Socialism bailing out capitalism? (The Federal Reserve and the Banking problems)

I think Grizz, that you're missing something more fundamental. This isn't the first time America has crashed. We had a railroad crash, then telegraph, then telecom, savings and loans, internet bubble and many others.We essentially haven't learned our lessons. We keep going after the next big thing only to get massively burned. True, there are benefits to such booms, but there are also huge losses. If the past 100 years have shown us, regulation hasn't stopped this cycle. It is our culture that keeps setting us up for huge gains and huge losses.

Because...As I understand the credit crisis, it was the behavior of firms like Bear as well as the rating companies that created the problem in the first place.

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The FED's policies played a large role in that behaviour by lowering rates.

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What? That makes little sense. The Fed actually raised rates over the growth of the bubble. And in the past, the Fed had rates much lower then the peak rates of the subprime bubble and we did not see anything of this magnitude. How can you blame the Fed when it was the rating agencies and banks who created the actual problems?I recently spoke to a Brandis money manager who stated that the ratings agencies literally sold ratings to the highest bidder in a similar way that the Big 5 accounting firms sold audits. That's the problem, not the Fed. But now I'd agree that the Fed is creating a future problem in how it went about with the Bear Sterns issue.

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Stated another way, government regulation is not the same as socialism.

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Of course. Without government regulation, capitalism cannot be sustained.

I think you're missing what is underlying this whole problem.The American Economy is changing. Simply put, the US economy is not competitive in many industries. So obviously the thing to do is get out of those industries. The key problem here is that the US public education is so abysmal in producing students of the sciences and mathematics that we can't quickly adapt to the changing brain economy over brawn economy. Trying to halt the movement of MNCs to the developing world ignores the fundamentals of such a change. The answer to saving and creating jobs is not in halting existing MNCs from leaving but creating new brain jobs by cultivating a heavily science based education system.Frankly, none of your examples (or many of those of the candidates competing for the White House) seem to address this problem.

Bear Sterns has essentially been Nationalized.And they call this economy 'capitalist.'US taxpayers got the debt that killed BS and MS got the revenue generating assets.