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No Evidence That AIG Bailout Prevented a Meltdown

Ben Bernanke has squandered opportunities to thoroughly justify some of the most activist Federal Reserve policies in recent memory: the financial bailouts of 2008. At a recent lecture at George Washington University, for example, the Fed chairman discussed the AIG bailout but failed to explain precisely why policymakers believed that a collapse of the insurance giant would have triggered a financial Armageddon. The reason for Bernanke’s failure isn’t a lack of motivation; it’s a lack of hard evidence. The bailout bureaucrats had no clear-cut methodology to guide their decision-making; all available evidence indicates that they relied on seat-of-the-pants analyses saturated with arbitrary assumptions, according to Vern McKinley of the Independent Institute and Tom Fitton of Judicial Watch.

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