Bailouts only prolong the pain

To the editor:

It is important to note that the financial meltdown on Wall Street was precipitated by politicians who received a great deal of money from federal-fund (Fannie Mae and Freddie Mac) lobbyists. They also received sweetheart deals on real estate loans (Chris Dodd and Countrywide Financial) and slush funds created to support a host of political aims. In fact, the top four congressmen to have received these contributions are Dodd, Barack Obama, John Kerry and Hillary Clinton.

May attempts were made since 2001 to reform the federal funds market, some led by President Bush and some by John McCain. Opponents like Barney Frank stated categorically that there were no problems with these companies and pushed to expand their size and scope.

Some are trying to tie the Clinton repeal of the Glass-Steagall Act and the Gramm-Leach-Bliley Act to the meltdown in the financial markets. This is simply not true. In fact, the change allowed the merger of banks and investment companies, which helped Bank of America to acquire Merrill Lynch, thus reducing the size of the taxpayer-funded bailout.

The idea of bailouts for these companies is appealing to some. Unfortunately, history proves that such bailouts only prolong the pain by propping up prices and practices that should not exist. Someone has suggested that if such a bailout happens, perhaps the taxpayers themselves should get the benefit of the largesse. At the very least this idea has a certain symmetry.

NANCY BLISS, Cape Girardeau