The difference being that this one will hopefully end some day. Not so with FDR's, unless we finally choose to do such things right.
On Sep 20, 11:18 am, "M.A. Johnson" <[EMAIL PROTECTED]> wrote: > The Fed’s AIG Loan/Takeover: Another New Deal LegacyRobert Higgs > My idea of the ratchet effect in the growth of government, which I first > described in detail in an article published in 1985 and employed extensively > in my 1987 bookCrisis and Leviathan, has received a degree of acceptance > among scholars. One aspect of my model, however, has received relatively > little notice, although I have always regarded it as especially important. > That is the notion that episodes of crisis and abrupt growth of government > leave legacies after the crisis has passed, and these legacies, which may be > institutional or ideological, sometimes lie dormant for long periods before > they exert effects on the course of events. > I thought immediately of this idea today as I read the Washington > Post’sreportof the Fed’s loan/takeover of the insurance giant AIG. Having > heard preliminary discussions of the possibility of such a takeover, I had > wondered about the government’s authority for such an action. The Post’s > report answered my question as follows: “The Fed is using the emergency > authority it was granted during the Great Depression. By law, the Fed can > lend money to any individual, partnership or corporation in unusual and > exigent circumstances, when the borrower cannot access funds in other ways. > The power had not been exercised until March, when the Fed used it to rescue > Bear Stearns.” I confess that I had not known about this particular Fed > authority until today. > So, here we are in the year 2008, witnessing the use of a power that had lain > dormant in the government’s arsenal for more than 70 years, a power whose > existence, I am confident, few people were aware of. Beware, all ye who would > endow the state with amplified powers. It may refrain from using those powers > for a very long time. Yet, there they lie, sleeping peacefully, but capable > of being awakened and used with highly consequential (and, as in this case, > extremely unfortunate) effect.http://hnn.us/blogs/entries/54590.html --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more. -~----------~----~----~----~------~----~------~--~---
