Since when did the right like to nationalize corporations?

When they realized there was no choice, it seems:

American International Group will get an $85 billion bridge loan from the federal government in exchange for an 80 percent stake in itself, sources have told CNBC.

Sources said the loan, which will allow AIG to avoid bankruptcy, will be secured and include incentives for quick asset-sales by AIG.

Government warrants for most of AIG’s equity will severely dilute existing shareholders.

AIG has been racing the clock to avoid a bankruptcy filing on Wednesday, making efforts to work out a deal with the Federal Reserve to shore up its finances.

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke met with Senate and House leadership Tuesday night to discuss how to assist AIG, sources said.

The Fed's financial aid to the troubled insurer marks a reversal of its decision on Monday to refuse a bridge loan to AIG.

The Fed met with the company's advisers throughout the day and came to a better understanding of what is needed to help the company through its current crisis, people familiar with the negotiations told CNBC.

From here, via The Outback Oracle at iTulip. Don't get me wrong; there may not have been any alternative. It's funny, though, how laissez-faire capitalists are suddenly willing to socialize losses. Of course, if and when AIG returns to profitability, the US government will probably sell it off rather than keep it as a source of revenue. After all, it wouldn't do to have an example of how continued public ownership could be good. Instead, the American taxpayers, having absorbed the enormous losses, will be spared the indignity of actually turning a profit later.

In any case, one does have to ask one thing. How long can they continue doing this? If they keep bailing out every company that's too big to fail, they'll have to do one of three things -- raise extra revenue through taxation, cut back on spending on other things (such as their military adventures overseas) or run the printing presses like crazy. The first two would be the best policy of course, but somehow I suspect the third will be the way they actually do it. Of course, such a policy is insanely inflationary, but they may be hoping that other countries will devalue their own currencies so the Yanks can keep buying what they're selling. Unfortunately for them, this won't continue indefinitely.

And, in spite of everything, the prices of gold, silver, and other traditional hedges against inflation remain fairly reasonable. If you can afford to, consider buying them while you can; things might get exciting quite soon. Like, any time after the 4th of November.