Free Republic

BY EDWARD LUCEA & KRISHNA GUHA Nationalisation, long regarded in Washington as a folly of Europeans, is gaining rapid ground among US opinion-formers. Stranger still, many of those talking about federal ownership of banks are Republicans. Lindsey Graham, the Republican senator for North Carolina, said that many of his colleagues, including John McCain, the defeated presidential candidate, agreed with his view that nationalisation of some banks should be “on the table”. Mr Graham said that people across the US accepted his argument that it was untenable to keep throwing good money after bad into institutions such as Citigroup and Bank...

BY KRISHNA GUHA & EDWARD LUCE Washington. The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman has told the Financial Times. In an interview with the FT Mr Greenspan, who for decades was regarded as the high priest of laisser-faire capitalism, said nationalisation could be the least bad option left for policymakers. ”It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a...

Richard McKenzie: We're in a 'policy bubble,' which, too, will burst UC Irvine economics professor By RICHARD B. McKENZIE In the late 1990s, stock markets went through the "dot.com" bubble. Investors bought with "irrational exuberance" the new-era story that that the world economy had changed so much that high-flying price-earnings ratios for Internet stocks could be justified by the untold profits that virtually any firm establishing a low-cost "storefront" in cyberspace could earn into the distant future. The bubble burst in March 2000 when investors finally realized that the low cost of entry would ensure that profits of the vast...

Barney Frank expects GOP to resist regulationsBy Jay Fitzgerald Sunday, January 4, 2009 - Updated 3h ago As chairman of the House Financial Services Committee, Rep. Barney Frank had a busy 2008 - working with Federal Reserve chairman Ben Bernanke, Treasury Secretary Hank Paulson and others in an often desperate attempt to prevent a financial-system collapse. But there’ll probably be little respite in 2009 for Frank. The Newton Democrat is already setting ambitious goals for 2009: pushing for new regulations of the financial-services industry, bolstering affordable housing programs and passing consumer-protection laws. Frank - who became a national figure this...

The collapse of the U.S. auto industry would be easier to take if the cars were junk. That’s how it was the last time one of the Big Three (Chrysler) went belly up back in 1979. If you’re old enough to remember the Cordoba, you know what I’m talking about. It was easy to comprehend the failure of late ’70s-era Chrysler because Chrysler’s cars of that period were junk. People tend not to buy junk — end of story. Simple relationship. Cause and effect. But today? Never have the products of the Big Three — especially GM and Ford —...

WASHINGTON – U.S. Sen. Jim Inhofe said Friday a White House suggestion that part of the $700 billion Wall Street bailout now will go to automakers means Washington might be "completely out of control.'' "I've been a U.S. senator for some time, and I have never seen anything like this,'' the Oklahoma Republican said. Inhofe was responding to a statement by White House press secretary Dana Perino that the administration might use part of so-called TARP money to prevent a collapse of troubled automakers. "A precipitous collapse of this industry would have a severe impact on our economy, and it...

The Other American Auto Industry Plenty of car makers make a go of it in this country--they're just non-union and not headquartered in Detroit. West Point, Georgia Drew Ferguson IV is a 42-year-old dentist whose family has lived in this town, population 3,300, "since God put us here." To be precise, the family arrived eight generations ago. Ferguson went off to the University of Georgia, then on to dental school, after which he came back to West Point. He and his wife, whom he met in college, have four kids. A year ago, Ferguson was elected mayor. "There's a reason...

WXYZ) Sources tell Action News that the White House and U.S. automakers have reached a deal that could prevent a collapse of the industry. IN THE VIDEO PLAYER ON THE RIGHT, ACTION NEWS REPORTER TOM WAIT SAYS THAT A DEAL HAS BEEN REACHED BUT THAT AN ANNOUNCEMENT WILL NOT COME FRIDAY NIGHT Our source says the agreement with the Bush administration will mirror the bill that passed the House. We do know the White House and officials from GM have been in talks for several hours. The negotiations may also involve the Federal Reserve. President Bush is back in Washington...

As Obama revealingly said just last week, "This painful crisis also provides us with an opportunity to transform our economy to improve the lives of ordinary people." Transformation is his mission. Crisis provides the opportunity. The election provides him the power. The deepening recession creates the opportunity for federal intervention and government experimentation on a scale unseen since the New Deal. A Republican administration has already done the ideological groundwork with its unprecedented intervention, culminating in the forced partial nationalization of nine of the largest banks, the kind of stuff that happens in Peronist Argentina with a gun on the...

With the U.S. economy in crisis, George W. Bush’s already slumping popularity levels have sagged even deeper. This summer, his own political party kept him away from its national convention in St. Paul. The President himself has been reduced to wistful hopes that history will somehow justify him. At this low point, some counterbalance: 1) Even as you read this, Indian commandos are waging a deadly urban battle against Islamic terrorists. Those soldiers have almost certainly trained with U.S. Rangers or Marines — part of an intensifying U.S.-India security partnership that has been one of the most signal foreign policy...

<p>They hide in plain sight, and no one will police them for reasons that speak to corruption that has insinuated itself deep into the leadership of both the Democratic and Republican parties. The Bush Justice Department won't touch them, and it's not just because that entity will be changing the guard in less than two months.</p>

The federal government agreed Sunday to take unprecedented steps to stabilize Citigroup Inc. by moving to guarantee close to $300 billion in troubled assets weighing on the bank's books, according to people familiar with details of the plan. Treasury has agreed to inject an additional $20 billion in capital into Citigroup under terms of the deal hashed out between the bank, the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corp. Treasury officials will charge a higher interest rate for the capital injection -- 8% for the first few years -- than it has charged to dozens of...

Washington--The government is working on a new loan facility to help companies that issue credit cards, make student loans and finance car purchases. The Treasury Department and the Federal Reserve will unveil the program Tuesday, according to people familar with the plan. They spoke on condition of anonymity because a formal announcement has yet to be made. Treasury Secretary Henry Paulson has said he plans to use a "relatively modest share" of the $700 billion financial bailout money to pay for the new program. It's the latest effort by the government to break through a dangerous credit clog that has...

Government plans new credit, mortgage programs By JEANNINE AVERSA, AP Economics Writer 19 mins ago WASHINGTON – The government introduced a pair of new programs Tuesday that will provide $800 billion to help unfreeze the market for consumer debt and to make mortgage loans cheaper and more available.

Four major banks, including one that collapsed, two that received federal bailout money and one that filed for bankruptcy this past September, paid former President Clinton $2.1 million for 13 speeches he delivered on their behalf between 2004-2007, according to Senate financial disclosure statements filed by Sen. Hillary Clinton (D-N.Y.). Citigroup paid Bill Clinton $700,000; Goldman Sachs paid $550,000; Lehman Brothers paid $300,000 and Merrill Lynch paid $175,000 to the former president for speeches during that time period. Sen. Clinton’s 2008 financial disclosure reports are not yet available. Though some of the investment banks were able to entertain the former...

Our Readers Who Comment are up in arms this morning about the news that the government will protect Citigroup against potential losses on a $306 billion pool of troubled assets. Those readers have hated bailouts from the moment they were first proposed, and that anger has not diminished in the weeks since. They complain that huge banking companies who stiff them with astronomical interest charges for being a day or two late on their credit cards are getting help, but they're not. They wonder why government seems less willing to assist the auto industry and its threatened workers than it...

Bush defends Citigroup rescue, says more such moves are possible if others need helpWASHINGTON (AP) -- President Bush argued Monday that the government's dramatic rescue of Citigroup was necessary to "safeguard the financial system" and help the economy recover, and he said there could be more such moves if other institutions need help. Bush said he approved the action, recommended by Treasury Secretary Henry Paulson, while flying back to Washington on Sunday evening from meetings in Peru with Pacific Rim leaders. He spoke with President-elect Barack Obama on Monday morning about the move, part of what he has promised will...

Less than two months ago, Citigroup emerged from the wreckage of the financial crisis as one of the last titans left standing on Wall Street. Now, in a stunning turnabout, the banking giant has sunk to its knees after a series of blows that have driven its stock price to a mere $3.77 on Friday — and left it running short on time and options. In the decade since Citigroup was born from the merger of Citicorp and Travelers Group, it weathered many storms that threatened to pull it apart. But the current turmoil can be traced back to the...

With the sharp stock-market decline for Citigroup rapidly becoming a full-blown crisis of confidence, the company’s executives on Friday entered into talks with federal officials about how to stabilize the struggling financial giant. In a series of tense meetings and telephone calls, the executives and officials weighed several options, including whether to replace Citigroup’s leadership or sell all or part of the company. Other options discussed included a public endorsement from the government or a new financial lifeline, people involved in the talks said. The course of action, however, remained uncertain on Friday night, these people said, and other options...

The death of the Republican Party has an exact date: October 3, 2008. The day John McCain lost his bid for President also has an exact date: October 1, 2008. These dates are when the coroner officially declared death; the coma started much earlier: March 27, 2002. October 3, 2008 is, of course, when the $trillion bailout was passed by the House and signed into law by President Bush. October 1 was when John McCain voted for the bailout in the Senate, and went on to urge House Republicans to vote in favor of it. March 27, 2002 was when...