Nationalization is as American as Apple Pie

[Post Summary]

And there is nothing new under the sun.
—Ecclesiastes

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I just read AIG is putting its Asian Life Assurance Unit up for sale. The question is, first, whether this should be allowed, and second, are our elected representatives criminally insane?

Let me get this straight. The taxpayer comes in with $150bn (and still growing) in exchange for worthless Credit Default Swaps and then allows AIG's most profitable businesses to be auctioned off to the highest bidder?

The argument rationalizing this sale, of course, is the money AIG raises will go to pay back Uncle Sam. However, this argument misses one crucial fact.

The financial system continues spiraling out of control.

So, wouldn't a reliable revenue stream such as is generated by AIG's Asian Life Assurance Unit be a valuable asset in Uncle Sam's Treasure Chest? Would not the cash better protect the taxpayer's interest ... and at the same time provide a capital base that can be effectively leveraged to deal with added financial system vulnerabilities yet exposed?

Suddenly, CNBC using the word "nationalization" as though it were a threat of the Bubonic Plague's return makes all the sense in the world. Thus, it should be duly noted how thieves whose criminal enterprise has been exposed by an historic collapse are not in the least disposed to cease their thieving ways.

Per nationalization of AIG ... and of the entire banking system ... given this extraordinarily dangerous moment in the history of global finance it makes all the sense in the world that an honorably intentioned people (do not financial system bailouts, indeed, demonstrate this?) act to promote the general Welfare. What better way than tap into the spirit of something we Americans take a great deal of pride in — the profit motive?

My point is simple. We squander an opportunity to put in order the global financial system allowing companies like AIG freedom to sell profitable businesses at prices likely to be fire sale bargains. We would be better served seizing these revenue streams and leveraging them in such a way as quickly reverses a situation rapidly spiraling out of control. Imagine how revenues from AIG's Asian Life Assurance Unit might help capitalize a reconstituted Bank of the United States whose task it could be to finance America's build out of a hydrogen-powered economy...

—Tom Chechatka