The Intersection

The Bear Stearns bailout

After the federal government offered to finance up to $30 milion of Bear Stearns' assets in an agreement in which JPMorgan purchases the beleaguered investment firm, Cliff Kincaid, writing for the National Ledger on March 17, described the bailout as "socialist" while acknowledging the Wall Street Journal and Lawrence Kudlow are defending the move. While appearing on Fox News, Secretary of the Treasury Henry Paulson chastized Chris Wallace for "jumping to conclusions" about the cost to taxpayers.

As Kincaid notes as he reports this, Paulson did not actually say what the move would cost taxpayers. Kincaid also says presidential contender Hillary Clinton has not denounced the bailout of the investment firm, whose employees have given her, according to Reuters, in excess of $144,000 — far more than they gave to John McCain and Barack Obama, combined. Obama and McCain, according to Reuters, each received less than $30,000 from the employees of the firm.

Obama has said the federal reserve "did the right thing" with Bear Stearns after alluding to fears of a "domino effect on Wall Street" were the institution allowed to collapse.

Harold Meyerson, writing for the American Prospect, suggests if the federal government bails out investment firms, said firms should add representation to their boards from the general public.