Wednesday, September 17, 2008

Bailout Part 2 – A Vicious Cycle

A novice, armchair-economist’s look at the AIG bail out:

1. AIG is a very large insurance company that insures both homes and business real estate.
2. AIG got caught up in the mess of the sub-prime lending crisis along with most of the other companies which are collapsing at the moment, proving that you cannot beat the fundamentals of economics.
3. So now the Federal government is bailing them out to the sum of 80+ Billion Dollars.
4. The federal government in the United States is supposedly “by the people, for the people…”
5. So who is insuring who? And worse what kind of business practices does this encourage in real estate and insurance and investing? Why should any big time investment business bother trying to deliver anything to the American people when they can enrich their pockets by reckless risk taking and fiscal stupidity?
6. So it appears that you and I along with every other American are now in the insurance business, without all of the hassle of having any input in petty day-to-day of running a multi-billion dollar company.

1 comment:

Will said...

I think the American people lost its voice long ago--if it ever had one, that democracy is an ideological distraction preventing people from realizing they are only along for the ride and to both government and big business we are a simply a resource, not a party to which respect and responsibility are owed. My coined term for what we live in a legal aristocracy, not a democracy.