Lemon Socialism: Robert Reich

Monday, January 26, 2009

Robert Reich highlights the fact that American taxpayers, through the current bailouts, are gaining part ownership of the weakest aspects of the U.S. economy—poorly managed banks, GM and Chrysler, Fannie and Freddie, while the industries with the best chances of rebounding—high-tech, entertainment, tourism and retail—remain in private hands. In addition, “We have to pay the interest on the ever-growing debt used to make these payments or guarantees and loans.” This is getting little attention “because the Fed is doing it in secret, using provisions of its charter never before utilized, and avoiding discussion before the full Board of Governors for fear such meetings would be subject to the Freedom of Information Act.” Reich calls this Lemon Socialism because “Taxpayers support the lemons. Capitalism is reserved for the winners.”

How America Embraced Lemon Socialism (by Robert Reich, Talking Points Memo)


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