Thursday, September 18, 2008

U.S. government 'forced' to bail out AIG: McCain

U.S. Republican presidential candidate John McCain seems to have softened his stance on the government's $85-billion overnight bailout of American International Group.

The Federal Reserve rode to the rescue of the ailing company late Tuesday, offering a two-year, $85-billion loan to AIG, the country's largest insurer, in exchange for an 80 per cent stake in the company.

Although he flatly rejected the idea of a taxpayer-bailout for AIG on Tuesday, McCain said Wednesday the government had no choice, treating it as a necessary evil needed to help Americans.

"The government was forced to commit $85 billion," McCain said in a statement. "These actions stem from failed regulation, reckless management and a casino culture on Wall Street that has crippled one of the most important companies in America.

"The focus of any such action should be to protect the millions of Americans who hold insurance policies, retirement plans and other accounts with AIG. We must not bail out the management and speculators who created this mess."

McCain repeated his call for a high-level commission, such as the one that investigated the Sept. 11, 2001, attacks, to review the economic troubles on Wall Street.

His Democratic rival for the U.S. presidency, Barack Obama, has dismissed the need for a commission to study the country's failed economic policies which, he says, McCain helped to create.

Obama blamed the Republican anti-regulatory fervour of recent years for part of the financial mess, saying the crisis is "a stark reminder of the failures of crony capitalism and an economic philosophy that sees any regulation at all as unwise and unnecessary."

Both Obama and McCain launched new television ads Wednesday that target the country's economic woes.

With files from Associated Press

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