By Renae Merle, Howard Schneider and Mary Jordan
Washington Post Staff Writers
Monday, September 29, 2008; 11:22 AM
Stocks took a steep dive around the world today as troubles in the European financial sector offset news that lawmakers had reached a hard-fought consensus on the $700 billion bailout legislation. The Federal Reserve responded by injecting hundreds of billions of dollars into the U.S. and world financial markets.
The Dow Jones industrial average was down nearly 300 points, or almost 3 percent, at one point, while the Nasdaq was off more than 4 percent and the broader Standard & Poor's 500-stock index had declined more than 3.3 percent. In Europe, markets were off anywhere from 3 to 4.5 percent.
By 10:30 a.m., the Dow was down 260 points.
With world credit markets still sluggish and threatening to drag down the broader economy, the Federal Reserve more than doubled, to $620 billion, the dollars available to nine other central banks -- in Europe, Australia, Canada and Japan -- to make short-term loans to banks and other financial institutions. It also tripled, to $225 billion, the amount available for short-term loans to U.S. financial firms.
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Unless my arithmetic fails me, 620 and 225 equals $845 billion our Fed doled out to the rest of the world to cover the tracks of American investment fraud. That, by any legal definition, makes them co-conspirators and may be the first time an actual government qualified itself as a RICO defendant.
Public opinion be damned, the money boys are to have their way with us and the Paulson-Goldman Sachs intervention goes on pretty much unheralded and below the public eye.
But then so much these days occurs below the public awareness and is announced to us--after the fact--like fascist proclamations. Where is Ambrose Bierce when we need him? Gone, pardner, long gone.
Different times--same old cards dealt under the table.(Wikipedia) The Union Pacific and Central Pacific railroad companies had received massive loans from the U.S. government to build the First Transcontinental Railroad—on gentle terms, but Collis P. Huntington persuaded a friendly member of Congress to introduce a bill excusing the companies from repaying the money, amounting to $130 million (nearly 3 billion dollars in 2007 money).
In January 1896 Hearst dispatched Bierce to Washington, D.C. to foil this attempt. The essence of the plot was secrecy; the railroads' advocates hoped to get the bill through Congress without any public notice or hearings. When the angered Huntington confronted Bierce on the steps of the Capitol and told Bierce to name his price, Bierce's answer ended up in newspapers nationwide: "My price is one hundred thirty million dollars. If, when you are ready to pay, I happen to be out of town, you may hand it over to my friend, the Treasurer of the United States". Bierce's coverage and diatribes on the subject aroused such public wrath that the bill was defeated.
* For more in-depth articles by Jim on Washington at Work, check out Opinion-Columns.com
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