Mange Mes Briefs > Did it occur to anyone what happened here?

So the government took over Freddie Mac and Fannie Mae due to their almost certain collapse. Now, one could argue about the merits of such a deal but the fact remains that they were quasi-government entities that had special privileges. Yes, they were technically private companies but they were also exempt from registering their securities with the Fed as well as being shielded from having to pay state and local taxes. Their implied government backing also gave them an aura of invincibility to investors so although they were private companies they had an implicit government guarantee behind them. I personally think we should have let them fail so the market could correct itself, but that’s another story.

What has really shocked the hell out of me is the Fed takeover of AIG. This is a private company with no government relationship or guarantees. This isn’t even a securities or financial organization but an insurance company. And the Fed, as backed by our government, took it over. Does that shock anyone? The Fed, another quasi-government, quasi-private entity, has taken over a private company to prevent it from failing. We have essentially nationalized a private insurance company for no other reason than to keep it from going under. What?!!

When I heard this my jaw dropped. I know our government is completely unaccountable to the people but I certainly never thought it would actually nationalize a private institution. This is insane. I think this is probably one of the greatest examples of our system being rigged from the inside. If we truly had a free market then companies would be allowed to perform well or poorly based upon their own guidance and market forces. Instead we have the Fed artificially manipulating the market via interest rates and money supply and then wonder how this could have happened.

And now we’ve nationalized a private corporation. The only difference between this and Soviet Russia is that the Soviets didn’t use taxpayer money to take over a company, they just took it.