bear stearns

They’re In The Money

by Iain Murray on October 21, 2008 · 2 comments

in Bailout Watch, Economy

We’re hearing from a variety of sources that Jamie Dimon, the CEO of JP Morgan Chase, has agreed in principle to be Obama’s Treasury Secretary. Dimon worked hand-in-glove with Hank Paulson over the Bear Stearns bailout. The new boss, it appears, will be the same as the old boss.

Looks like the revolving door between Wall Street and the Treasury Department ain’t going to stop any time soon.

In a related note, the excellent Capital Research Center, which has done so much good explaining how leftist NGOs dictate public policy, has now turned its lights on Goldman Sachs.

Lehman bankruptcy: In capitalism, failure is not a dirty word

by John Berlau on September 15, 2008 · 6 comments

in Economy, Legal, Nanny State, Politics as Usual, Precaution & Risk

My reaction to Lehman Brothers’ declaring of Chapter 11 bankruptcy and the refusal of Treasury Secretary Hank Paulson and others to take extraordinary Bear Stearns-like measures for the government to prop the firm up can be summed up in three words: It’s about time!

Business failure is not only a permissible outcome of capitalism, it’s a necessary one. As the great economist Joseph Schumpeter has written, the process of “creative destruction” is essential for the market to function. For innovation to flourish and the standard of living of the populace to improve, the market must be free to reward success and punish failure.

As Schumpeter wrote in his 1942 book Capitalism, Socialism and Democracy, there is an ongoing “process of industrial mutation — if I may use that biological term — that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in, and what every capitalist concern has got to live in.”

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