Wednesday, September 17, 2008
Last time I checked it was in socialist countries where the government took over private or public owned companies. No matter the reason, whether to rescue them or for nationalistic pride or whatever you want to call it. Wasn't it just recently that Bolivia made a move to nationalize its oil and gas reserves?
The U.S. Government is now poised to "own" 80% of AIG at the low bargain price of 80 billion. I can't even picture how much money that would be if it was all piled up in $100.00 bills. I know it is only a 2 year loan however, if you have to bail me out and pay my mortgage off, how can you expect me to pay you back in two years?. AIG will not pay back and the U.S. will own a bunch of nicely appointed offices around the world until a "buyer" comes along to buy it from the government at a discount. That is precisely what happened in Mexico a few years ago when the government "nationalized" and took over failing companies because of the recession in the late 80's then it sold all those companies to well connected friends within the presidency.
The argument is the same as with the rescue of Fannie and Freddie
. If the government sits and just watches without doing anything about the mess, the entire world financial system will collapse because of how inter-related everything is.
I am sure that there is a lot of true to that and maybe I am just thinking small potatoes and fail to see the "bigger picture".
Who are we helping and rescuing here? Is it the institutions themselves or a bunch of highly placed investors with lots to lose.
Why not bail out our health care system instead and put that 80 billion dollars to better use?..
maybe we might just lead a new revival of true socialism.