On April 14, we wrote a column entitled, “Courage Under Fire,” which lauded Ben Bernanke and Hank Paulson for their bold and creative actions in recent weeks, and credited their startlingly non-bureaucratic style of leadership with averting a global financial meltdown.
Read Full Article
Reader Rants and Raves
► I disagree with your assessment of the Bear brokered buyout by the Fed. How do we know that a cataclysmic crisis was immediate? There is much speculation as to what may have happened if Bear had gone belly up but no one knows for sure what, if any, crisis may have occurred.
By your own words, the buyout 'stabilized the financial system of the U.S., and perhaps the world - at least for the time being.' How do we know that this didn't just place a tanker truck of gasoline next to a camp fire - with the hose open and running gasoline onto the ground?
The Fed has placed itself in a very precarious situation. What happens when JPMorgan or Citigroup or any number of other companies come calling to the Fed for a handout? Will we (the U.S. taxpayers) bail them out as well? What happened to personal responsibility and accepting the consequences for one's decisions and actions (referring also to the mortgage mess)?
The one thing I agree with you is that it took 'courage' for the Fed to be so stupid and blind in reacting so quickly. Hopefully this bailout doesn't lead to more severe problems later down the road.
— C.K.
► The only thing these two are doing is protecting their jobs for when they get out of the administration. If the S.E.C., Bank regulators and other supervising authorities had been doing their jobs for the last three years this event would not be so traumatic!!!! Seriously, as the ex-CEO of GE, your manager comes in to your office with this story: “Excuse me, Mr. Welch, the no-documentation loans we gave to people are going into default and the customers have no assets.” Did anyone verify their assets or employment figures prior to giving them the money?
NO SIR. Now what do you do, Mr. Welch?
A. Give out more loans
B. Look for a handout from tax dollars
C. Fire this guy and find someone who knows what they are doing
Come on, Mr. Welch! These guys have been lying for years and now my grandkids are going to bail them out. Not fair!
— Anonymous
► The Fed’s actions are good but they fix only half of the problem. The banks – the money lenders. If we think of this money flow as a 2 way street that goes from the banks to borrowers and then from borrowers back to the banks, the whole system collapsed when the line from the borrowers back to the banks broke. Currently, the fix injects cash back into the lenders (banks) to make up for the loss generated by not having the borrowers pay back their loans. This is keeping the banks afloat but it leaves the borrowers in stress and this decrease the consumer confidence with all its economic consequences.
If the fix would inject this same cash into the borrowers and the borrowers in turn will pay it back to the lenders (banks) then the whole circuit will be kept afloat and spinning and thus allow for a better economic stability. The consumer confidence will remain high and push the economy up from any eventual downturns. Not to mention that this arrangement could be done in such terms that actually the government will recover the money injected under some pre-agreed terms.
— L.B.
► This is the best thing in BusinessWeek for years. Won’t but should get a Pulitzer! Isn’t it a great country when people like Paulson volunteer to do what he does?
— A.F.
► Bravo! The first really positive article on the actions of the Fed and Treasury. All the "smarty pants types" go on and on about "moral hazard". How about a break! Bear Stearns was not bailed out. Who cares about Bear? The system had to be protected.
— J.A.
Add your voice to the debate
Back to top