The Federal Reserve Bank of New York stepped in to save Bear Stearns as investors fled the bank largely due to the exposures it had realized through its subprime hedge funds -- apparently the banks speciality. The rationale behind the bailout is to prevent a domino effect if Bear Stearns falls into bankruptcy. But if he bailout fails guess who foots the bill? That's right taxpayers. So with all of this money for banks (I haven't seen a figure but it's got to be in significant) why can't the American government find some money to help out struggling homeowners many of whom have been the victims of predatory lending practises. All they're getting from Bush is more fumbling and bumbling. Henry Paulson the Treasury secretary said on Thursday, "that it is not too early to suggest appropriate policy responses,” according to they NY Times. Of the three prospective presidential candidates only Hillary Clinton has formulated a comprehensive response calling for a 90 day moratorium on foreclosures, a freeze on adjustable rate mortgages $5 billion in immediate assistance to help homeowners and an additional $1 billion in emergency energy assistance to respond to the dramatic escalation in energy costs this year.
Why is it that governments (both here in Canada and the United States) are more than willing to use taxpayer money to help bail out private corporations when, through their own poor business practises find themselves in dire straits, but are willing to use that same money to help the taxpayers who gave it to them in the first place?