The Day the U.S. Economy Changed

Make no mistake: today's announcement that the U.S. Treasury will invest $250 billion of taxpayer money in private American banks marks a pivot point in how the U.S. economy thinks of itself.

Nothing this radical in government-sponsored financial engineering has occurred on such a widespread, systematic scope since FDR's alphabet-soup of make-work programs -- the WPA, the CCC, the TVA -- meant to save the U.S. economy during the Great Depression.

"The government's role will be limited and temporary," President Bush said in morning remarks at the White House. "These measures are not intended to take over the free market, but to preserve it."

Treasury Secretary Hank Paulson, former chief executive of Goldman Sachs, one of the pillars of U.S. capitalism, said he finds several elements of today's bank rescue plan "objectionable."

The U.S.'s most recent stab at nationalization: For a few months in 1952, President Harry S. Truman nationalized the steel industry on the eve of a strike. A few months later, the Supreme Court ruled against Truman's action and return the mills to their owners.

The U.S. has never been a pure-play laissez-faire economy. It is a regulated market. But today, it changes to something else -- a partially nationalized one. The question is: Is today's move, as Bush said, a temporary one? Or is it the first step in a march away from the sort of capitalism that defined 20th century America?

-- Frank Ahrens

October 14, 2008; 9:28 AM ET  | Category:  business
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A friend of a friend says that since taxpayers footed the bill for all those fancy stadia and ballparks we all get free tickets to the games for life. The beers and nacho's will be given away now. Anybody can sit in the luxury boxes, first come first serve. Free Wizard tickets and drinks for the guys. All Fannie customers will be treated to unlimited Cracker Jacks and instead of a toy inside the box, there will be a fifty dollar bill. It a whole new era, so nationalize the Post because the government is going to open filling stations in cooperation with Hugo Chavez. We are now living in Venezuela and South America is North America. I kind of like capitalism and the old way even if I was broke, I was free and so was the press. I guess this new money in the bad bank scheme will kill the good banks so Washington can save us more dough. Bush banking 101: We need to lose more money to make more money. I guess we can just rent stocks instead of buying them. Maybe you can sell your kids on Ebay or rent them for day labor. I expect nationalized work camps next. You will have a number tatooed on your arm or a chip or something with total informational awareness to save the computer software industry.

Posted by: Beau James | October 14, 2008 9:56 AM

Let's see if I understand W's logic: we have to kill capitalism in order to save it. YES!! HE IS CONSISTENT, after all, we are killing Iraqis and Afghanis in order to save them, too!

Posted by: John | October 14, 2008 10:04 AM

I hear a siren. Some trouble I guess. keep working and protect your kids. The home invasions are starting out this way. Capitalism ensures safety and socialism ensure bad milk and death by oil. We could be like China, but I don't think we want that. The U.S. Navy is still solid and capitalism is bring oil down. The socialist price fixing scheme failed and now they are in a panic. Customer is king and In God We Trust. That's capitalism. Save the bad banks? That's stupidism. Keep the presses rolling.

Posted by: Beau James | October 14, 2008 10:05 AM

Your vote isn't worth the paper it's not on and your stock isn't worth the paper they didn't print it on. Buy newspaper stock. Stock up on ink too and get a new outfit.

Posted by: Beau James | October 14, 2008 10:08 AM

Trump likes it. Quote of the day. "The biggest industry in the world is the housing market … and boy did we take a hit," Trump said.

He went broke before and came back. Maybe there is a reality TV deal in the works that we don't know about. The old reality says that Fannie and Freddie should of been fired long ago. The big execs there got their millions out of the bad deals Washington got a ballpark, so there's hardball to be played. For guys like me it's just another bust and for them it's a hit. It is looking like the busts will lead to more busts as the bad guys keep schemes going, somebody has to think about security and the future. We are looking at bad mortgages being propped up by bad banks being propped up by what they are saying is unlimited money. Truth be told, money has limits and it looks like the game is to prop up corpses on the field and see who hits what. See what the pro sports agents are saying. They seem to have a pretty good handle on the big money and things big money. I guess if the Post collapses into a financial ruin, you can all go to the game and cheer on the team. It's looking like put me in coach time and you get your tickets punched then the lights go out. Boom boom, out go the lights, it's a total bust. O50 and TNT troubles never end. You just can't help some people as much as you try. Try something else. You'll have plenty of extra time. We're never sure about extra inning, just the outings. It's get sporty and should get sportier. The crime knows no limits and it's looking like the crime rate will go up and that means hire more reporters to cover the crime. The white collar crime blew up Wall Street and it's another bust. Give them more money and the police are more busy than ever. The FBI can barely keep up with the fraud. They almost had it licked until SAIC built a system that failed and was paid well to do a bad job slow. You wonder how some of these guys stay in business. Now we have less national security and money in failed banks. I guess we should thank God for the military. We're pre-programmed to vote against that so welcome to Obamanation. I guess he's going to fix it all up with the new new Chicago plan. It should be interesting to watch the rest of the movie. The country has been scripted to fail and Hollywood is making a mint off of the failure. California needs $7 billion to keep operating, so it's looking like more terminations will result. I'll be back. Pass the popcorn.

Posted by: Beau James | October 14, 2008 11:33 AM

Posted by: benq11 | October 14, 2008 12:43 PM

It looks bad here and getting worse. The destroy America Hollywood act is turning into school violence. Kalifornia is hard pressed. The rats have finally pushed things too far. Looked at Post numbers today and they looked bad and getting worse. You are facing mission impossible and we have larger problems still. The economy here is still the same. Not good not bad. Enjoy it while it lasts. It's time to make other plans. Bye Post

Posted by: Night Mayor | October 14, 2008 11:35 PM

It didn't change here. We're not all buying. Try printing unlimited newspapers and see how long that lasts. You got your bailout and you might need a bailout as your numbers go to zero. The more papers you print the faster you can get there. See what I mean now? If you speed up the presses you get the bailfast.

Posted by: Night Mayor | October 15, 2008 3:26 AM

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