Thursday, September 18, 2008

Dispossession by Decree (Will Grigg)

Will Grigg says the Fannie and Freddie bailout by the U.S. Treasury was bad enough, but the Federal Reserve's bailout of AIG is even worse. An excerpt:

Perhaps I was too distracted to notice, but I don't recall a spontaneous outpouring of public demand for a taxpayer-financed bailout of Fannie and Freddie, the costs of which will eventually run into the trillions of dollars. In that case, however, there is an almost imperceptibly thin thread of public accountability, since Congress -- acting with the desperate haste it displays only when carrying out an errand on behalf of the Power Elite -- passed a patently unconstitutional measure "authorizing" the Secretary of the Treasury to bail out Fannie and Freddie.

This means that the electorate, which installed and tolerates Congress, shares some responsibility for this crime.

However, it's impossible to blame the electorate for the most recent act of mega-larceny, the Federal Reserve's $85 billion bailout of the American International Group. This was done by the FED -- an nominally private entity that exercises immense political and economic power without constitutional standing or accountability of any kind. Congress didn't appropriate the necessary funds for that bailout. Nor was the money set aside through executive action, the entirely illegal method now commonly used to commit the United States to immensely expensive undertakings such as wars of aggression against distant, helpless countries.

The FED's action amounts to the $85 billion purchase of a private company, on behalf of the federal government, using public funds -- without political accountability of any kind. Outrageous as it is, this action may have the healthy, if thoroughly unintended, consequence of illustrating just who actually runs our political system and economy.

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