Panel on Bush's Banking Moves and Socialism

Panel on Bush's Banking Moves and Socialism

FOX News Special Report With Brit Hume - October 15, 2008


DURST: I think it is a last he resort solution. But I think two months ago, whoever thought about this would have been fired and kicked out of any parliament in the world.

BUSH: I frankly don't want the government, you know, being involved with businesses, owning businesses. It's not -- I don't think it's good for the country.

It was necessary that the stock be purchased to help us through this financial crisis.


BAIER: There you see a London banker and President Bush talking about the moves made both here in the U.S. and around the world to buy stock in various banks.

There are incentives for those banks to buy back the stock after a certain amount of years, but there is some concern out there that this is a step towards socialism.

We're back with our panel on this topic. Nina, let's start with you. For people out there who don't get it, there is $250 billion infused into these various banks to buy preferred stocks, and there are incentives for the banks to buy back the stock after the markets have stabilized and recovered.

So there is the end of the line, right?

EASTON: It's still, and, by the way, I think you raised this question, this is a question that should be asked the candidates tonight, what is their exit strategy to move us forward from this, because, as you say, it is incentives. There is no cap on the time period.

Is this a slippery slope to socialism? I would say no, but it's a slippery slope to an end of unfettered free market philosophy in this country. Why? Because we have set this precedent of bailouts.

Dating back even before these capital injections, you look at AIG, you look at arguably Fannie Mae and Freddie Mac, Bear Stearns. How do you say no to other big corporations that come up and say, look, we're going to fail and destroy the economic system.

It set up a precedence that is going to be hard to be say no to, a. B, the other thing that really concerns me about this is a Democratic Congress saying, look, we injected capital into you. You better start following our agenda.

And the Democrats have an agenda when it comes to lending and who should be receiving loans and so on. I worry about that. And I think it's a politicization of our banking system that probably had to be done, but there is going to be dangerous long-term effects that we can't even see yet.

BAIER: Mort?

KONDRACKE: The bailing out, I think, is a painful enough process that nobody is going to want to repeat it.

But Nina is right. This could lead to the politicization of credit, of Congress starting to order the banks around as to what they can invest in and what they can't invest in.

And, also, remember, as part of the $700 billion rescue package, the Democrats wanted to put union representatives on the boards of these various banks that they got bailed out.

I mean, if the Congress starts ordering around who is going to be on the board of American corporations, I mean, that is a very bad precedent, and that's something that Obama definitely should be asked about.

BAIER: Fred, President Bush has made clear numerous times in numerous statements that he is not comfortable with this, but it is the step that he had to take. Is that message getting enough?

BARNES: I think so. They are cliches that cover this-"necessary evil." And that's what it is.

Look, I'm not looking at socialism. It is designed to pre-serve a free market capitalist system and free market financial markets as best we can in a horrible circumstance.

My only concern is one thing -- will it work? Will it work? Are banks going to start lending to each other? Are credit markets going to open up? They have a little bit. They need to a lot more.

And, as Mort pointed out, the best way to look at whether there is growing confidence in what's being done is the stock market. It is always a bet on the future. It went way down today.

BAIER: Juan, if there is a Democratic president and Democratic congress, will the temptation be too great to stay in this kind of mobilization in these companies?

WILLIAMS: Right now it is not Democrat versus Republican. This is this is a Republican administration, and they are fully complicit in whatever goes forward in terms of these billions of dollars in bailout.

My sense is that it's not socialism, Bret, it is the government throwing a lot of money at banks, which remain private institutions with private investors and private agendas.

The suggestion here is the Democrats might start telling the banks what to do. My sense is that the banks will get away without having the government or people having any leverage, although it's all of our money keeping these banks afloat.

And I think the banks--and I wish that the people who are the captains of capitalism would have some sense of responsibility here to the little guy down the street, beginning with the investor, but also with workers.

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