March 20, 2008 (LPAC)--Even former Federal Reserve chairman Paul Volcker is not pleased with the bailout of Bear Stearns. Volcker is quoted by an L.A. Times blogger today as saying that the Federal Reserve bailout of bankrupt investment bank Bear Stearns is a ``new departure,'' and he questions the Fed's action. Among the questions posed in the L.A. blog are: Why is the Fed rescuing a non-bank that it does not regulate? Isn't that a job for Congress? Why is the Fed guaranteeing bad loans?

On March 18, Volcker dedicated a long interview on The Charlie Rose show, to raising questions that nobody else, except Lyndon LaRouche has mentioned. Earlier in the day of March 18, LaRouche had issued a statement condemning the Fed bailout as illegal.

What Volcker said on Charlie Rose is the following: ``The Federal Reserve has not, in the past, been conceived as a place where you put in bad assets, possibly bad assets. Lending institutions take risks. I'm not suggesting the assets are terrible, but they have collateral.

``But that is a new departure. And at some point, the government ought to, in my view, the government ought to be taking responsibility for that kind of action, not the Federal Reserve, which is an independent agency designed to provide an ample supply of liquidity to the economy but not too much, protect against inflation, not to protect particular sectors of the economy from bad loans.

``Rose: So the Federal Reserve should not be doing that, in your judgment. It's not because it shouldn't be done, it's the role of the federal government.

``Volcker: Absolutely. In this situation, they stepped in and nobody else was there to do it. They stepped into a vacuum, and I think quite appropriately, it's a judgment they had to make. But is this what you want for the longstanding regulatory support system? My answer is no.''