21
Sep
08

IS THE GOVERNMENT ALLOWED TO BUY AIG?

Hello all, I have been a friend of our host for a little over two years, we disagree on several issues, but have generally the same Conservative-Libertarian small government view and we get along quite famously (or he is a GREAT actor).  I am very pleased that he has allowed me to author a topic for his blog and hope my topic generates interest and honest discussion.

 

The economy, it is said, is in shambles. There is some evidence that this is true, Bear-Stearns, Lehman Bros., AIG to name the current failures.  GM, FORD, and CHRYSLER are rumored to be begging uncle George to send them a cash bailout and I am sure everyone remembers that Fannie Mae and Freddie Mac were “too big to fail,” things look pretty bad.  Unemployment has “exploded” to 6.2 percent and Gas is around 3.75 a gallon.

 

Our Presidential options are on opposite sides of how to “fix” the economy and we have to choose in about 7 weeks.  Wow, we got a lot of crap on our plates!

 

All that said, I would like to add one more morsel.  Where did the Federal Government get the power to buy a corporation?  The AIG “loan” of 85 Billion for 2 years, causes the Federal Government to actually OWN 80% of AIG!  ON the pro side, many talking heads are saying this move could actually generate a profit for the Federal Government, the cons say, that “We the People” stand to lose quite a bit more than 85 Billion.  Regardless of which happens, lets analyze the original question “Where did the Federal Government get the power to buy a corporation?”

 

I have gone through the Constitution and the only thing I can find that could remotely be referenced would be the General Welfare Clause, so lets look at what that cause says. It states: 

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

For starters, here is an 1828 version of Websters American Dictionary definition of Welfare, and it very clearly defines the terms for individuals and States:  

WELFARE, n. [well and fare, a good going] 
1. Exemption from misfortune, sickness, calamity or evil; the enjoyment of health and the common blessings of life; prosperity; happiness; (applied to persons) 
2. Exemption from any unusual evil or calamity; the enjoyment of peace and prosperity, the ordinary blessings of society and civil government; (applied to states) 

I believe the “GENERAL WELFARE” clause as written in the Constitution is referring to States, not individuals. Article 4 section 4 is quite clear on what the Federal Government guarantees to each of the several states and that seems to support a “state” perspective with regard to “general welfare”.

 

Based on the premise that the General Welfare clause as written applies to the States, how does the verbiage allow a buyout?  The clause appears to cover things like a military, ensuring trade goods are accessible, and I would even add SOME infrastructure like a wall along the USA-Mexico and USA-Canada borders, levees in New Orleans and Galveston- anyplace where significant flooding is known to occur and Yes, arguably the existence of entities like FEMA.  Other than that, NOTHING, nothing at all directly or indirectly implies the ability to buy a corporation!  The “purchase” of AIG is Unconstitutional and each and every American needs to understand the implications we are facing.  In the early 20th century it took a Constitutional amendment to stop people from making and drinking alcohol, now smoking cigarettes are almost illegal in most states and definitely in all federal buildings and all that took was an act of Congress.  AIG has been bought by the Treasury department via the Federal Reserve to stave off an imminent and calamitous failure, the American people, WE THE PEOPLE, now own AIG and we never even had the opportunity to discuss it.  Our Government has allowed JP MORGAN to buyout Bear-Stearns, and the American people have backed the loan, again, I ask, how is that allowed under the Constitution?  If the Congress can deem a company “Too big to Fail” they also have the ability to deem a business “Too small to succeed.”  I for one do not want the ability to succeed OR the ability to fail to be controlled or intimidated by the Federal Government, the ability to succeed or fail are the forces that have driven America.

 

The Constitution is the foundation of this country, if we allow the Federal Government to buy or bail out Wall Street, we will lose our Republic completely and become a Fascist (State Controlled Capitalism) nation.

 

But, that is just my opinion, I could be wrong…

 

Written by: DJ

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