Are Foreign Bailouts Good for the Economy?
Posted Jan 25, 08 11:30 AM CST in
Business
(Newser)
–
Wall Street firms, battered by the collapsing subprime market, shored by their bottom lines by selling ownership stakes to foreign governments. Although the investments represent a significant change in the US economy, they drew little public criticism and no government intervention. That reaction—or lack thereof—follows years of lobbying by overseas governments and large American financial firms, the Wall Street Journal reports.
Some $37 billion poured into the troubled firms, which include Citigroup and Merrill Lynch. Once anathema, foreign ownership has been welcomed. "What would the average American say if Citigroup is faced with the choice of 10,000 layoffs or more foreign investments?" asks Sen. Charles Schumer. Critics, however, worry the new “open door policy” may change the US economy forever.
Source:
Wall Street Journal
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