I try to avoid politics on this blog. I have made very few political comments and most of those few are highly sarcastic even if rooted in my true feelings. For example, these are two posts I made on the Presidential election last fall.
Anyways, in both of these I said we had a broken system in which candidates can make all kinds of promises but really only end up focusing on the money. I think we can see the truth in that now, but that isn’t really the point of this post. I was reading an article about the $165 million in bonuses AIG has paid out in the past weeks. I am very angry about the whole deal because we shouldn’t have bailed them out in the first place. I know that many believe that we must or the entire financial system will fail but the truth is that other institutions that didn’t mess around with poor financial models like that will benefit and grow stronger thus showing that smart business wins in the long run in capitalism instead of training people to make money at any cost so the average guy can pay for the stupidity of the rich.
The part that worries me the most is this statement.
The development came as a wave of Congressional condemnation greeted Mr. Liddy on Wednesday over the bonuses paid to company executives, with some lawmakers vowing to do something to get the money back.
“We are the effective owners of this company,” said Representative Barney Frank of Massachusetts, the chairman of the House Financial Services Committee, going on to suggest a lawsuit to recover the $165 million in bonuses. “I think it’s worth trying.”http://www.nytimes.com/2009/03/19/business/19web-aig.html?_r=1&partner=rss&emc=rss&src=igw
The congressman is saying that congress (aka the government) now owns AIG and so should control them. This is a small step that leads to actual government control of everyone that takes advantage of the bailout money.
I am against the bailout in general but it is out there. We cannot continue to help out businesses with a failed model like AIG but we can’t turn around and let the government set a precedent by actually taking ownership of the business. This is a very slippery slope that we are now on. My advice (as if anyone in the government would listen to me) is to walk very slowly and carefully to a safer place. Having walked on many icy hills I’ve found that to be the best way to avoid breaking my skull open.