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American Capitalism Is Dead. The Culprit? America

By Clay Dillow,  Newser Staff
Posted Oct 10, 2008 10:35 AM CDT
Paris' benchmark CAC-40 index has dropped 8 percent in early trading Friday, at 3,168.42 about 15 minutes after the opening of trading, a level last reached in Aug. 2003.    (AP Photo/Thibault Camus)
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(Newser) – As Wall Street banks collapse like a house of cards, American capitalism isn’t just failing in practice; the very idea of unregulated, free-functioning markets has received a serious blow, writes Anthony Faiola in the Washington Post. Once the symbols of American economic might, there's a real possibility that many US banks may find themselves partially government-owned as part of the bailout, altering America’s influence in pushing laissez-faire policies in controlled economies worldwide.

Through the takeovers of Fannie and Freddie and the rescue of AIG, the government is now a mortgage lender and insurance provider to millions, prompting economists to question whether ours remains a free market. Meanwhile, developing nations exercising heavier government economic control are poised to weather the crisis better than the deregulated West, and that likely won’t change anytime soon.
(Read more capitalism stories.)