Quote of the Day: Bear Stearns and the Environment
by Lloyd Alter, Toronto on 03.18.08
Robert Ouellette sews a silk purse out of a sow's ear at Corporate Knights, a Canadian Environmental /business mag and website:
"By its actions, the U.S. government is showing that there is no lesson to be learned, or no penalty to be given. It also shows that in spite of its right-wing rhetoric, the “freest” world economy can and does interfere with the marketplace. Ironically, that’s good news for environmentalists. Now that the U.S. government has set this precedent, the right’s self-serving arguments about non-interference in free markets no longer apply. And now everyone knows it."
"Don’t get me wrong. I am not saying that the financial market place should be done away with or should be allowed to meltdown. What I am saying is that this week’s events clearly illustrate the role regulatory controls play in a complex world. There is a lesson here, but it is not, unfortunately to the free markets whose actions precipitated this crisis—they’ve been spared that rod. The lesson is to people and governments everywhere. We are reminded by the Bear Stearns fiasco that they do have the obligation, power, and right to use whatever regulatory levers exist to both save the economy, and save the environment. After all, what is more important, the financial health of rule-breaking investment firms that benefit the few, or the long-term health of the environment that benefits everyone?" ::Corporate Knights
We have set up a bit of a straw man, here. Obviously, the Fed did not rush to save Bear Stearns - they were rushing to save the economy. That is an extremely important distinction, because I can guarantee you that the Fed could care less about Bear Stearns, but they are extremely concerned about the financial health of our country.
It is unfortunate that the few (in each huge corporate rip-off) that swindle the regular population aren't stripped of all of their assets in order to partially recompence those they cheated and then executed (literally) publicly to set an example for others who might otherwise try one of these schemes.
Actually bankruptcy and liquidation would be a much better deal for Bear Stearns than selling the entire company for 1/6th the value of just their New York building. The Fed wiped out the shareholders, such the the British investor who sunk a billion dollars into the company last year, in order for its debt obligations to be honored.