US nationalizes AIG… September 18, 2008Posted by jasonized in news.
It strikes me that the financial crisis in the US right now is not unlike debt-crises that have previously occurred around the world. No structural adjustment, of course, will ever be demanded of the US, but I wonder what central bankers and finance ministers in other parts of the world must be feeling right now. The NYTimes has some reactions.
The US has reached a point of determining that some things are “too big to fail.” In essence, that’s socializing risk for big companies; for what it’s worth, the bailout of AIG is nationalization. And this is after an increasing trend: Freddie Mac, Fannie Mae were government-backed to begin with but needed a rock-solid guarantee. And this is after years of automakers giving up pensions to the Pension Benefit Guaranty Corporation and airlines drawing public dollars after 9/11.
“Today the actions of American policy makers illustrate the need for economic patriotism,” said Bernard Carayon, a lawmaker of President Nicolas Sarkozy’s center-right governing party, UMP. “I congratulate them.”
Are we to expect the rise of the “national” business?