Lehman Brothers Hearing, Consequences of the Bailout and Online Ad Controversy
The House Oversight and Government Reform Committee holds a hearing to investigate the collapse of Lehman Brothers.
The Wall Street bailout fails to slow economic panic and decline.
Google comes under fire for an advertising partnership with Yahoo.
More headlines: listen to the LibertyWeek podcast.
1. BUSINESS
The House Oversight and Government Reform Committee holds a hearing to investigate the collapse of Lehman Brothers.
CEI Expert Available to Comment: Center for Entrepreneurship Director John Berlau on how members of Congress are blaming the wrong culprit:
“Rep. Carolyn Maloney’s horse and ‘whipping boy’ was deregulation. She is blamed the entire crisis on deregulation, and specifically the repeal of the Depression-era Glass-Steagall law that separated commercial and investment banking. The repeal was done through the Gramm-Leach-Bliley Act, which Maloney neglected to say was passed on an overwhelmingly bipartisan vote and signed by President Bill Clinton in 1999. Clinton, in fact, recently defended the law, saying it didn’t contribute much to the current crisis, and has even alleviated it by allowing banks to save failing brokerages.”
2. POLITICS
The Wall Street bailout fails to slow economic panic and decline.
CEI Expert Available to Comment: Special Projects Counsel Hans Bader on how the bailout could corrupt the executive branch in the future:
“The bailout may be an economic failure that generates inflation, explodes the national debt, and eventually spawns future asset bubbles, but it may simultaneously be a political success. Many people thought the bailout must be a good idea if both presidential candidates endorsed it. But by giving the Treasury Secretary enormous discretion to buy, or not buy, bad loans from Wall Street at either high or low prices, the bailout concentrates enormous power in the hands of the president and his treasury secretary, to extort money from Wall Street for his reelection bid. As a result, experts cited in the Washington Times worried it could lead to a ‘financial dictatorship.’ No wonder both Obama and McCain voted for it. Each of them expects to win the election, and end up controlling a $700 billion slush fund that they can use to ensure their own re-election.”
3. TECHNOLOGY
Google comes under fire for an advertising partnership with Yahoo.
CEI Expert Available to Comment: Technology Policy Analyst Cord Blomquist on criticism of Google’s previous ad deal with DoubleClick:
“While the controversy seems complex, it is really quite simple. The merger is efficient, it helps fledgling websites with ad revenues, and it benefits investors and consumers. Google teaming up with DoubleClick is a win-win for everyone involved…The acquisition will make the market more competitive by allowing Google to compete with Yahoo in image-based advertising. As with most criticism of acquisitions, facts and economic reality hardly influence regulators and Congress.”
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