Monday, March 17, 2008

More Lyrical Wisdom from Merle Hazard

The Motley Fool has a scathing reaction today to Fed Chairman Bernanke's bail-out of Bear Sterns.

"If Bernanke, Hank Paulson, and the rest of our government's Wall Street Super Friends really believe in free markets, they'll make sure that companies are allowed to fail, especially when they richly deserve it, as Bear did. And if they need to step in and prop up certain, select businesses to shore up the system, they should make sure that the people doing the bailout -- we taxpayers -- get a potential payoff for their largess. Why should JPMorgan get such a sweet deal with the rest of us holding the bag on the risk?"

"Privatizing profits and socializing losses is no way to run an economy. I wonder whether Bernanke learned that in grad school."

Forget grad school - why didn't he learn better from Merle Hazard? This is just what Merle was warning him about - by name! - in his tongue-in-cheek country song "In the Hamptons:"

Ben Bernanke can’t you understand
Wall Street needs a helping hand
Or there’s gonna be a nasty recession some day
Fed gov’nors don’t you see?
We’ll lose three points of GDP!
The working man gets hurt the worst
If you don’t save…the rich ones first

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