Robert Stein 1924-2014

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Tuesday, September 09, 2008

Beyond the Bailout

The Republican mantra--government bad, free markets good--is taking a beating in the Fannie Mae/Freddie Mac bailout as both presidential candidates approve the Treasury's action to keep the housing and financial markets from going over a cliff but, in this personality-driven election, voters won't pay much attention to the issue.

Barack Obama is understandably reluctant to talk about the Bush Administration's and Congress' lack of oversight that led to the fiasco for fear of being attacked as a proponent of Big Government. John McCain, with his Keating Five background, will avoid the subject and keep pounding away at "business as usual" in Washington.

But behind all the clich├ęs, the bailout should prompt some serious thinking about the balance between freedom and responsibility in a capitalist system that has made the nation prosperous but can cause chaos when all regulation is seen as bad and the cowboys of the financial world are free to do whatever they want.

Only the oldest of American generations now remembers the bank closures and panic of the 1930s even as the FDIC's problem bank list grows larger each month. The others don't know what a run on the local bank looks like, except from watching Jimmy Stewart in "It's a Wonderful Life."

At some point, in the presidential debates about change, the candidates should be pressed for straight talk about the role and size of government needed to keep Americans both free and secure.

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