Big Government

I’m always amused when I hear complaints about “big government” (wink to Rue St. Michael) and how if only it would stop hampering “innovation” with its incessant meddling we’d all be on Peach Street for damn sure. When will this myth die the bloody death it so richly deserves? Oh well, maybe this little nugget courtesy of Naked Capitalism will help clear the air for those who still, even after Big Government was last seen shoveling tax dollars like a son-of-a-bitch into the coffers of the insolvent financial institutions primarily responsible for destroying the world economy, think Big Government serves anything but the ruling elite:

Beginning late in the week of Nov. 3, the New York Fed, led by President Timothy Geithner, took over negotiations with the banks from AIG, together with the Treasury Department and Chairman Ben S. Bernanke’s Federal Reserve. Geithner’s team circulated a draft term sheet outlining how the New York Fed wanted to deal with the swaps — insurance-like contracts that backed soured collateralized-debt obligations….

Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet. After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public.

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