The NY Times writes of the nationalizing of banks. The government proposed to support all types of banks, small and large. Henry Paulson said the injection of $250 billion was necessary to restore confidence. This plan is similar to Europe's and it is used to thaw credit. The federal government wants banks to start lending money and sending capital. The intent of this is mainly to drive confidence up and take over stakes of the banks. Although the Dow closed after gaining 936 points Monday, today was different. The U.S. dollar fell against the Euro after the Federal government announced its involvement in the market according to CNN. The Federal Reserve said its all in. It will supply unlimited amounts of money for the global banking system. This has to be a drive towards boosting confidence. All I have to say is: money, money, money!!!
Meanwhile, Daniel Larison writes that bankers are the ones who have lost confidence and the government contributed to this loss. The bailout was false fear. People thought the market was going to crash. Consumers panicked and started short-selling. This caused only more chaos according to Larison. The nationalizing of banks gives too much control to the federal government. It is only one more step towards socialism. This eliminates the free market principles. What's next?
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2 comments:
The Brown Man,
What do you think about the nationalization of banks? Is this nationalization puny or enormous compared to the European bailout? Finally, how did this experimental writing style play out for you?
Tommy
Tommy,
I have mixed feelings about the nationalizing of banks. Its a good idea to try and stimulate the economy through targeting one of the main causes, but on the other hand it seems like pure publicity and a means to boost confidence. Moreover, the tycoons who helped cause the chaos will be profiting even more because of this essentially "national bailout." Europe has also injected money into its economy and the stocks have soared, but as an American, this nationalization is huge as it steps out of bounds for the role of the federal government.
This writing style was pretty difficult. I had so much to say but was restricted to choppy sentences. Not really my thing, but it was interesting.
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