George Bush’s Treasury Secretary Hank Paulson is rubbing his grubby paws with glee. Fresh off of executing the massive bank equity purchase, he has now signaled that it will be expanded — to include insurance companies.
The auto companies are lining up next. The ethanol industry wants in.
And they’ll tell two friends. And they’ll tell two friends. And so on. And so on. And so on.
How’s that crap sandwich tasting?
Via the WSJ:
U.S. Mulls Widening Bailout to Insurers
The Treasury Department is considering buying equity stakes in insurance companies, a sign of how the government’s $700 billion rescue program could turn into a piggy bank for a range of beleaguered industries.
The availability of U.S. government cash in the middle of a global credit squeeze is drawing requests from insurance firms, auto makers, state governments and transit agencies. While Treasury intended for the program to apply broadly, the growing requests could put a strain on the $700 billion, a sum that only last month stunned lawmakers.
MetLife Inc. and Prudential Financial Inc., two of the nation’s largest publicly traded life insurers, and New York Life Insurance Co., one of the highest rated insurers in the U.S., are interested in exploring a sale of equity stakes to the government, according to people familiar with the matter.
Broad participation in the rescue program would put more power in the hands of government to reshape the finance industry. On Friday, PNC Financial Services Group Inc., said Treasury would buy $7.7 billion of preferred stock and warrants. The cash injection will help the bank purchase struggling National City Corp., a move pushed by federal regulators. (Please see related article.)
In September, the government extended an $85 billion rescue loan to giant insurer American International Group Inc. in exchange for an 80% stake.
The Heritage Foundation, which sadly supported Crap Sandwich 2.0, weighs in: “We cannot afford the stomachache such government action will give the economy, and the market system. Treasury should just say ‘no” to this temptation.”
Sing with me: I am changing my name to Fannie Mae…