Do you believe that a tiny cadre of unelected officers--seven bankers--could have the power to commit the taxpayers of the United States to the purchase of a private company for $85 billion? Where do they think they're getting that kind of money? Can they just order the mint to print it up and send it out to the companies' creditors?
Actually, they can't do any of those things, and whatever papers the Federal Reserve Board of Governors has generated to seal this transaction will eventually be used to stock the dispensers in the lavatories. AIG would do as well making a contract with a horse or a slice of bread.
The law is clear on this. The Fed has only the powers granted to it under Section 241 of Title 12 of the U. S. Code, entitled, just to make sure there's no misunderstanding, "Enumerated Powers. "- The power to own and control a private company--other than a bank--just isn't there.
The Fed is authorized by law to regulate banks and to act as a bank. That's about it. It can't appropriate money. It can create and destroy money with variations in the rate of interest it charges for loans, but it can't create a government indebtedness unless the money has been appropriated by Congress. It can't just dip into the Treasury, and it can't print the dough, either.
If the U. S. Code means anything, the Fed's move to "buy"- AIG is altogether illegal and altogether voidable, and the next Congress (or maybe this one) will repudiate it whenever that becomes convenient, as it certainly will. That's if the member banks, which are on the hook, too, don't move to invalidate it first.
People disposed to rely on the faith and credit of the U. S. Government to make good on this transaction would be well advised to consult a lawyer. It's never been tried before, because it's a violation of federal law. Harry Truman once tried to take over the country's steel mills when steelworkers threatened to strike. Supreme Court said, "No. "- The present crop of justices will give the same answer here.
This move, along with the rest of the proposed "bailout," is actually a vast transfer of wealth from the have-nots to the haves. Ask your Congress Member who's pocketing all this money (somebody is), and you'll discover it's people with too much money--including no small number of Arabs, Asians and Europeans--who risked some of it to make more. They suffered a 10% loss in value over the past week or so, and they're turning it into a panic so they can loot our treasury before the government changes hands. It's the biggest single expenditure in the history of our country, and it's nothing but blackmail.
Our kids and grandkids will sweat to pay for this and our ill-fated military adventures for the next 50 years at least, and those responsible for it all will be remembered as traitors a hundred years from now.