Conservatives attack Bush on AIG bailout

WASHINGTON, Sept. 18 (UPI) -- Conservatives attacked Republican U.S. President George Bush for approving the Federal Reserve's $85 billion takeover of American International Group Inc.

Conservatives decried the bailout -- the third this month, after the government's takeover of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. -- as a betrayal of the party's free-market philosophy.

"You can't be for capitalism on the way up and socialism on the way down," former U.S. House of Representatives Speaker Newt Gingrich, R-Ga., told The Washington Times.

U.S. Rep. Mike Pence, R-Ind., said, "If government now becomes the safety net for every private enterprise too big to fail, we are going to end up with an economy that looks a lot more like France than like the United States."

Even some liberals questioned if the unprecedented taxpayer bailout was fair.

"You are clearly helping some people to the detriment of others and you're creating perverse incentives," liberal think tank Center for Economic and Policy Research Co-director Dean Baker told the Times.

Bush defended the AIG bailout Thursday, saying the firm's failure "could have caused a severe disruption in our financial market and threaten other sectors of the economy."

He added Washington was ready to make more moves to help financial markets deal with the "serious challenges" stemming from the long-running credit crisis.