The Death of Democratic Capitalism? Will a state-directed economy really produce strong growth?
By Larry Kudlow
How far will the Obama administration move to assert regulatory control over key sectors of the economy? Are we moving away from democratic capitalism, and toward some sort of corporatist state-directed economy? That could be the biggest stock-market and economic-growth issue facing us today.
Stocks plunged almost 300 points on Monday over new fears of bank nationalization. On Tuesday, shares recovered about 100 points after Treasury man Tim Geithner testified that repayment of TARP loans would be okay in some cases. But Geithner added that the decision to let banks repay the federal government will largely depend on the credit needs of the broader economy.
So while some investors believe Tim Geithner backed away from the prospect of government-controlled banks, it¡¯s really not clear that he did so.