Quote of the Day, Nationalizing AIG Edition
Alex Knapp · Wednesday, September 17, 2008 · 8 comments
"No, no. Relax. We couldn't possibly be socialists. Socialists only nationalize successful businesses."
— John Scalzi
FILED UNDER: Economics and Business, AIG, Bailouts, Humor, John Scalzi, quote of the day
About Alex Knapp
Alex Knapp is Associate Editor at Forbes for science and games. He was a longtime blogger elsewhere before joining the OTB team in June 2005 and contributed some 700 posts through January 2013. Follow him on Twitter @TheAlexKnapp.
Wednesday, 17 September 2008 at 12:58
What is a bailout anyway but a reverse windfall profits tax – think of it as a stimulus check for the government.
Crust says:
Steve Plunk says:
Is a loan the same as nationalization of a business? AIG has plenty of hard assets to secure the loan. Those assets include the "government backed" securities from Fannie Mae and Freddie Mac.
Chris Lawrence says:
"Socialists only nationalize successful businesses."
And then promptly run them into the ground. But that's a story for another day.
So what you're saying, is: In Capitalist America, failure socializes you?(*)
(*)See, this is why OTB needs a moderation system, this should cost me something…
Steve Plunk:
Is a loan the same as nationalization of a business?
No, not necessarily. However when you combine it with the government getting an 80% equity stake it is.
Thursday, 18 September 2008 at 15:29
Crust, I would disagree. AIG has plenty of assets to back the loan and the government has no intention of running the business if AIG defaults. The 80% stake is only in the case of default. This is not anywhere near nationalization of a business.
Fannie Mae and Freddie Mac were nationalizations but they always carried the implied backing of the government.
But an 80% stake in AIG doesn't imply government backing? AIG may not have been like Freddie and Fannie last week, but it's quite a bit closer now.
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