U.S. Lawmakers Attack Bailouts By Gregory Viscusi Sept. 19 (Bloomberg) -- Two U.S. senators have said their government's bailouts of financial institutions make capitalist America seem more like France.
They didn't mean it as a compliment, but French lawmakers are taking it that way. ``There's nothing wrong with being French,'' said French Finance Minister Christine Lagarde. With stakes worth 125 billion euros ($179 billion) in publicly traded companies, the French government has more experience in marketplace intervention than the U.S., which still is coming to terms with its American International Group Inc. takeover and bailouts of Bear Stearns Co., Fannie Mae and Freddie Mac. Those actions mean America can no longer claim to be a greater bastion of free-market capitalism, U.S. Senator Richard Shelby said in a Sept. 16 CNBC interview. ``It sounds like France to me,'' the Alabama Republican said. ``It's a European model that we shouldn't go down.'' His comment echoed another by Senator Jim Bunning at a July 15 Banking Committee hearing after Treasury Secretary Henry Paulson sought permission to inject funds into Fannie and Freddie. ``When I picked up my newspaper yesterday, I thought I woke up in France,'' the Kentucky Republican said. ``But no, it turned out it was socialism here in the United States.'' Those sentiments provoke little angst in France, which bore the brunt of Republican anger in 2003, when its opposition to the Iraq invasion prompted congressional cafeterias to rename French fries ``freedom fries.'' `Pragmatism and Incisiveness' ``I salute the Americans,'' said Bernard Carayon, a member of the French Parliament's finance committee from President Nicolas Sarkozy's Union for a Popular Movement party. ``What they are doing is a sign of their pragmatism and incisiveness,'' he added. ``The state exists for the common good, and so it's natural that they intervene.'' Once things calm down, Carayon said, ``I'm sure our American friends will draw all the necessary lessons from a regulatory and accounting point of view.'' Lagarde said in an interview that Paulson simply did what was necessary to prevent financial panic from spreading. ``I have huge respect for Hank Paulson,'' Lagarde said. ``He's under incredible pressure to manage a situation where he's showing sang- froid, control, and a good understanding of the situation.'' As for Paulson's critics, she added: ``Anybody who's not at the wheel, who's simply sitting on the fence and watching, would be criticizing whichever decision is made.'' No Bank Bailouts The French government hasn't pledged public money to help French banks, which have reported 18.6 billion euros in writedowns linked to subprime securities and tighter credit markets. Instead, Societe Generale SA, France's second-largest bank, raised 5.5 billion euros from shareholders; Credit Agricole, the third biggest, raised 5.9 billion euros; and Natixis is raising 3.7 billion euros on the Paris Stock Exchange. The French government's stakes in publicly traded companies include Airbus SAS parent European Aeronautic, Defence & Space Co.; Electricite de France SA; carmaker Renault SA; Air France SA; and France Telecom SA. The last French state bailout was in 2004, when Sarkozy, then finance minister, rescued engineering company Alstom SA with cash and loans. Sarkozy, elected president in May 2007, declined to comment on the U.S. rescues, saying he'll discuss the world economic situation in a Sept. 25 speech in Toulon. --~--~---------~--~----~------------~-------~--~----~ 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. -~----------~----~----~----~------~----~------~--~---
