[ExI] AIG Bail out
sjatkins at mac.com
Fri Sep 19 05:49:41 UTC 2008
Max More wrote:
> The "people" do not own 80% of AIG. The federal government (which is
> NOT the people) *loaned* AIG $85 billion, to keep it going as new
> management sells off its businesses. You can say, loosely, that the
> government now *controls* AIG indirectly, but not that it owns it.
> Unless the transition is badly botched, only part of that $85 billion
> will be a cost to the taxpayers.
A question I wonder about is who really owns "the federal government".
> To add to my previous comment (barely post-waking-up): The knee-jerk
> finger pointing at markets at the problem is frustrating. Yes, it's
> entirely possible that problems can arise in financial markets through
> poor decision making and herd behavior. But such problems will usually
> reveal themselves before they grow as large as the recent Western
> financial problems. They only grow monstrous if the government won't
> allow the fuse to blow.
> The anti-market types blame markets without reservation, despite the
> fact that
> --the Federal Reserve, formed by the government, played a central role
> in the financial crisis with its insistence on keeping interests too
> low for too long.
Which is actually a private consortium of banking interests, not
necessarily ever all US, that dictates monetary terms to the government
and the people much of the time. Certainly not a free-market
institution though as it runs of central bank monopoly privilege.
> --Fannie Mae and Freddie Mac are government-formed institutions that
> were given a legally-enforced monopoly over "conforming loans."
> Political pressures have distorted the market by pushing money to
> borrowers who wouldn't otherwise have received them.
Yes. It was always assumed to be backed by the government / tax payer
and thus not necessarily so beholden to sound business practice.
> --By bailing out AIG but not Lehman, the government will create
> additional financial uncertainty.
Funny thing is that JP Morgan put $130 billion into Lehman *in some
form* after they filed bankruptcy and the Fed paid them back much of it
with Lehman to give them priority among creditors for the rest. Who
knows, maybe they laundered their own toxic waste this way. It came out
in bankruptcy proceedings that some such flow of major funds occurred.
> The economy will only grow more complex in the future. I find it
> disturbing how so many of us still run to Great God Government for
> top-down solutions to the intricacies of complex economic systems.
Maybe the people will finally notice that dear Uncle Sam is bare-ass
More information about the extropy-chat