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Interesting move

September 20, 2007

Re "Fed slashes key rate to stir lenders," Sept. 19

Who said there will never be socialism in the U.S.? With a wave of his baton, Ben S. Bernanke, the head of the Federal Reserve, introduced it on Tuesday by reducing interest rates. Of course, it is not socialism for the poor, aged or infirm. It is socialism for the super-wealthy, the members of hedge funds who must put up $5 million to join. They then speculate with the assurance of Bernanke that they will not suffer financial losses whatever the Dow Jones industrial average may be. By U.S. law, they pay only a 15% maximum in taxes, unlike those who cannot afford the $5-million entrance fee. And the reason for this more-than-60% reduction in the normal income tax rate that does not apply to us working slobs is: Hedge funds take great risks. Chutzpah seems to be too weak a word for what transpired Tuesday.

Kenneth Barkin

Professor of history

UC Riverside

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Because the only reaction to the Federal Reserve's rate cut was a soaring stock market, it is safe to say that Chairman Bernanke reacted with "irrational exuberance" to trumpet the dawn of the Bernanke era and to end that of his predecessor, who coined the phrase.

Jack Yaghoubian

Toluca Lake

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