Sunday, September 30, 2012

The Socialist/Communist Obama Administration Takes a Step in a Backward Direction – Government to Sell Big Stake in AIG

If Mr. Obama is a Socialist, He is Terrible At It

Four years ago the supposedly dedicated free market President Bush nationalized the AIG insurance company.  The reason at the time seem particularly reasonable.

U.S. officials four years ago said the rescue of a teetering AIG was necessary because the company was so entangled with other financial firms around the world via complex instruments that its collapse could have unpredictable effects including possibly bringing down many other firms.

Yes that was the Bush administration.  But as everyone knows President Bush was replaced with President Obama, and as told by Conservatives, Mr. Obama is really a socialist, and probably a communist.  This of course ignores Mr. Obama’s action in the auto industry, or as everyone put its “Osama is dead and GM is alive”.

So it must disappoint his critics when Mr. Obama refused to act like a socialist.  Case in point, the government has overseen the resurgence of AIG and is now getting ready to sell a large part of its stake in the company.

The Treasury Department said it would sell $18 billion of American International Group Inc.  stock in a public offering, slashing its stake by more than half and making the government a minority shareholder for the first time since the financial crisis was roaring in September 2008.

Even worse, it appears the government will do ok financially on the deal, something that must surely horrify the doom and gloom conservatives who say government can do nothing right in business and the private sector does everything right.

As of the last Treasury sale of AIG shares, the government had $24 billion of AIG-related investments outstanding, according to Treasury data, while the bailout of AIG had yielded over $18 billion in interest, fees and profits. With the coming sale of $18 billion in securities, the government by one measure can consider itself to have recouped the funds it extended on the bailout.

But hey, the stock market is up near 40% since Mr. Obama took office, so who you gonna believe, the right wing fanatics or your own pocketbook.  

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