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Hello guys!Can you help me to understand 3 words please.I want to have their definitions simples. Those 3 words are:- bail out- crony capitalism- capital Hill.Thx a lot!!

Clive · Accepted Answer

Hi,
It would be easier to explain these phrases if you gave a context, but here is the general idea.

bail out - help someone outof a difficulty

crony capitalism - not a standard expression that I am familiar with, but it sounds like business people helping other business people who are their pals

capital Hill - a misprint for the phrase 'Capitol Hill', which is the location of the US congress and other important parts of the US government.

I think you have been reading about the US government's attempts to deal with the current economic crisis in its capitalist system.

Best wishes, Clive

Geisha · Answer

Hello Clive,

at first, I think you for your answer.

Then, it's true, I saw those words in a newspaper article, the Financial Times, entitled 'Differences emerge between McCain and Obama', by Edward Luce :

Until now the Obama and McCain presidential campaigns have maintained low-key stances on the crisis at Fannie Mae and Freddie Mac, except to issue broadly supportive statements of the administration's handling of the bail-out.

But important differences are starting to emerge. Jason Furman, economic policy director to the Democratic candidate, yesterday said a Barack Obama administration would privatise those elements of Fannie and Freddie that could be better -carried out by the -private sector, while retaining a smaller government-charter institution supporting low-income, affordable housing.

The McCain campaign has said it would privatise both institutions after they had been restructured and the credit markets had stabilised.

"McCain has been out there with a hasty 'privatise and shrink' approach," Mr Furman told the Financial Times. "It has been ideologically driven and not sufficiently mindful of some of the public functions that Fannie and Freddie currently perform. The trick is how to disentangle their private and public functions and how to manage the complex task of the transition."

Douglas Holtz-Eakin, John McCain's senior economic adviser, linked the Republican nominee's plan to privatise both institutions with the broader campaign theme of reforming Washington.

"The financial problems at these institutions are a legacy of crony capitalism, the absence of transparency and accountability, and the implied backing of the taxpayer," he said in a statement.

"Senator McCain will get real regulation that limits their ability to borrow, shrinks their size until they are no longer a threat to our economy, and privatises and eliminates their links to the government."

Economists say that although the two campaigns have distinct political approaches, they continue to be light on detail. The Obama campaign has been specific about which guiding principles it would apply to the disentanglement of the two institutions. But it has yet to offer detail about what functions the shrunken government-chartered Fannie and Freddie would be permitted to carry out.

"Senator Obama has the right principles but it would be a real challenge [to see how he would] implement them," said Douglas Elmendorf, head of the Hamilton Project at the Brookings Institution.

"With Senator McCain, it makes sense to make these institutions smaller but that, in itself, is not a strategy for dealing with the broader problem."

However, Mr Obama's position is increasingly different from many of his Democratic colleagues on Capitol Hill, including Barney Frank, the influential chairman of the House financial services committee, who has yet to endorse privatising elements of Fannie and Freddie.

"Many Democrats believe we can simply go back to the status quo ante which is not realistic," said one economist.

"The Obama campaign has at least recognised that a portion of the two institutions should be sold off."

However, given the level of complexity and the inability to reduce the crisis to a simple bumper sticker, few expect greater detail from either campaign in the near future.

Cheers,
Geisha

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