It is apparent that in lieu of looking for viable solutions to the looming credit crisis, the editors would rather spend their time speculating on the motives behind the Fed's actions and advocating the near-socialization of America's economy. I do agree that this crisis, if not dealt with promptly, will cause untold millions of people hardship both in the United States and abroad; however, there is little proof that the methods advocated by The Nation possess any degree of solvency except the underlying assumptions held by the editors. Instead of using the credit crisis as a platform for espousing an infeasible set of reforms, the editors would be better served to look at the current system and seek more practical means of preserving progressive values.
The tone of the editorial drips with vitriolic sentiments towards the Fed, essentially claiming that its attempts to preserve capital in the country are somehow a part of a manipulative scheme keeping Wall Street high rollers on top and dumping their losses on the innocent American public. The ignorance of this assumption becomes clear when one looks at how this lending crisis all began: local and regional banks (who lie outside the regulatory powers of the Fed) began to issue loans to individuals with bad credit as the housing market boomed. To only blame the Fed in this is absurd--overzealous home buyers, local banks and financial institutions were all allured by the rewards of the housing market, and unfortunately failed to exercise caution and judgment in this area.
So, should the US bail out all struggling banks, nationalize dying industries and ignore the Fed? Absolutely not! Getting out of this credit crisis will be a struggle; in pointing the finger solely at Wall Street and the Fed, The Nation is only alienating the two essential parties needed if reform of the financial system is to occur. Their response is to use Congress --potentially the least effective branch of government this year, considering the November elections; partisan divisions between the House, Senate and White House; and the overall nature of the legislative process--to enact these reforms. Let's give the Fed a chance to resolve the credit crisis before advocating the implementation of improbable and impractical economic reforms that will only stifle the US economy beyond its already fragile state.
Mar 25 2008 - 6:04am