Bush Moves Towards Nationalizing the Insurance Business

Discussion in 'Politics' started by JustChristian, Sep 16, 2008.

  1. JustChristian

    JustChristian
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    Fed takes over AIG - $85B loan

    Federal officials will take 80% stake in the nation's largest insurer in an $85 billion rescue plan to prevent financial chaos worldwide.
    By Tami Luhby, CNNMoney.com senior writer

    Last Updated: September 16, 2008: 9:16 PM EDT
    NEW YORK (CNNMoney.com) -- In a stunning turn, the Federal Reserve Board is taking over crumbling insurer American International Group in an $85 billion rescue plan, officials announced Tuesday evening.
    The Fed authorized the Federal Reserve Bank of New York to lend AIG (AIG, Fortune 500) up to $85 billion. In return, the federal government will receive a 79.9% stake in the company.

    Officials decided they must act lest the nation's largest insurer file bankruptcy. Such a move would roil world markets since AIG (AIG, Fortune 500) has $1.1 trillion in assets and 74 million clients in 130 countries.

    http://money.cnn.com/2008/09/16/news/companies/AIG/index.htm?postversion=2008091621

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    And most here still cling to the notion that the U.S. is Democracy which believes in free market capitalism?

    None dare call it socialism.
     
  2. Dragoon68

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    How does "The Federal Reserve Board" become "President Bush"?
     
  3. Dragoon68

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    AIG Bailout

    To me this is another example of reward for mismanagement. Let 'em fail and let 'em learn from their mistakes. The survivors would be wiser and stronger. Perhaps making a quick buck might take second seat to making a safe buck. Bankruptcy provides an orderly want to deal with the inability of a company to pay its debts. what's wrong with using that process? A bailout - even a loan - with public funding is rapidly becoming an expectation at both the individual and corporate level. The message is not to worry if you mess up because the people will cover you. This is a socialist - not capitalist - concept isn't it?

    But then, maybe it has some merit because the government does enjoy the benefit of taxing the daylight out prosperity and tightly regulating what can, can not, and must be done. The financial business has certainly been strapped with that.
     
  4. Bible-boy

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    This is why we need to elect Senators and Congressmen that will enact legislation that will specifically outlaw the federal government from getting involved in private business. I don't recall where the Constitution gives the fed such power. However, since the fed has already done this kind of thing in the past we need for Congress to pass a law forbidding it now and in the future. We, the American people, can not keep backing every mismanaged business that goes belly up.:BangHead:
     
  5. JustChristian

    JustChristian
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    With the Federal government putting out $85B the Dept. of the Treasury had to agree with this decision. They are controlled by the President.



    A Treasury spokeswoman referred MarketWatch to comments made Monday by Treasury Secretary Henry Paulson.

    "Nothing is more important right now than the stability of our capital markets," he said during a news conference after the bankruptcy of Lehman Brothers (LEH. "We're very vigilant, but we do not take, and I don't take, lightly, ever putting the taxpayer on the line to support an institution."


    http://www.marketwatch.com/news/story/aig-gets-fed-rescue-form/story.aspx?guid={E84A4797-3EA6-40B1-9DB5-F07B5A7F5BC2}&print=true&dist=printMidSection
     
  6. JustChristian

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    The President made the call through the Sec. of the Treasury. Congress had nothing to do with it. This is purely another terrible consequence of the Bush Presidency. How can anyone invest in out markets when they are manipulated by the government? We no longer have a free market system.
     
  7. LeBuick

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    It's the way history will record it. Unfortunately he gets blame for the good and the bad.
     
  8. YOUTUBECANBESAVED

    YOUTUBECANBESAVED
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    Agreed

    This is Presidential territory, part of his legacy, capitalism took a hit a big hit, but under Bush it may do more with cronyism and protecting the special interests in the big insurance industry.
     
  9. Dragoon68

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    ... and so does Congress making it much more than just a President Bush decision.
     
  10. LeBuick

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    I'm glad to see the Bush administration step up. I know he's on his way out but he's still the president. When I heard McCain calling for a commission I thought he was overstepping a candidates place. By the time he takes over in January (if he wins) the crises should be figured out.

    This is a tricky subject, I'm in favor of less regulation but I also don't want to see another stock market crash like during the great depression. This seems like a narrow line.
     
  11. JustChristian

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    The problem is now that Bush has made this extraordinary move that is inconsistent with America's values it only made things worse as far as the stock market goes.
     
  12. poncho

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    Hope there's enough money left over to open a couple more fronts in the war on terror. Blackwater is depending on it.
     
  13. JustChristian

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    Now people are getting $0.97 on the dollar and having to wait a week to get their money out of MONEY MARKET ACCOUNTS. Money is pouring into gold, with the largest rise today in history, and the 3 month T-bill, which is paying NOTHING (0.02%). The economy under the worst president in history is just going greaT ISN'T IT?
     
  14. Dragoon68

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    These two "corporations" started out as a government agency under Roosevelt's New Deal like so many of today's big government ideas that have ended up being a big burden on those who have to pay the bills.

    People still have it their head that it's government that is responsible to provide cheap loans, high rate of return on investments, no-risk business ventures, cradle to grave education, medical and cosmetic care, property insurance, free transportation, cheap food, cheap gas, cheap homes, high paying jobs, personal protective services, etc. and ... where there's a demand there soon follows a supply.
     
  15. Bible-boy

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    What part of what I said did you not understand? My point is that if we had a law that forbids the federal government from doing this sort of thing no President or any Secretary of the Treasury etc. would be able to do this ever again. Although I don't know where the U.S. Constitution gives the federal government the power to do such things in the first place.
     
  16. Bible-boy

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    Yep, let's all blame Bush for the mismanagement and book-cooking of these businesses...:tonofbricks:
     
  17. Baptist in Richmond

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    Do you realize the shock wave that will go through the global markets if AIG is simply allowed to fail? How many people will find that their annuities are now worthless because the company went bankrupt? What about all the people who hold common and preferred stock, either directly or in their pension plans, mutual funds, or 401k's? What about the bond holders? What about the commercial paper that is purchased by other institutions? All of this could snowball, ultimately destroying the dollar in the world currency markets.

    I am watching CNBC, and one of the guests has the chutzpah to suggest that we need LESS regulation. Are you kidding me? This has the potential to turn into a crisis, and someone is suggesting that we need LESS regulation? Is it any wonder I am a Keynesian?

    Looks like we are finding out that Glass-Steagall was enacted for a reason. It's too late now.

    BTW, as I am typing this, the Asian markets are going lower. I would love to think that this is disintermediation, and that this money is coming into the US markets to snap up what could be perceived as bargain prices. If not, we are headed for trouble.

    Regards, hope all is well,
    BiR
     
  18. Baptist in Richmond

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    No, but we can most certainly blame him for implementing a culture of laissez-faire governance, thus enabling those responsible for the "mismanagement and book-cooking of these businesses."
     
  19. JustChristian

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    OK. Your party has been in control for the last 8 years. What did they do about it. The point came up that in 2003 Bush even brought the topic of reforming regulation of the financial business up but nothing happened. The republicans had control of all three branches of government at that time. What's the excuse. Can you understand that or do I need to simplify thne argument for you?
     
  20. Dragoon68

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    Such a "shock wave" could be a good thing in the long term. It might make people more careful about their investments. But, yes, it would hurt. Why should the government step in to take care of failed private investments made freely and with known risk? The money to fund it is going to come right out of our pockets with big handling fees. It's not going to be free!
     

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