Should government intrude in finances?

This rush to regulate also was apparent in the recent crackdown on the airlines, resulting in thousands of grounded flights for safety inspections as the government beefs up its enforcement of existing laws. There have been mounting proposals for tougher government rules to address climate change. High corporate salaries have come under attack on Capitol Hill, as have oil industry profits and rising food costs.

Advocates of more aggressive government action see it as a boon to ordinary Americans struggling in hard economic times. But those favoring a lighter federal touch worry that the pendulum will swing too far toward regulation, stifling economic growth and efficiency.

“There’s always that danger,” said Jack Kemp, former New York congressman, housing secretary in the first Bush administration and 1996 Republican vice presidential nominee. “We do have to be concerned about over regulation.”

But even the conservative Kemp, now an economic adviser to John McCain, has come down on the side of more federal involvement to help struggling homeowners. He argues for a plan _ being advanced by the GOP presidential candidate _ to help homeowners under water on their mortgages to restructure their loans. Lenders would have to write off part of the principal and, in exchange, the new loan would be backed by the federal government through the Federal Housing Administration. Designed to help 200,000 to 400,000 people, it is similar, if less ambitious, to plans supported by Democratic candidates Barack Obama and Hillary Clinton.

Ideology aside, “I want to keep people in their homes,” Kemp said in an interview.

Although President Bush a month ago urged Congress not to overreact to the housing crisis, he has since extended the Federal Housing Administration’s reach and empowered mortgage-finance giants Fannie Mae and Freddie Mac to make up to $200 billion more in loans. Treasury Secretary Henry Paulson, unveiled a “blueprint” to increase and consolidate regulation of the financial industry, giving more power to the Federal Reserve _ and possibly creating a new financial-regulation agency with broad reach.

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(AP) ‘ Investors have been worried that recent data indicate a slowing economy, which would cut into profit growth at some of the nation’s biggest companies. But, results so far have shown that earnings, for the most part, are meeting or beating expectations, and the major indexes all posted gains of more than 4 percent for the week.

Citigroup, the nation’s biggest bank, encouraged investors with results that didn’t contain any big surprises. The New York-based bank reported a loss of $5.1 billion during the first quarter because of poor bets on mortgages and leveraged loans, but the loss was half the $10 billion recorded for the preceding quarter.

Google helped boost investor sentiment, as well as the tech-heavy Nasdaq composite index, by reporting first-quarter earnings and revenue growth that handily topped analysts’ predictions.

The Dow Jones industrial average jumped 228.87, or 1.81 percent, to 12,849.36.