will799

America Buys AIG

Some of the posters think this is a great day because the US government got a great deal. This is horrid political theory and horrid economics.

Naziism was a form of fascism. It came from merging government with business. When we merge business with government, is it not still fascism? (I did not say Naziism, which has added racial overtones.)

Second (and a reflection of the above). We have a AAA credit rating because it is expected that a government act in a governmental function, and that only. If the federal government becomes a giant mutual fund, will anyone give us an AAA rating? Even if we optimistically assume, as some posters do, that we got a great deal, what about our next portfolio addition? If Obama wins, do we invest in a Chicago ward heeler's liquor store? Or buy 79.9% of the Arizona Diamondbacks?

Third. This is not a bailout by the Fed and the US government. The whole derivatives trade arose because they were exempted from US government regulation. Why not let the people that paid private people to guard against other people's defaults lose, just as the bank would lose when my mom co-signed my car loan and both of us couldn't pay? They are sweeping a Frankenstein they have created under all of our doors while our back was turned. Note that there has been no hue and cry to regulate Credit Default Swaps.

Last, (and hardly least), a lot less damage could be done, and future follies insured against, by instead nationalizing the Federal Reserve. Of Course they are bailing out Wall Street. The Fed is a corporation federally chartered, but not federally owned. It is owned by the commercial and investment banks that bought its stock in 1913.. Bernanke is not as stupid as he looks. The reason he makes all those "mistakes" to bail out banks is because he, as the chairman of the bank's bank, has a fiduciary duty to act in thestockholder's best interests, not ours. The bank needs to be nationalized. It would not cost much either. See the Federal Reserve Note in your wallet? That means the Fed owes you a dollar. All we would have to do would be to make them pay the note by cancelling out all those treasuries they own. Most of the natinal debt would be liquidated. Any monies left for the bankers could be made subject to seizure to pay judgments on suits filed by us for damage to our businesses and lives by fraud. And if a conspiracy could be proven, we could seize the banks which own the Fed for their actions.

Don't be surprised if there are more bailouts. If their interests and ours diverge, when they screw us in favour of their stockholders it is their duty. So commend Bernanke for doing his duty, don't criticize him. Why would Greenspan, when we had the lowest interest rates in 40 years, tell us to go out and get an adjustable instead of a fixed rate mortgage? I suppose that was just another mistake.