Steve G.

Federal Reserve taking over troubled insurance giant AIG

In Libertarian on September 16, 2008 at 8:34 pm

According to the New York Times, the Federal Reserve is close to a deal bailing out insurance giant AIG.  In exchange for an 80% stake in the company, the Fed will provide AIG with an $85 billion loan.

  1. I don’t think the Fed have a choice because the ramifications if they don’t intervene will be felt around the world. When the financial markets have settled down, there needs to be a period of reflection and if necessary, more regulation and oversight in the this sector.

  2. Even I can see that this isn’t good, man!

  3. I don’t think the Fed have a choice because the ramifications if they don’t intervene will be felt around the world. When the financial markets have settled down, there needs to be a period of reflection and if necessary, more regulation and oversight in the this sector.

    FAIL!

  4. When ENM, who has long said she doesn’t care about the Fed, does a Fed story…

    The illusion of the U.S. being anything other than a fascist dictatorship is over.

  5. AIG sponsors Manchester United’s jersey…

    Manchester United are evil…

    COME ON FULHAM!!! (who are sponsored by LG, makers of my 42 inch screen plasma tv!!!)

  6. Libertarians will not win friends and influence people by chortling that the financial sector should crash and wipe out the jobs and life savings of millions of people just so we can say “I told you so.” This should be a teaching opportunity to tell those who will listen: what went wrong, who was wrong, what economic philosophy was behind the mistakes, how things would be different under laissez faire capitalism, and what we need to do going forward to make sure it doesn’t happen again.

  7. Roscoe sounds about right, it’s alot better than the “fuck them” message towards the employees.
    Folks should be focusing on what went wrong in the first place, not running around yelling like crazy.

  8. Gatties – The team is now sponsored by the evil Federal Reserve. Not the team’s fault, though. It had no choice in the matter. It sold its sponsorship to a supposedly capitalist company.

  9. This is a shortterm fix. Since the money is coming from the Federal Reserve, not the Treasury, it is a check drawn on thin air. That will dump $85 billion into the money supply, producing inflation. Thus, it is a hidden tax on every consumer, and a regressive one at that. That won’t hurt AIG or its creditors, though, because they get the money first, before it gets watered down by the inflation. In addition, by avoiding bankruptcy, the inept AIG retains capital and assets that would have been sold off to stronger companies. This means a longterm weakening of the economy, slower growth, and slowed job creation. What should scare even the statists is that this will create a false sense of security, with investors taking nonsensical risks, on the assumption (rightly or wrongly) that government will protect them from the consequences. The buyout of AIG is a shortterm fix with longterm negative consequences.

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