The AIG Bailout Crime

Mike Rozeff reports:

the Fed is going well outside its already significant sphere of power when it begins dealing with specific companies. This means it must pick and choose those whom it aids. This process is arbitrary and dictatorial. It is open to enormous corruption because we the people do not control the Fed, and yet its direct interventions into the economy transform into gains for some of us and losses for others. What right does the Fed have to engineer these wealth transfers? At least when individual banks make loans, there is a semblance of market discipline in that the banks are beholden to shareholders and bondholders, and the banks can fail. Individual banks have at least some incentive to make decent loans. The Fed has no such controlling organizations in place and, because it is a power unto itself, its incentive to make good loans is not as strong as a member bank’s. The Fed even revels in being lender of last resort, which means that it views its mission at times as taking in bad loans in return for cash or good securities.

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