John Fund's paradox: WSJ columnist opposes both bailouts and not bailouts
Blog ››› ››› JEREMY HOLDEN
Wall Street Journal columnist John Fund lambasted Wall Street reform legislation for setting up a fund to pay for future bailouts -- an utter falsehood -- and for allowing the government to liquidate failing firms, which is the opposite of a bailout. Thus, in fewer than 40 words, Fund managed to expose right-wing attacks as completely hollow efforts to derail efforts to strengthen Wall Street regulation.
Appearing on Fox News, Fund claimed the bill "sets up a $50 billion fund for future bailouts." This is completely false and easily disproved. In fact, the bill, as currently written, establishes a $50 billion fund financed by large banks to pay for the orderly liquidation of failing firms - it essentially funds the exact opposite of a bailout. Which is a problem for Fund:
It's not just that it sets up a $50 billion fund for future bailouts, which can be renewed, but it also grants the federal government unprecedented power to come in and seize any financial institution it thinks is failing.
In other words, the problem with the bill is that it "sets up a $50 billion fund for future bailouts" (it doesn't) and that it allows the government to dissolve -- that is, not bail out -- failing firms.