Who’s Going to Rescue the Fed & U.S. Treasury?
After Bear Stearns, Fannie, Freddie, IndyMac Bank, and now maybe Lehman Bros. and Washington Mutual, one can only ask, “who’s going to rescue the rescuer(s),” if need be?
While certainly preferable to systemic meltdown, having the U.S. government assume trillions of debts (an unknown percentage bad), and effectively nationalize large swaths of the U.S. housing market (finance, insurance, underwriting, deposits, etc.) poses some very big, long-term questions.
Two in particular come to mind: 1) is the U.S. private enterprise/capitalistic model still intact?; and 2) if the pendulum has indeed swung away from that, how (and when) is it made to swing back?
Those are long-term questions. For now, Washington and Wall Street’s focus and concerns are clearly much more immediate.