George Bush has done something that no true conservative would ever dream of doing. By using federal resources to buy up the bad debts of Fannie Mae and Freddie Mac, the leading mortgage firm in the US, Bush and his Treasury Secretary have in effect nationalised the company, a policy that runs counter to the basic principles of fiscal conservatism. Yesterday that bailout was further extended with the 85 billion $ bailout of Lehman Brothers. Henry Paulson has set a very bad precedent and the US taxpayer will have to bear the additional burden of paying up front for the errors of judgement and speculative investment. It is unlikely that the moral hazard of taking on the bad debts of private corporations and turning them in non performing assests of the Nation at large will remain hidden for long. The unprecedented bailout has resulted in a run in Wall Street and the US stocks all over the world have plunged very sharply. At a time when the middleclass American home owner is seeing foreclosure of his home mortgage it is highly undesireable that private comapnies are shielded from the inevitable meltdown due to bad management and faulty corporate policies.

Should the Govvernment be in the business of bailing out corporations who have incurred huge losses due to bad business decisions. The falling interest rate and the inability of the Feds to shore up the dollar adds up to a veru y grim economic scenario. Ben Bernanke, the Chairman of the Federal Reserve has promised a comprehensive approach to the problem. We are not sure whether the asprin which is being administered in the form of bailout packages will really help to kick start the US economy. Lehman Brothers has lost 90% of its assets and market value and the ripple effects will be felt right down the the economy. When small business go bust will George Bush and his Treasury Secretary be at hand to provide relief. Obviously Not.

The international effects of this meltdown are too alarming even to imagine, The meltdown of the East Asian economies in 1996/ 97 was bad enough and the region pulled itself out of the recession due to the strength of the US and |Japanese economy. The present crisis is turning all Classical Macro Economic theories on its head and it seems we are back to the Keynesian model.

It is time the US public realised that the Bush and Cheeny duo have virtually mismanaged the economy as they have done the war on terror.