Showing posts from March 26, 2008

Important commentary on the financial crisis

Martin Wolf is (I think) the best economic analyst writing from a pro-free market perspective working in the media today. Read his latest commentary in the Financial Times. If he concludes that the US "has passed the high water mark of financial deregulation," that is probably the case. The end of an era. The rescue of Bear Stearns marks liberalisation’s limit By Martin Wolf Published: March 25 2008 19:06 Last updated: March 25 2008 19:06 Remember Friday March 14 2008: it was the day the dream of global free- market capitalism died. For three decades we have moved towards market-driven financial systems. By its decision to rescue Bear Stearns, the Federal Reserve, the institution responsible for monetary policy in the US, chief protagonist of free-market capitalism, declared this era over. It showed in deeds its agreement with the remark by Josef Ackermann, chief executive of Deutsche Bank, that “I no longer believe in the market’s self-healing power”. Deregulation has rea

When taxpayers end up holding the baby

Business Times - 21 Mar 2008 When taxpayers end up holding the baby Greater oversight and transparency of financial industry needed to regain market trust By LEON HADAR WASHINGTON CORRESPONDENT FOR a while, officials, lawmakers and pundits in Washington were debating whether the American economy was - or soon would be - in a recession. The key historical analogy applied in their discussions was the mild recession in late 1990, during the presidency of George Bush the elder that lasted for only six months. The message then was that the economy was facing a cyclical downturn that could be managed through appropriate monetary and fiscal policies. So it is intriguing - or scary, some would argue - when the same officials, lawmakers and pundits are now starting to refer more frequently in recent days to the Great Depression of the 1930s and to the various 'New Deal' programmes initiated by then president Franklin Delano Roosevelt. Under his leadership, the US federal government succ