September 17, 2008the most radical intervention in private business in the central banks history.\n\nThe US government has seized control of insurance giant American International Group in an unprecedented $85 billion bailout. The Federal Reserve made the deal on Tuesday (September 2008) to save AIG from collapse inwhat the New York Times describes as the most radical intervention in private business in the central banks history. The move comes as a series of financial crises has altered the landscape of Wall Street. We speak with investment banker turned journalist, Nomi Prins, and Michael Hudson, president of the Institute for the Study of Long-Term Economic Trends.\n\nExcerpt...\n\nNomi Prins, former investment banker turned journalist. She used to run the European analytics group at Bear Stearns and is now a senior fellow at Demos. She is the author of two books: Other Peoples Money: The Corporate Mugging of America and Jacked: How Conservatives Are Picking Your Pocket.\n\nMichael Hudson, President of the Institute for the Study of Long-Term Economic Trends, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and author of Super-Imperialism: The Economic Strategyof American Empire. He is the chief economic adviser to Rep. Dennis Kucinich.\n\nGovernment bailout, which means taxpayers stuck with the bill is the worst possible move, and it puts the class war back in business with a vengeance. Wall Street has been preparing for this for years, because every financial analyst knows that the debts cant be paid. And the question that Wall Street has, if youre going to take a gamble on bad debts that cant be paid, how are you going to come out a winner? And theres only one way of coming out a winner, and thats to make the government bail you out. This has beenknown for years, because its inherent almost in the mathematics of compound interest. Every banker I know knew that the loans they were making were going to go bad. They were trying to sell them to somebody else, ultimately expecting them to end up with some sovereign wealth fund.\n\nAnd now, you hadat the beginning of the show, McCain saying that this is the result of fraud and incompetence. The government has now bailed them out. But by bailing them out—Wall Street was coming to terms with the bad debts. When Bear Stearns went under and when Lehman Brothers went under, this began to wipe away the bad debts. And when the debts exceed the ability to pay, theres only one thing any economy can do, and thats wipe them out. Instead, the government istrying to keep the fiction alive. And what Paulson did yesterday, in bailing out AIG, was to try to lock in whoever is the next president not only to further bailouts of Wall Street, ostensibly to protect the public money, but to make it impossible to write down the debts of the four million homeowners that are expected to default this year, impossible to write down the debts of companies that have issued junk bonds, impossible for the country to get rid of this excess of debts that cant be repaid. And youre having really a war now of creditors against debtors. And this is what Wall Street hasbeen preparing for. It needed an emergency to do it. Its really not an emergency at all. This has been building up for many years. Everybody expected it. And breathlessly now, the Secretary of Treasury has done it. \n\nThese are the people who sang, Theres no money for Social Security. Were going tohave to privatize it. Were going to have to turn over your Social Security to Bear Stearns, to AIG—to the very people who have shown how theyre mismanaging money. Imagine if the Republican program had gone through and Social Security had been privatized and these were the jokers who were managingyour Social Security. Theyd stick you with the losses. AIG, America, American, Bailout, Bank, Bankrupt, Bankruptcy, Bear, Brothers, Bush, Care, CEO, Cheney, Chomsky, Congress, Crisis, Depression, Economic, Economy, Facts, Fannie, Fed, Federal, Financial, Frau, Freddie, Government, Greed, Health, Henry, Housing, Ideology, Imperialism, Lehman, Lies, Lynch, Mac, Mae, Market, McCain, Merril, Money, Mortgage, Neocon, Obama, Paulson, Profit, Reality, Recession, Republican, Rescue, Reserve, Right, Security, Secutity, Social, Stearns, Street, Tax, Taxpayer, USA, Wall, Wing