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Implicit nationalization

Tweet [1]

This is why [2] I argue we've already nationalized much of the financial sector, at least implicitly:

President Obama [3]
vowed to try to stop the faltering insurance giant American
International Group from paying out hundreds of millions of dollars in
bonuses to executives, as the administration scrambled to avert a
populist backlash against banks and Wall Street that could complicate
Mr. Obama’s economic recovery agenda.

“In the last six months, A.I.G. has received substantial sums from the U.S. Treasury [4],” Mr. Obama said. He added that he had asked Treasury Secretary Timothy Geithner [5] “to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole.”

In
strongly-worded remarks delivered in the White House East Room before
small business owners, Mr. Obama called A.I.G. “a corporation that
finds itself in financial distress due to recklessness and greed.”

“Under
these circumstances, it’s hard to understand how derivative traders at
A.I.G. warranted any bonuses, much less $165 million in extra pay,” Mr.
Obama said. “How do they justify this outrage to the taxpayers who are
keeping the company afloat?”

Want to bet they'll find a "legal" way to stop those bonuses?

I wish the bonuses would stop, too. I don't believe in rewarding people who destroyed their company. Note to the President: when you stop sending them money, the bonuses will stop.

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