The federal government’s intervention and prevention of the collapse of American International Group (AIG) represents an acceptance of Marxist philosophies, according to some CNBC analysts.
“They never made the real calls, they never made the tough decisions,” CNBC “Mad Money” host Jim Cramer said on MSNBC’s “Morning Joe” September 17 of financial leaders.
“Their ideology was such they believed everyone should own a home including people who were deadbeats and had no right to own a home. They were anti-regulation. Now we have spent $900 billion bailing out these institutions and in a twist on what Nixon said after the seizure last night of AIG and Fannie Mae – we’re all communists now.”
The day before, Cramer said on CNBC’s “Street Signs” that a bailout was necessary. He warned the markets would have frozen and not opened if AIG (NYSE:AIG) wasn’t bailed out. He proposed the “pass-the-hat” global bailout.
Later on “Morning Joe” September 17, CNBC “Squawk on the Street” co-host Mark Haines made a similar observation, declaring a state of socialism on Wall Street.
“Well, everyone’s in favor of a free market until it doesn’t work to their advantage,” Haines said. “And then, they’re in favor of socialism and that’s where we are right now – that’s where we are right now.”
Haines’ assessment was that the free market failed for AIG – noting how AIG’s potential collapse had frozen up the banking system.
“The free market was not working as far as AIG was concerned,” Haines added. “[B]ut something had to be done because there was – this was banks at one point yesterday had stopped lending to each other because they were so nervous about what was going on in the credit markets.”
The long-time CNBC anchor admitted the government intervention was ill-conceived on a philosophical level, but it was a necessity – even though it didn’t fix the situation.
“Nobody really likes this on a philosophical basis, but we live in a real world and we can’t, can’t dither with philosophy when such serious matters are at stake,” Haines added. “So – I’m of the opinion this doesn’t really fix anything – it’s just another Band-Aid.”
Cramer and Haines weren’t the first to link government bailouts to communism. In a September 8 interview on CNBC Europe, Rogers Holdings CEO Jim Rogers said