Fearing a financial crisis worldwide, the Federal Reserve reversed course on Tuesday and agreed to an $85 billion bailout that would give the government control of the troubled insurance giant American International Group.
There was a lot of hand wringing that the Fannie and Freddie takeovers were communist, but my perspective is that there is no point in complaining about it when the crisis is actually happening. If you were opposed to that you should have been fighting the guarantees years ago.
This, however, is communist. The U.S. Government now owns an insurance company. AIG was not built with the moral hazards that F&F represent. The tax payer ended up eating this because the finance industry refused, and the systemic financial cataclysm that a failure would have set off would have hurt people like you and me a hell of a lot more than it would have hurt the people who own the big banks.
So, if we're going commie, I say why go half way. Never has the idea of progressive taxation seemed more just. Its not my fault. Its your fault. I ain't paying for it and I support taxing the crap out of your golden parachutes in order to cover it. Don't forget that the taxpayers have a monopoly on the use of force.
At least, until the spectacularly risky bet the Feds made yesterday by allowing banks to invest depositor's money in the stock market comes home to roost and the whole fucking system collapses.
Fed’s $85 Billion Loan Rescues Insurer - NYTimes.com