr. Chernow said. “It’s the Treasury and the Federal Reserve lurching from crisis to crisis without a clear statement on how financial failures will be handled in the future. They’re afraid to articulate such a policy. The safety net they are spreading seems to widen every day with no end in sight.”


.
__________________
.
When an honest man/woman who is mistaken learns the truth, at that exact moment, he/she ceases to be mistaken or he/she ceases to be honest.

When we are unable to find tranquility within ourselves, it is useless to
seek it elsewhere.
---= Francois de La Rochefoucauld


Reply With Quote

  #2  
Old 09-18-2008, 04:23 AM
Self Employed
 
Posts: n/a
Re: Bailout Is Seen as a Free Market Detour

Love it ....

the BBC blasted the bunch of jackass
GOPers last

Palin as President ... we deserve what
follows as she is a complete disaster




Reply With Quote

Reply

Similar Threads
Thread Thread Starter Forum Replies Last Post
Market 10/market10/Market Central de compras 10, S imzune Internet Scams 0 09-29-2010 10:51 PM
No, the Free Market Did Not Cause the Financial Cr brucefan Political Chat 23 07-16-2009 09:16 AM
There is no free market in this country Truth-Bringer Political Chat 8 06-16-2009 12:28 AM
New Bailout conspiracytheory Political Chat 3 10-01-2008 07:58 AM
Talks On Bailout Fails - This Bailout Is Very Bad hello1122 Political Chat 1 09-26-2008 04:23 AM

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is On
Forum Jump




This site may contain advice, opinions and statements of various information providers. Scam.com does not represent or endorse the accuracy or reliability of any advice, opinion, statement or other information provided by any information provider, any User of this Site or any other person or entity. Reliance upon any such advice, opinion, statement, or other information shall also be at the User’s own risk. Neither Scam.com nor its affiliates, nor any of their respective agents, employees, information providers or content providers, shall be liable to any User or anyone else for any inaccuracy, error, omission, interruption, deletion, defect, alteration of or use of any content herein, or for its timeliness or completeness, nor shall they be liable for any failure of performance, computer virus or communication line failure, regardless of cause, or for any damages resulting therefrom. Just because a business, person, or entity is listed on scam.com does not necessarily constitute they are scammers. This is a free open forum where people can debate the merits from the consumer's or business owner's perspective. Registration and participation is always FREE.


All times are GMT -5. The time now is 02:15 PM.




Scam.com Is Proudly Hosted By Rackco and Protected By CloudFlare


Scams Message Board - Copyright 2004-2013 Scam.com , All Rights Reserved.