ECONOMY: U.S. Bows to Pressure, Will Buy Banks

By Adrianne Appel BOSTON, Oct 11 (IPS) - The George W. Bush administration announced Friday evening it would buy shares in troubled U.S. banks, a move that upstages its own rigid, free-market ideology, and answers calls for the action by European leaders. Until now, the U.S. has resisted taking the action even though doing so would be a prudent plan for stabilising financial institutions, said Thomas Palley, founder of Economics for Democratic and Open Societies. "What you are really seeing is how ideology can get in the way of good policy. Republicans have been averse to gaining an equity stake in the banks," Palley told IPS. U.S. Treasury Secretary Henry Paulson made the announcement following a meeting with the finance ministers of the G7 richest nations, who said "urgent and exceptional action" is needed. The governments... [read full story]