Friday, 26 September 2008

Why Congress must stay put until the deal is signed?

It seems as though the American Congress will now stay in session until agreement is reached over the US government's injection of capital into the financial system.
The sticking point is the Republican members who are insistent on stringent checks and controls on the investment and cannot quite stomach the fact that the most right wing executive in American industry is about to nationalise the financial system.

Much as I think the principles and ramifications behind this move are questionable,it is a near certainty that without this injection of capital,we could have a financial meltdown and a crippling world recession.

Yes there are implications for the taxpayer but the taxpayer is also the consumer and the employee and this effective recapitalisation of the banks is the only way that depression can be avoided.

Gordon Brown has in the last couple of hours stood in front of the UN and stressed the need for global actions including a degree of regulation but the most pressing thing to do is to recapitalise.The free market isn't going to be in a position to do that.

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