Bear Stearns Bailout

[kandrathe]

I read the story. But I don't understand what you are pointing at now ( I would like both to agree and disagree with you, but before writing for 10 minutes I should ask this). You say it is a good thing that the FED bailed out Bear Stearns? Or a bad thing? And you usually are against government interference right?

I guess I think they are both bad. In this case it's like who do you blame, the heroin addict or the dealer? Do you bail your friend out of jail, and loan him the $100 to make his rent payment?

Bear Stearns should suffer for their mistakes, and people who borrowed money which they cannot repay should suffer for their bad decisions, which is the pure statement of Capitalism. On the other hand, if the failure of one of the largest investment houses in the world destabilizes the world enough it would cause starvation and war everywhere. I guess in this case, I need to swallow my principles and accept that stabilizing the world is a good thing. But, I fault the dependency as much as I fault the dependents.

If we are to have learned anything from WWII it is that there is a link between economic stability and national security. George Marshall was visionary here for post WWII reconstruction in Europe. Other lessons would be that capitulation to ruthless dictators gets you nothing, you cannot have a lukewarm ally like Stalin for long, in a war of attrition the one with the larger population wins, nationalism bites, and the next war will not be fought with the last wars equipment.