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>Get It Right On GM Warranties, Obama, Will Ya’

>Men Make Such Bad Decisions When Under Duress

Now that the Barak Obama Administration owns General Motors and Chrysler — or at least with their naming of the board and a president it looks like they’re in control — or should I say totally out of control — what about ongoing losses and expenses?

GM and Chrysler are losing entities. Here are some of the continuing expenses Obama lifted from these two auto makers by inserting us taxpayers in their place.

1. Warranties — who will pay for all the warranty work that will need to be done to satisfy current new car owners, and owners of cars still under warranty that aren’t new?

2. What about other loans and outflow of funds that these giants have accumulated?
 I mean suppliers. They probably owe suppliers millions of dollars. Anyone bother to do an audit to determine the possible maximum outflow to be swollowed by the American taxpayer? NO!

3. How about pensions? That includes union and non-union workers and 401k programs. Most of them are written so that if the insurance carriers default, the company is on it for the full value of the pension. What about retirement money promised to officers and board members? They are valid contracts, even the gold and silver parachutes. 

These American auto makers likely still owe millions to people and companies all over the globe. Who will stand behind these guarantees? Who will pay these moneys? GM and Chrysler were not allowed to go into bankruptcy, remember, so they can’t stiff their creditors. Or can they? Maybe Congress will pass a law — unconstitutional, at least — that will allow Obama to bypass these creditors. He already bypassed Congress when he decided to start running these car companies.

When you do one illegal thing, it begats more illegalities, Barak. It was illegal for Hank Paulsen to lock GM and Chrysler in a room and tell them he wouldn’t let them out until they signed over their companies to the government and promised not to take their firms into regular bankruptcy. That was illegality number one.

Isn’t it interesting that Paulsen, Larry Summers (Obama’s chief financial advisor), and Timmothy Gaithner, treasury secretary, all were working together at CityBank before they were called into government service. Yet CityBank, no matter what crummy condition they were in, was one of the banks that was “too large to fail.” That’s because all three have their own personal 401k plans with City Bank. If it were allowed to fail it would result in a loss of millions of dollars of retirement funds for these three chosen ones. This evil man Hank Paulsen did this same trick to AIG and Bank of America. AIG was told it couldn’t take out bankruptcy, it had to take the money. They didn’t elaborate, however, on how the government would be running AIG henceforth.

As for Bank of America, I wrote a story in Angst Blogger yesterday that AIG would like to repay the $48 billion they got from the government, sometime soon. But the Obama people won’t let them pay it back. They’ve gotten used to the power and they don’t want to give it up, not just yet. Remember that Bank of America took over Countrywide Mortgage and CityBank as part of the deal to give them this money.  What a tangled mess we have. We the taxpayers also paid $180 billion to AIG and are running that company, too.  All of it was a mistake. All of them should have been allowed to take out bankruptcy. Some day someone will untangle all of this and find that the unholy troika of bad people, Gaithner, Pattersen, and Summers, should go to jail. Have your fun fellas, but sooner or later the bubble will burst and you’ll get caught. As I said, one bad mistake begats another, and another, and another.

It’s like running the stop sign where the cop is hiding. You see flashing red and blue lights in your rear view mirror and you decide to outrun the cop. A long, high-speed chase ensues with both cars going over 100 mph and other cop cars are called in. A barracade is set up, but the stop sign-runner blasts his way through that and goes down the road.

Two cop cars finally catch up and come alongside, banging their cars into his. One of the cop cars overturns and the driver is killed. The other pulls out a gun and tries to shoot the tires of the speeding perp car. But the perp’s passenger shoots back and kills the pursuing cop.

 Now the perp is wanted for murder in four states and is going out of his mind. See what I mean, when one thing goes bad it all goes bad? That’s number eight hundred seventy four on Murphey’s list of bad things to expect to happen when one thing goes wrong.This same driver now is going 120 mph to avert capture and suddenly his car goes off a cliff, killing him and his passenger. We make such terrible decisions under duress.

3. What about the other car manufacturers GM and Chrysler own? Who will manage them? I mean Volvo and Saturn for GM and how many others for Chrysler I’m not aware. By the way, whatever happened to that “forced marriage” of Chrysler and Fiat? Chrysler was given an ultimatum by the government, “take their
money or bankruptcy!”  That’s the only good piece of advice anyone has given.

My take: I believe we have gangsters running the government. The biggest three of late were Hank Paulsen, former treasury secretary; Ben Bernanke of the Fed, and the biggest of all, Timothy Geithner, current treasury secretary. How can they get away with strong arming these banks and car companies? Some of the leaders of GM and Chrysler — if they had an ounce of guts and money to pursue the government at this point — ought to band together and sue the government. If that doesn’t happen, there will be mahem on the streets because sooner or later the word will get out and people like me and you, the American taxpayer who is getting stuck for all of this baloney, just won’t stand it any longer.

>Americans Fed Up With Dumb Lawmakers Vote For Term Limits, Empty Congress

>

Geithner Vows to Recoup AIG Bonuses as Lawmakers Express Fury

It’s Not With AIG That Americans Are Fed Up — We’re Fed Up With Congress! Why Don’t Lawmakers Get It?

Americans arise! Let’s Get a Term Limits petition going and throw out the entire Congress!

THE STORY: March 18 — Treasury Secretary Timothy Geithner told congressional leaders the U.S. will recoup executive bonuses paid by American International Group Inc. as outraged lawmakers raced to take back such payments from all companies getting federal bailouts.
Geithner, who has come under fire from Congress over the AIG payments, said in a letter to lawmakers last night the government will recover the money by requiring it be repaid from company operations and deducting the amount from the next $30 billion in aid being provided to the insurer.

DON WHITE: In selectively reducing the AIG bailout by the amounts of the bonuses, the question arises: If the complete $170 billion was needed — as said by AIG and as approved by Congress (if you can believe Congress did their oversight job and due diligence) — then why would you want to slow the come-back of the economy by the amount of the bonuses? It makes no sense. We have heard reports that those who got the bonuses have already left AIG, so in essence the bonuses do no good for the future. We know all the brohaha over bonuses will make it harder for AIG to hire top people because any new guys won’t get the lavish bonuses, but AIG’s competition, CityBank and others, still give those kinds of bonuses. The best people, naturally, will gravitate to the most money, which isn’t AIG, now 80% owned by Uncle Sam.

THE STORY: The senior members of the Senate Finance Committee from both parties proposed taxes totaling 70 percent on bonuses at AIG and other companies getting federal money during the U.S. financial meltdown. House Speaker Nancy Pelosi directed committees there to draft several alternatives and said her chamber may consider a bill as early as this week. Other lawmakers introduced their own plans.

DON WHITE: All of this 70% tax effort is self-defeating. Who’s going to want to work for AIG in the future? Lawmakers who have this mentality are sealing the doom for AIG, the company we, the people, own. Shouldn’t we be making it easier for AIG to get the top people to compete with Bank of America and other financial firms which still give big bonuses and whose bonuses are not subject to this kind of balony pile-on tax treatment? Second, these lawmakers who actually think once in a while are stupid. They are dreaming up ways to help AIG fail, which is wrongheaded. Better that lawmakers don’t think at all than to dream up fantasies for the private enterprise system, about which they know absolutely nothing.

THE STORY: “Millions lost their jobs; it’s an outrage that the people who somewhat caused this problem are now paying themselves bonuses,” Senate Finance Chairman Max Baucus, a Montana Democrat, said yesterday in Washington. He and ranking Republican Chuck Grassley of Iowa also proposed limiting some forms of deferred compensation to $1 million at companies getting bailout funds.

DON WHITE: Better still, why don’t we, the people, limit our lawmakers? Wlhy don’t we shout to them: NO MORE BAILOUTS PERIOD! Americans are angry and upset with AIG, but they should be more upset with Congress. We should pass term limits — get a petition going and bypass Congress — and get rid of all members of Congress, Democrats and Republicans alike. They are all incompetent frauds and don’t deserve to be in Washington. The above about Max Baucus and Chuck Grassley is off center. We shouldn’t be writing bills that limit bonuses at all. More importantly, such talk seems to be setting the stage for further bailouts.

STOP THAT NOTION NOW! DOESN’T CONGRESS GET IT? AMERICA ISN’T FED UP WITH AIG IT’S FED UP WITH CONGRESS. This angst against AIG is all a smoke screen. Baucus and Grassley — and all Democrats and Republicans — are all wrong. BAILOUTS BE GONE is my mantra. NO MORE BAILOUTS, PERIOD! LET’S HAVE TERM LIMITS FOR CONGRESS! LET’S STOP THE STUPIDITY THAT STARTS WITH THE CURRENT CROP OF DEMOCRATS AND REPUBLICANS.

>Obama: Afraid of A Huge Populist Backlash Over Bailouts

>

Block Those AIG Bonuses, Even At Gunpoint, If Necessary


Washington – Now the Obama Administration is more afraid of conservative backlash over bank bailouts than it is over whether AIG remains viable. Now that America owns 80% of AIG, Obama and company doesn’t care if it succeeds or withers away.

I can imagine the Oval Office conversation between Treasury Secretary Gaithner and President Obama:

Obama: Something’s got to be done, Tim. AIG can’t give bonuses when we just bailed them out. It makes us look bad on the Sean Hanity “Let Freedom Ring” TV show.

Gaithner: There’s really nothing we can do, Mr. President. That is, short of taking over AIG. You know, like Hitler took over German businesses before World War II? You do remember that, don’t you?

Obama: Of course not, I wasn’t even born yet.

Gaithner: But what about Harvard…?

Obama: Harvard. What a joke. I worte a lot of commie junk — that’s why I told them not to release it, I wouldn’t have been elected — but I didn’t really write anything.

Gaithner: No?

Obama: No. I had all that Arab funding, you know. They hired a ghost writer for me. None of it was mine, except the ideas.

Gaithner: That I didn’t know.

Obama: But I’ve read Mein Kampf, you know, Hitler’s autobiography? And I looked up the term in WikiAnswers just this morning to remind me, so I’m on sound footing here to say there is a fine line between what Hitler did and what we’re going to do.


Gaithner: Oh, how so, Mr. President?

Obama: Well, to get in power Hitler had to kill a lot of people. We haven’t killed anyone — no political operatives or business CEOs — not yet.

Gaithner: But you wouldn’t rule it out, either, sir?

Obama: Off the record, Timothy my boy, I rule nothing out. That’s because we don’t have these conversations tape recorded like that stupid Nixon. You did have the Secret Service check your office and mine, like I ordered you, to be sure we’re not being taped and not knowing it?

Gaithner: Why? No, you must have me confused with Leon Panetta, remember? You chose him to head up the CIA.

Obama: Oh, yeah. Sure. Who did I appoint to head up the Secret Service.

Gaithner: No one.

Obama: What? But there have been these men in dark suits — telephone buttons in their ears, and plenty of guns and stuff like that — following me around. Who are they if not the Secret Service?”

Gaithner: Sure, you have them. I understand, Mr. President, they have 3,200 agents plus another three thousand backup people.

Obama: Wow! Really? Then how come only ten of them follow me around? What do the other 2,190 do, for crap’s sake?

Gaithner: Oh, sure. But remember — they also protect Clinton, Carter, the two Bushies and the wives. Plus they tail Biden sometimes to make sure he doesn’t give away state secrets in those dirty jokes he tells off mike, of course. There’s one of ours where the country would be better served if a hitman got him . . . I’m not serious, of course. But I mean, really, he’s so dense at times, I’ll bet he can’t even say your full name or spell his.

Obama: Even that dummy Sean Hanity can say my full name. Why can’t Biden? But I’ll agree, the country is in peril if an assasin gets me and not Biden.

Gaithner: Though, third in command is Nancy P. She appears sometimes as if they used a lazer dazzler near her brain.

Obama: A, uh, what?

Gaithner: Lazer dazzler. that’s the latest technology, or didn’t you know? The secret Service is worried about somebody assasinating you. You’ve already been the target of assassination plots. Didn’t you know?

Obama: Yeah, I knew. But I don’t get too excited about that.

Gatihner. You should. Anyway, I hear they’ve got some new technology — fill me in if you can — that’s called advanced directed-energy devices and it’s all very much classified.

Obama: If it’s classified, how did you find out?

Gaithner: Who, me? Oh, Mr. President, you don’t have to worry about me. Everyone knows. It was mentioned in a news story covering something or other — and documents from this recent court case indicate the Secret Service has the very latest technology, some kind of advanced energy-directed devices which is all on the QT.

Obama: Oh, I guess George Bush did mention that when he had me over, but I had forgotten.

Gaithner: Hey, I’m a voracious reader, Mr. President. If you hadn’t named me to the Treasury position I would have liked CIA. I watch old James Bond Movies until midnight sometimes. I remember reading about that Donald Friedman punk. You know, the guy claiming that government agencies are misusing non-lethal directed energy weapons — I mean Bush’s guys misused it.

Obama: This is stuff even our intelligence community doesn’t know about, because they’ve never clued me in.

Gaithner: What a shame. I mean, you are the president for C…sake, aren’t you?

Obama: Last time I looked. What about this Feldman?

Gaithner: Friedman. Some say he’s a phony crank. But his obsessive digging has turned up valuable information. For example, one of hisFreedom of Information Act (FOIA) requests unearthed a 1998 U.S. Army program looking at a microwave device to beam sound directly into the target’s skull which the rest of us had missed. (The same technology underlies the Medusa non-lethal weapon.)

Now he’s found something else. Friedman’s current court case involves attempts to extract information about any directed-energy weapons such as lasers and microwaves used by the Secret Service. Do they really have anything of the kind?

Obama: You’ve got me. . .

Gaithner: A “Motion for an Enlargement of Time” (in other words, a request for a few more weeks) by the Secret Service’s attorney indicates that they have something, and it’s pretty secret. Has to do with protecting very high government officials. I understand that in one case, the documents . . . could not be mailed but had to be hand carried interstate. This is a G-damned FOIA request regarding this sensitive DET research.


Obama: So what is this “sensitive” technology, Tim?

Gaithner: Your SS head should be telling you this, not me. Who is he, do you know yet.

Obama: No, it’s far down the line and no one’s said who I report to — or, uh, who reports to me.

Gaithner: Simply ask one of those goons who follow you around. They know. He signs their freakin’ pay checks. Those of us in the know, which obviously excludes you, Mr. President, seem to believe — because no one knows for sure — but we can speculate. Didn’t Bush say anything about these laser dazzlers? As a means of protecting the White House against suicide attacks by light aircraft?

Obama: No, that dullard probably didn’t know, so now now I don’t know about it.

Obama: It dates back to 1998. We don’t know if dazzlers have ever been deployed, but that would certainly explain some of the secrecy.
Portable dazzlers would also be a good way of dealing with potential snipers without the risk of harming bystanders. Other agencies also have an interest in covert dazzlers. Ex MI6 agent David Tomlinson claims a
laser strobe was proposed for an assassination attempt on Slobodan Milosevic in 1992 by dazzling his chauffeur at a crucial point and causing him to crash. Conspiracy theorists claim that a laser dazzler was used to assassinate Diana, Princess of Wales — but any bright flashes more likely came from photographer’s flashguns.

Obama: You certainly are a talkin’ tech machine on this, Tim.

Gaithner: I love this stuff. If I drop the ball on the economy, please, please fire me and Panetta or Gates, then make me head of the CIA or Defense. That’s my true love, not employment numbers, GDP figures, and charts.

Obama: Okay, that’s a deal. What else do you know?

Gaithner: A portable version of the truck-mounted Active Denial System — the Pentagon’s “pain ray” — might be used to similar effect. It could cause an assailant to flinch for a vital second, giving agents an opportunity to get the President out of the line of fire, without having to shoot into a crowd. Raytheon has been working on a rifle-sized version of the Active Denial System for some years, but nothing has been heard of it recently


Obama: Let’s get back to economics, can we? That is your job. I want you to pursue every single legal avenue to block bonuses to the AIG’s top executives.

>World Economy On Brink of Collapse

>by Don White

World leaders are suddenly realizing the global economy is sinking many times faster than expected.

Yesterday, the World Bank abandoned all attempts to sugar coat this crisis. In a shocking report, the global institution warned that the world economy will shrink for the first time since World War II and that industrial production will plunge a staggering 15% — a global depression reminiscent of the 1930s.

Last week Britian’s prime minister, Gordon Brown, came to their closest ally, America, and suggested politely that Obama may want to consider organizing some kind of global monetary attack to forestall the absolute collapse of nations financially.

I think this caught the president and his treasury secretary off guard. They haven’t the slightest idea — or resources– of how to “bailout” America, let alone the world. The Obama administration has been playing “catch up.” Every move they’ve made so far has failed because it’s either not enough or too late. At least, that’s the liberal view of things.

But conservatives believe he has gone way too far. Indeed, if it takes ten or fifty trillion dollars, that is way out of bounds, say anyone concerned with the welfare of our children and grandchildren who will have to foot the horrendous bills Obama and his secretary of treasury, Patrick Gaithner, have concocted to alleviate problems. So far, the only thing they have done is to make matters worse. What we have here is a gas fire. No amount of water will help. In fact it will make the fire spread and become more destructive.

Consider what’s going on in the major banks today and the news is all pessimistic across the globe:

* The Asian Development Bank reported that more than $50 trillion in invested wealth vanished into thin air last year.
* Superstar investor Warren Buffett warned on CNBC that the U.S. economy “has fallen off a cliff” … is “in a shambles” … and that we are experiencing “close to the worst-case scenario.”
* The feared “D” word has spread swiftly through the news media, as the reality of depression finally sinks in.

I believe the only way to corale this financial mess we’re in is to stop spreading the “fire” by spending money. We should have let the GMs, AIGs, Bear Sterns, City Banks, and any other insolvent company go under. It’s as if we’re at Yellowstone Park during a fire. There are conservationists, real smart scientists, who believe trying to put out a forest fire is not smart. Like forests, economies need “fires” to clean out the incompentent failing companies — companies that have not earned the right to exist. The problem with us is the Democrats have no stomach for putting more union employees on the bread lines.

At the same time, they have no conscience or qualms about letting Peter pay Paul — asking American taxpayers, many of whom make far less than their union brethren, to bailout car companies where union workers have huge benefits and salaries almost no other blue collar workers enjoy.

President Obama should sit down with John Key, New Zealand president. He says his country tried to spend it’s way out of a financial crisis a few years ago and it didn’t work. Nations who do this always fail, he says, citing the Great Depression and how Europe was able to overcome the world depression far faster than in the US where President Roosevelt used the same tactics Obama is trying. Why can’t we learn from the past. Those who fail to heed lessons of the past are destined to fail. Who said that?

>Can The Fed Bail Out An Insurance Company?

>Readers must distinguish the Fed, an instrument of government but technically not part of it, in regulating monetary policy. Distinguish the Fed from Hank Paulson who is President Bush’s Secretary of Treasury. Remember that the Secretary said the government would not bail out the world’s largest insurer, and it didn’t. It appears that was left to the Fed.

The interesting thing about what I call a huge mistake is this: When you consider who oversees American International Group (AIG) you go back to the State of New York’s Insurance Department. Something to understand about insurance companies–and I don’t care how big they are, whether they’re huge like State Farm Mutual and AIG or some little Podunk Mutual in Sorrysville, Alabama, in America they are regulated by state insurance departments. The irony is this: Despite the fact the Feds have no jurisdiction over AIG, they came in with federal funds to bail them out.

New York Governor David Paterson is happy to shuffle this big problem off on someone else and seems pleased the Fed is loaning AIG $85 billion.

Though Hank Paulson of the Treasury Department seems to be going along with it, I find this quite extraordinary and there is an awful lot of impropriety in this. Are we getting to the stage in the financial world that an agency of the Federal Government that is not part of the government must take regulation of insurance away from the states? If so, there’s a legal backlog of thousands of pages of record showing they have no business doing so. This is an old states rights issue and what has happened with this takeover is the precise thing we’re talking about–a takeover of regulation of one insurer. Because you can’t see the Fed just idly sitting there letting AIG do something that is not in keeping with “the Fed’s good judgment” now can you? This whole thing is a mess. It reeks of socialism at its worst.

The Fed has fired all of AIG’s management. Edward Liddy, the former head of insurer Allstate Corp (ALL, Fortune 500)., will lead the company, the Wall Street Journal reported.

Federal Reserve Board is lending as much as $85 billion to rescue crumbling insurer American International Group, officials announced Tuesday evening.

The Fed authorized the Federal Reserve Bank of New York to lend AIG (AIG, Fortune 500) the funds. In return, the federal government will receive a 79.9% stake in the company.

Officials decided they had to 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.

An eventual liquidation of the company is most likely, senior Fed officials said. But with the government loan, the company won’t have to go through a tumultuous fire sale.

Can you imagine the Federal Government, the new owner of AIG, now being regulated by the State of New York? But that’s precisely what has happened. Or has the Fed placed AIG in the same company as Social Security with all of its stumble-bum decisions? One difference, since the Fed did this, anything they do cannot and will not be subject to presidential or congressional oversight. Can a state legally oversee the Federal Government? With AIG, a best case can be made that the state is the only jurisdiction that has the power to do so.

Even a better question: We know AIG didn’t go under because of its superior insight and management ability. When we the people now own the giant insurer with liabilities estimated at more than $450 trillion, what happens to “we the people’s” pocketbooks if this stumbling giant continues to stumble under Federal Reserve Board oversight? AIG will continue to fail and must sell off assets to pay us back plus about 13% interest. But what if it doesn’t work the way Bernanke envisions?

Who then will bail out the taxpayers who will be called upon to come up with that $450 trillion–assuming, of course, all of AIG’s invested reserves also go curplunk? What we have been doing to less developed nations (LDN) for years and years is coming home to roost. Through companies like MAIN, and Halliburton many LDNs have mortgaged their souls to the devil in the name of U.S. imperialism and our effort to create international empires.

Ecuador is a good example of a poor nation developing oil wells, oil lines, and building power plants, roads and other infrastructure for which their leaders have sold their people into bondage. They can never live long enough to pay it back. Third world debt has grown to more than $2.5 trillion, and the cost of servicing it–over $375 billion per year as of 2004. It’s more than all third world spending on health and education and more than twenty times what developing countries receive annually in foreign aid. Over half the people in the world survive on less than two dollars per day, which is roughly the same amount they received in the early 1970s. Meanwhile, the top 1 percent of third world households accounts for 70 to 90 percent of all private financial wealth and real estate ownership in their country; the actual percentage depends on their country (James S. Henry, “Where The Money Went,” Across The Board, March/April 2004, pp42-45. For more information, see henry’s book: The Blood Blood Bankers: Tales from the Global Underground Economy (New York: Four Walls Eight Windows, 2003).

The reason I mention third world countries is because they don’t have money and have become indebted up to their ears. We Americans are quickly following in that pathway. Our country is broke and our leaders don’t know it. If they do they’re not telling. Isn’t it about time we elected a president and Congress with conservative values?

To my question about who will bail out us taxpayers, the answer is no one. We’re the pocketbook of last resort. Maybe we could call up King Abdullah bin Abdul Aziz Al Saud. He could help, but would want the State of New York in exchange. Or, maybe Hank Paulson can help. He knows a lot of people in China because he was a good Boy Scout; he could talk to Chinese President Hu Jintao. Maybe good old Hu could bail us out. But he would want the State of California.

Good, give them California and New York. Let Hu deal with the Spanish immigrant problem. Good, give them New York. Let King Abdullah deal with the Democrats and the Jews in New York.

In my view, the Feds have no business throwing around taxpayer money to salvage an insurance company. That’s state business. Maybe we would end up there, but where’s the good-sense protocol? If you’re Bernanke you naturally would have had lunch with New York Governor David Paterson and NY insurance commissioner Eric A. Dinallo and ironed out an agreement beforehand. And maybe they did. Everyone should have been placed on the same page here, especially the financeers of this grandiose deal, the American taxpayer. We know it’s our money, but we weren’t even consulted.

There will be a lot of political backlash on this Fed move. John McCain was right–we should let AIG fail, and that’s pretty much what the Bush Administration decided to do rather than expose our national assets on a private enterprise like this. Of course, Obama was silent. He doesn’t even know to this day and hour what he would have done because he’s an “empty suit”–a deadhead.

A lot of national leaders must have quizzical looks on their faces this morning. Commerce Committee Chairman Daniel K. Inouye (D-Hawaii) should call for hearings and start questioning the likes of Greenspan and Bernanke. Ask them how they feel this is all going to fall out? At the least, Bernanke has overstepped the bounds of his authority.

And at most, he has done something that should have called for pre-counseling from others, including the Treasury and the President. How does Bernanke even know the U.S. Treasury has enough money in the bank to pay for this kind of socialistic maneuvering? If we’re halfway broke, who delegated him to completely break the bank?

When we look into what has turned out to become–The grand AIG fiasco–we’ll find the U.S. is on the ropes with money. In fact the U.S. is broke and our elected officials haven’t yet awakened to that fact.

It is quite disheartening to see the Fed use taxpayer money this massively when they have no accountability. Blog onto this story. Do you believe the Fed should be so powerful, first off; second, doesn’t it seem weird and wrong for a private group like the Fed to be able to tap into your pocketbook and mine whenever they please?

My position is that this is very wrong. In this case, the Fed has stepped way beyond their previously-given mandate. Maybe Congress should look into what the Fed can or cannot do and change something here. Next, they’ll be selling the Capital buildings and the White House.

Or maybe not. Can you imagine how badly the Fed would perform–not to say that Alan Greenspan and Ben Bernanke have been angels and highly competent--if we had a political hack making these decisions? Who is to say Bernanke is not beholden to somebody–perhaps many of AIG’s biggest stockholders? If anyone has information on that, sound off, please.

The following fits in nicely with this from Slate:
In for a Pound

By Daniel Politi
Posted Wednesday, Sept. 17, 2008, at 6:42 AM ET

News keeps pouring out of Wall Street and all the papers lead with the Federal Reserve‘s startling decision to lend insurance giant American International Group up to $85 billion in a bailout deal that would give the government control over the company.

The New York Times calls it “the most radical intervention in private business in the central bank’s history.” In exchange for its cash, the government would get a 79.9 percent equity stake in the company. The Washington Post notes that the rescue package “effectively nationalizes one of the central institutions in the crisis that has swept through markets this month.” The Wall Street Journal points out that this is “a historic development, particularly considering that AIG isn’t directly regulated by the federal government.”

The move marked an astounding about-face for the government that had been resisting AIG’s pleas for help over the last few days and earlier chose to let Lehman Bros. fail rather than put forward more taxpayer money. “The main difference between the two situations: AIG is so huge and its operations so intertwined in the financial system that the Fed feared an AIG failure could harm the broader economy,” USA Today summarizes. Or as the WSJ puts it: “This time, the government decided AIG truly was too big to fail.” The Los Angeles Times notes that while Fed officials said the action was due to the fact that AIG insures the assets of millions of Americans, it seems the main reason “was fear that the company’s failure could weaken or destroy nearly a half-trillion dollars’ worth of financial protection that AIG provides Wall Street firms and the biggest companies of Europe and Asia.”

To continue reading, click here.

Daniel Politi writes “Today’s Papers” for Slate. He can be reached at todayspapers@slate.com.

>The AIG Insurance Bailout–What A Surprise

>Readers must distinguish the Fed, which is an instrument of the government but technically not part of the government in regulating monetary policy. Distinguish the Fed from Hank Paulson who is President Bush’s Secretary of Treasury. Remember that the Secretary said the government would not bail out the world’s largest insurer, and it didn’t. It appears that was left to the Fed.

The interesting thing about it is this: When you consider who oversees AIG you go back to the State of New York’s Insurance Department. Something to understand about insurance companies–and I don’t care how big they are, whether they’re State Farm Mutual and AIG or some Podunk Mutual in Sorrysville, Alabama, in America they are regulated by state insurance departments. The irony is that despite the fact the Feds have no jurrisdiction over AIG, that they would come in with federal funds to bail them out.

I find this quite extraordinary and there is an awful lot of impropriety in this. Are we getting to the stage in the financial world that the Federal Government must take regulation of insurance away from the states? If so, there’s a legal backlog of thousands of pages of record showing they have no business doing so. This is an old states rights issue and what has happened with this takeover is the precise thing we’re talking about–a takeover of regulation of one insurer. Because you can’t see the Fed just idly sitting there letting AIG do something that is not in keeping with “the Fed’s good judgment” now can you? This whole thing is a mess. It reeks of socialism at its worst. What is this country coming to?

Can you imagine the Federal Government, the new owner of AIG, now being regulated by the State of New York? But that’s precisely what has happened. Or has the Fed placed AIG in the same company as Social Security with all of its stumble-bum decisions? Can a state legally oversee the Federal Government? With AIG, a best case can be made that the state is the only jurisdiction that has the power to do so.

Even a better question: We know AIG didn’t go under because of its superior insight and management ability. When we the people now own the giant insurer with liabilities estimated at more than $450 trillion, what happens to “we the people’s” pocketbooks if this stumbling giant continues to stumble under federal government oversight–which is even more likely now that government has its hands in things?

Who then will bail out the taxpayers who will be called upon to come up with that $450 trillion–assuming, of course, all of AIG’s invested reserves also go curplunk? What we have been doing to less developed nations (LDN) for years and years is coming home to roost. Through companies like MAIN, and Halliburton many LDNs have mortgaged their souls to the devil in the name of U.S. imperialism and the effort to create international empires.

Ecuador is a good example of a poor nation developing oil wells, oil lines, and building power plants, roads and other infrastructure for which their leaders has hocked the soul of every poor citizen. They can never live long enough to pay it back. Third world debt has grown to more than $2.5 trillion, and the cost of servicing it–over $375 billion per year as of 2004. It’s more than all third world spending on health and education and more than twenty times what developing countries receive annually in foreign aid. Over half the people in the world survive on less than two dollars per day, which is roughly the same amount they received in the early 1970s. Meanwhile, the top 1 percent of third world households accounts for 70 to 90 percent of all private financial wealth and real estate ownership in their country; the actual percentage depends on their country (James S. Henry, “Where The Money Went,” Across The Board, March/April 2004, pp42-45. For more information, see henry’s book: The Blood Blood Bankers: Tales from the Global Underground Economy (New York: Four Walls Eight Windows, 2003).

The reason I mention third world countries is because they don’t have money and have become indebted up to their ears. We Americans are quickly following in that pathway. Our country is broke and our leaders don’t know. Isn’t it about time we elected a president and Congress with conservative values?

To my question about who will bail out us taxpayers, the answer is no one. We’re the pocketbook of last resort. Maybe we could call up King Abdullah bin Abdul Aziz Al Saud. He could help, but would want the State of New York in exchange. Or, maybe Hank Paulson, who knows a lot of people in China because he was a good Boy Scout, could talk to Chinese President Hu Jintao. Maybe good old Hu could bail us out. But he would want the State of California.

Good, give them California and New York. Let Hu deal with the Spanish immigrant problem. Good, give them New York. Let King Abdullah deal with the Democrats and the Jews in New York.

In my view, the Feds have no business throwing around taxpayer money to salvage an insurance company. That’s state business. Maybe we would end up there, but where’s the good-sense protocol? If you’re Bernanke you naturally would have had unch with New York Governor David Paterson and NY insurance commissioner Eric A. Dinallo and ironed out an agreement beforehand. Everyone should have been placed on the same page here, and I fear they weren’t.

There will be a lot of political backlash on this Fed move. John McCain was right–we should let AIG fail, and that’s pretty much what the Bush Administration decided to do rather than expose our national assets on a private enterprise like this. Of course, Obama was silent. He doesn’t even know to this day and hour what he would have done because he’s an “empty suit”–a deadhead.

A lot of national leaders must have quizzical looks on their faces this morning. Commerce Committee Chairman Daniel K. Inouye (D-Hawaii) should call for hearings and start questioning the likes of Greenspan and Bernanke. Ask them how they feel this is all going to fall out? At the least, Bernanke has overstepped the bounds of his authority.

And at the most, he has done something that should have called for pre-counseling from others, including the Treasury and the President. How does Bernanke even know the U.S. Treasury has enough money in the bank to pay for this kind of socialistic maneuvering? If we’re halfway broke, who delegated him to completely break the bank?

When we look into what has turned out to become the AIG fiasco, we’ll find the U.S. is on the ropes with money. In fact the U.S. is broke, and our elected officials haven’t yet awakened to that prospect.

It is quite interesting for the Fed to use taxpayer money this massively when they have no accountability. Blog onto this story. Do you believe the Fed should be so powerful, first off; second, doesn’t it seem weird and wrong for a private group like the Fed to be able to tap into your pocketbook and mine whenever they please?

My position is that this is very wrong. In this case, the Fed has stepped way beyond their previously-given mandate. Maybe Congress should look into what the Fed can or cannot do and change something here.

Or maybe not. Can you imagine how badly the Fed would perform–not to say that Alan Greenspan and Ben Bernanke have been angels and highly competent--if we had a political hack making these decisions? Who is to say Bernanke is not beholden to somebody–perhaps many of AIG’s biggest stockholders? If anyone has information on that, sound off, please.

The following fits in nicely with this from Slate:
In for a Pound

By Daniel Politi
Posted Wednesday, Sept. 17, 2008, at 6:42 AM ET

News keeps pouring out of Wall Street and all the papers lead with the Federal Reserve‘s startling decision to lend insurance giant American International Group up to $85 billion in a bailout deal that would give the government control over the company.

The New York Times calls it “the most radical intervention in private business in the central bank’s history.” In exchange for its cash, the government would get a 79.9 percent equity stake in the company. The Washington Post notes that the rescue package “effectively nationalizes one of the central institutions in the crisis that has swept through markets this month.” The Wall Street Journal points out that this is “a historic development, particularly considering that AIG isn’t directly regulated by the federal government.”

The move marked an astounding about-face for the government that had been resisting AIG’s pleas for help over the last few days and earlier chose to let Lehman Bros. fail rather than put forward more taxpayer money. “The main difference between the two situations: AIG is so huge and its operations so intertwined in the financial system that the Fed feared an AIG failure could harm the broader economy,” USA Today summarizes. Or as the WSJ puts it: “This time, the government decided AIG truly was too big to fail.” The Los Angeles Times notes that while Fed officials said the action was due to the fact that AIG insures the assets of millions of Americans, it seems the main reason “was fear that the company’s failure could weaken or destroy nearly a half-trillion dollars’ worth of financial protection that AIG provides Wall Street firms and the biggest companies of Europe and Asia.”

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Daniel Politi writes “Today’s Papers” for Slate. He can be reached at todayspapers@slate.com.

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