AIG: The Biggest Bailout

HOMO HOMINI LUPUS

... nothing new under the sun...

bart of AL @ Sep 18, 2008 09:47:06 AM

The AIG Bailout

I see a lot of ranting and raving about the bailout being a handout for "the rich", but I see little or no intelligent comment or understanding of the issues. While I'm an ardent supporter of free markets, the Great Depression (of the 1930s) taught us that some prudent regulation of the banking and financial industry is needed. Unfortunately, that regulation has become politicized to the point that it has contributed significantly to today's situation. Without condoning practices such as "redlinging" that effectively shut many minorities out of the housing market, I believe that lenders were, if not forced, at least strongly encouraged by regulators to lend to people who were unable to carry the debt. Now, having helped to create the mess we're in, we the people, through our government, have an obligation to help with the clean-up.

Having said all that, the takeover of AIG to prevent its failure protects millions of ordinary people who depend on their insurance companies to protect them from financial ruin. The failure of AIG would cause the failure of many, if not most insurance companies and the fallout would throw this country, and maybe the entire world into a deep, deep economic depression. It's worth putting up a few billion dollars of our tax money as collateral to prevent that from happening. And, if successful, then the loan will be paid back to the government (although as taxpayers, we still won't be able to get our hands on our own money).

Bob Wilkerson of GA @ Sep 17, 2008 20:11:49 PM

"arcitechs"

Hi, my name is "jon of OR". Me am a illiterate more on whoo kant spell.

You's say “architect” and me says "arcitechs".

You's say “lurking” and me says "lerking".

You's say "cronies" and me says "cronnies".

Me kant uze ottomatic spellcheck, butt I are smart. I uze comptutor. I are a winnar.

An idiot and probably an eligible voter. YAY!!! Go America go!

n1njabot of CA @ Sep 17, 2008 17:49:34 PM

Federal reserve or Goverment?

Correct me if I'm wrong,but the Federal Reserve Bank is not a Government Branch. It is about as Federal as Federal Express, So why is it reported everywhere as the Government put up the money?

Sterling of CA @ Sep 17, 2008 17:46:07 PM

I though "Forcloser " Phil graham had deregulation figured out?

Alan Greenspan and Phil Graham (McCains' economic adviser) are the arcitechs of this mess.

I was under the impression that deregulation meant "the market (economy) takes care of itself, no government intervention.

What is the Bush/Cheney plan for these gov. controled firms?

Republicans hate regulation and oversite, so I think there is something lerking in the "Shadows if you will".

Is there a hope that McCain will win the Whitehouse then Frannie, Freddie, AIG and other controlled firms can be privatized again by turning them over to cronnies and ran from Dubai or other oversea "safehavens".

If you control the worlds' stongest ond largest financial/investment entities you infact control everything (including the government)

jon of OR @ Sep 17, 2008 16:19:51 PM

AIG Bailout

There are so many valid points already noted that it is hard to decide exactly where it is I should begin to agree.

First of all, Wall Street players and conglomerates have for decades complained that Uncle Sam was meddling in their affairs. They were, in essence, left to their own devices and subprime mortgages, gas gouging at the pumps, corporate bankruptcies, and federal “bailouts” are the result.

Now corporate America, and AIG in particular, is knocking on Uncle Sam’s door not as a confident and strong presence in the financial world, but more like the orphan Oliver Twist - hat in hand - saying “please sir I’d like some more.”

Let’s be honest and realistic. "Bailout" is word being thrown around and is misleading to the general public. AIG will not survive as is. The government has loaned them enough money to allow them breathing room in order to hold a nothing less than a 'corporate garage sale.' They'll sell subsidiary companies and other assets in hopes of avoiding the financial tidal wave that would have resulted had they filed under Chapter 11. In short, the Titanic has struck an iceberg - and we're bailing out water one teaspoon at a time trying to save her.

In fact, if they can’t sell those subsidiaries - let's face it the market is down and if sold they'll be at bargain basement prices - or they are unable to pay their debts, they may still have to declare bankruptcy.

Corporate Management, CEOs, Presidents, etc. should all be held financially accountable. In my opinion, their decisions to greenlight an unsecured loan to people who, under established banking practices, would not qualify for that loan is inexcusable. Furthermore, to allow these bad financial investments to be sold on Wall St. as investment options is beyond comprehension.

Even the untrained eye could see that lending money to people that did not have the financial means to pay it back is nothing less than ludicrous financial roulette; therefore, investment houses and brokers alike should have investigated these 'questionable practices' directly and not relied on general market opinion alone in their decision to invest other people's money.

In essence, AIG will will have started this calendar year as the proverbial lion and will go out like a meek lamb gasping for breath. Shareholders will lose billions, the taxpayers will lose billions, corporate workers will lose their jobs, despite the fact that many have been there longer than the CEOs, and corporate management will walk away with severance packages in the tens of millions of dollars.

CEOs, Chairmans, and other corporate management titles have been granted a license to rob for far too long! An overhaul of the financial system is not only warranted — it must now be demanded.

lee @ Sep 17, 2008 15:24:08 PM

AIG Bailout

What will happen to the "golden parachutes" for the CEO and other AIG execs who are now displaced; I would hope the fed bailout stipulated they are out on their butts with none of their contractual perks.

BFox of NV @ Sep 17, 2008 14:56:45 PM

Separation between Business and State?

Why are OUR hard-earned dollars (in the form of taxes) bailing out a private enterprise? It defeats the whole purpose of the free-market system: business bears both the gains and the risk, not just the gains. Why should AIG be taking money from all our pockets to pay for their own business mistakes? This is not democracy, it's socialism!

Russ of CA @ Sep 17, 2008 12:27:40 PM