Government Takeovers: Another Weapon, and a Truly Fearsome One
Step one. Via NYCweboy, via Corrente, I arrived at this graphic in the Financial Times.

I studied it for several minutes. You should, too. The "global reach" of AIG, indeed. Many different kinds of activities, all around the world. The kinds of activities that allow businesses, and individuals, and governments to continue to function efficiently and productively -- indeed, simply to function.

Let's move on to step two.

There are only a very few blogs with readers who offer insights that make it worthwhile to read through the comments. Calculated Risk is one of the rare exceptions.

Keep that FT graphic and its implications clearly in mind. Then consider this comment to this post:
Scooby writes:

Am I the only one who noticed that the US government has just bought itself the ability to inflict a whole bunch of "financial terror" worldwide by taking controlling interest in these huge financial firms?

Is everyone around the world too busy being smug that the US taxpayer is backstopping them to notice the big rusty iron vise into which their family jewels has slipped?
And you thought the takeovers were a problem. They're not a problem: depending on your goals, they're a huge, immensely valuable benefit. Depending on who you are and what you want, "financial terror" is an awesome and powerful weapon.

Consider. Country A through Z (look at that graphic again, lots and lots of countries all around the world, probably most of the countries on the globe) wants to renegotiate thousands, perhaps millions, of insurance policies. Or it wants a break on some rates, perhaps for a crucial construction project. Or it needs a grace period to make some payments, maybe in connection with a major government program. Or...fill in the endless possibilities at your leisure.

And the United States now says: "Well, sure! We'd love to help you out. In exchange, how about granting/extending/giving us better terms on those basing rights?"

Or: "But you know what we'd like? First rights to those valuable resources of yours. [Fill in your preferred resource.] Plus waivers of all those environmental protections you have in place." Probably plus a bunch of other things.

Or: "We'd be happy to do that for you. But we need some overflight rights for the next year. Make that three years. We may have a few, well, operations we need to execute. We're sure you understand."

Or: too many possibilities to begin to list.

Get it? And if Country A through Z says, "no" ... well, gee, too bad, says the United States. Guess we can't accommodate you. How many people, and businesses, and governments do you think will say no, as the screws begin to tighten?

The AIG takeover is a huge weapon. A monumental weapon. I'm certain it is far from the only weapon of this kind the U.S. government already possesses. And as the economy further weakens, the U.S. government will probably pick up some more. (Here, I am referring to comparatively new mechanisms of coercion, pressure and extortion, such as those described above, in addition to those "normalized" and "legal" forms of coercion, pressure and extortion that have been among the major instruments of U.S. foreign policy for decades.)

And do you think Obama and the Democrats will want to give up weapons of this kind? Just like they gave up the FISA weapons? Or the Military Commissions Act weapons? Or the Patriot Act weapons?

Hahahahahaha.

Hahahahahahahahahahahaha.

The ruling class wins. The ruling class always wins.

Suckers. Yes. Me, too.

The ruling class are bastards. Whenever you think they've hit a major snag, consider the problem again. Then once more. You probably missed something.

As my post the other day indicated, there is still a lot of blood the ruling class can drain from the decaying body of the United States as a whole, and from you. They are very far from done.

Now I've cheered you up. Again. I would say I'm sorry, but it's probably better to understand what's going on and what may be coming as best we can. There is a great deal of exploitation, bombing, chaos, and death that still lies in the future.

Thank God I bought some liquor today. You should get some, too, if you don't already have it. Or something stronger. And screw your brains out. That is my solemn prescription. Follow doctor's orders now!

Also see, Paulson Bailout Plan a Historic Swindle

Paulson Bailout Plan a Historic Swindle

By William Greider

September 19, 2008

Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses--many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?

If Wall Street gets away with this, it will represent an historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics--exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.

Christopher Whalen of Institutional Risk Analytics, a brave conservative critic, put it plainly: "The joyous reception from Congressional Democrats to Paulson's latest massive bailout proposal smells an awful lot like yet another corporatist lovefest between Washington's one-party government and the Sell Side investment banks."

A kindred critic, Josh Rosner of Graham Fisher in New York, defined the sponsors of this stampede to action: "Let us be clear, it is not citizen groups, private investors, equity investors or institutional investors broadly who are calling for this government purchase fund. It is almost exclusively being lobbied for by precisely those institutions that believed they were 'smarter than the rest of us,' institutions who need to get those assets off their balance sheet at an inflated value lest they be at risk of large losses or worse."

Did We Say $500 Billion? Sorry, Bailout Will Cost $1 Trillion

Oh, and the Wall St. Turmoil Won't Hurt Defense Firms, but you just wait, you aint seen nothing yet, the full effects of the 1929 stock market crash wasn't felt until around 32/33, and it was bad, real bad, however, things are moving much faster these days, we should feel the full effects in 09, I'm predicting. Oh, and bad is not what I'd use to describe it when it hits.

Finally, from the 'Oh, really?' files, John McCain, the Republican presidential nominee, avoided potential losses. Because the Arizona senator's run for the White House, his wife, Cindy, last year liquidated a blind trust that had contained stock in AIG, Fannie Mae, Freddie Mac and Lehman. The amounts of stock she had owned weren't disclosed.

You really want to watch/listen to Sept 17th's Democracynow! I'd put it high on your list for the weekend.

US Seizes Control of AIG with $85 Billion Bailout

The US government has seized control of insurance giant American International Group in an unprecedented $85 billion bailout. The Federal Reserve made the deal on Tuesday to save AIG from collapse in what the New York Times describes as “the most radical intervention in private business in the central bank’s history.” The move comes as a series of financial crises has altered the landscape of Wall Street. We speak with investment banker turned journalist, Nomi Prins, and Michael Hudson, president of the Institute for the Study of Long-Term Economic Trends.

Welcome to the other side of the mirror, to the far end of the rabbit hole. This may be described as plutarchy, kleptocracy, fascism, communo-capitalism, class warfare, or open anarchy. Call it what you like.

Just don't call this a Republic, or a democracy, or a government of the people. Don't ever call it any of that any more. That shit is over and done. The Republic Ben Franklin said we could have if we could keep it? Yeah, we couldn't keep it. We handed the keys, and the national credit card to some wiseguys, and they did what wiseguys do.

In the coming year, it will become illegal to hoard gold or precious metals, illegal to leave the country WITH your wealth intact (you can go, but the money stays here). Some form of national service draft will be put in place to put people to work at something, anything. Zoning laws about how many families can live in one house will fall by the wayside, as families do what they must to get in out of the rain, and have something to eat.

The population will have to be controlled, by every means at hand. If they are not well managed, they will get out of hand, and threaten the Ownership Society.

We just rewarded these fucks for the biggest ripoff the public has ever seen or is ever likely to see.

Thank you father, may I have another?