WhiteLion wrote...
I think you are seeing non-existent nefarious motives in the government being involved in the markets. It's not really a new thing. State governments invest frequently for the same reasons as private individuals: you make more money generally than if you just stash bills in your mattress. (A high publicity example was the Bob Taft scandal, although the scandal was not related to the general concept of government investing but rather corrupt officials embezzling money.)
What makes this different from Europe or Russia is that the government came in and made a market offer for AIG, rather than just seizing it by force(Russia) or starting a government entity and making laws saying that everyone has to use the government company(Europe). If either of these things start happening, I will be with you in opposing them and voting against any politicians who support them.
Investing and being involved in the markets is different than taking majority voting power over a company. No matter how you dress it up, or look at it. They took control of a company. Sure, they didn't come in with guns saying they own the place which would result in a huge backlash from the people and possible a riot or two. They came in and bought out a company. Which is a more peaceful way of coming in with guns and saying "we own this company". Which during a crisis, when everybody is panicking nobody will question the motives when the government does something because of some weird notion that "The government has out best interest in mind" which they obviously don't.
Another question is: what can the government even do with AIG? It's built to make money, and the government generally isn't interested in running enterprises solely for profit. If it is run into the ground via incompetence, well, it's a waste of money, but it's not really any worse than any of the many other methods congress finds to waste money.
I'm not sure what they can do it with since I don't know how expansive AIG really is. I just know that with the track record of the U.S. Government that if you give them an inch they'll take a mile. There needs to be a history of "good" behavior before I'll trust the government but, sadly there is just a history of mismanagement, wasteful spending and general incompetence and failure.
Maybe I am being paranoid and more pessimistic than usual but, looking at the history is like looking at the credit report of a potential customer or employee. The past says a lot about the future.