US to bail out AIG to the tune of $85 billion--Rilly?

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  1. profile image0
    pgrundyposted 14 years ago

    I guess the Fed felt like it had no choice but to pull this latest giant intervention out of its butt at the 11th hour, but our national debt is twice what it was last year even without Fannie & Freddie included and now we're going to throw 85 BILLLION at this irresponsible insurance company because we don't know what else to do?

    That decision was made by a guy who does not even work for a government agency--Benjamin Bernanke, the Chairman of the Federal Reserve. The Fed is a private organization supported by other banks. So where does he get off putting ordinary Americans on the hook for $85 billion without any discussion or oversight? At what point do these federal bail-outs lose all meaning? Isn't it kind of like the blind leading the blind at this point? Here we are, the U.S., in debt up to our eyeballs, but we step in and say "Don't worry multi-national corporation! We are here to save you! Have no fear!"

    Rilly? How? How are we going to save them? I personally am having trouble paying for gas and keeping groceries in the house. Honestly, where does it end?

    Is anyone else getting sick to death of these guys and their nonstop money dramas?

  2. crashcromwell profile image69
    crashcromwellposted 14 years ago

    My theory on this is that it's probably a good idea to help these corporations, not because they deserve it but because the fallout on the American public would be so profound if they fail. However, the real problem that needs to be addressed is the climate that allowed these major corporations to get into this mess in the first place. People run corporations, and people make mistakes. Neocons would like to believe that all regulation is anti-capitalism, but I think we need to strike a happy median somewhere. We're paying the price for going too far in one direction.

  3. knolyourself profile image61
    knolyourselfposted 14 years ago

    "On November 4, 1999, Congress passed sweeping legislation that will dramatically reshape the financial services industry by removing barriers between banks, insurance companies, and investment firms which have existed since the Great Depression. President Clinton is expected to sign this historic legislation."

  4. Misha profile image64
    Mishaposted 14 years ago

    You mean it was not evil republicans who did that?! yikes

  5. knolyourself profile image61
    knolyourselfposted 14 years ago
  6. Misha profile image64
    Mishaposted 14 years ago

    Oh, so you are saying it was bi-partisan decision, right?

  7. profile image0
    pgrundyposted 14 years ago

    I think there's plenty of blame to go around. No one has been regulating financial markets for 25 years now--The promise has been deregulate, the market will correct itself, the free market is self-regulating, all that Reaganomics blather, for years and years. Democrats did nothing to reign in Fannie & Freddie because too many of them and their lobbyists were making good money on that stock before the bubble burst, but before that even happened, Republicans were singing the "free markets regulate themselves" mantra for most of a quarter century. Now we are seeing that theory disproved in bold strokes. Unfettered Capitalism leads to, well, this kind of a mess.

    So there will be lots of time to assign blame as we stand in breadlines. But the real question is how is it going to get fixed? Right now the market is tanking again and credit is freezing up all over the world. Russia had to stop trading today because their market was in free fall. The AIG bail-out could help but that is by no means assured. Even an orderly sell-off of AIG assets could have long term devastating effects for the world economy. It bothers me a lot that our government just jumped in and took over a multi-national giant corporation with no input from Congress or the American public. How many of these bail-outs are we going to see this year?

  8. Misha profile image64
    Mishaposted 14 years ago


    I pretty much disagree. On a couple of accounts. First I am with republicans on free markets regulating themselves. The markets NEVER been COMPLETELY free in US, let alone the rest of the World. Letting markets free is scary as hell to any government, and I don't think we are going to see this, neither our children and grandchildren alike. The bottom line - this theory has not been disproved, cause it never been tested - and I doubt it ever would.

    Second, before trying to fix something, it my be useful to try and understand WHY it does not work. Like you can change a bulb as many times as you want, and it's not gonna help if there is no power smile

    1. profile image0
      pgrundyposted 14 years agoin reply to this

      Hi Misha.

      Well, I agree that no one seems to understand what is going on right now, and that makes it a lot harder to fix, but I guess we disagree on the totally free markets thing. I can see why you would have that perspective, but since, as you say, it's never been completely tested, it's kind of like a perpetual motion machine. In theory some feel it should work, but it seems never to happen in practice--things go wrong way before we even get around to building it.

      One thing I would like to see come out of this is more self-reliance and more people working for themselves. I'm about a millimeter away from doing that myself right now. I'm sick of working for big corporations whose values are opposite my own, doing work I hate so their CEOs can get richer. After my 2-day health issue in May I see that the "health insurance" that seemed so important and valuable before I got sick is actually rather worthless since 1) they don't want to actually have to pay for anything should you need to use the insurance, and 2) the medical care here is so bad it's dangerous to even use it unless you are about to croak.

      So it's just a matter of getting my better half comfortable with the idea of me working on my own. Once we get mutually agreeable, I'm never going back. big_smile

      1. Misha profile image64
        Mishaposted 14 years agoin reply to this

        Yeah Pam,

        I do agree, we all are responsible for that. We allowed the corporations to take over us. The less people depend on them, the less power they have smile

  9. knolyourself profile image61
    knolyourselfposted 14 years ago

    It all happened before and was called the Great Depression. It was all fixed with regulation by FDR, and
    ever since these regulatory safeguards little by little were dimantled with the mantra of the unfettered free market, with present day result. The S&L scandal of the 80's
    was cause by deregulation. There is no mystery about it.

  10. crashcromwell profile image69
    crashcromwellposted 14 years ago

    The problem with the notion of striving for a purely deregulated environment is that it could never happen. Nothing pure or perfect ever materializes on paper. Russia was a Marxist state, but never approached Marx's ideal vision for a communist state. The United States, the alleged champion of Democracy is not a pure democracy, not even close. We are also not a purely capitalistic state, and nor do I think that would be a goal we should try to achieve.

    I tend to be a middle of the road kind of guy, though obviously people who know my politics will attest that I trust the left far more than I trust the right. I've often felt that the best economic system would combine the production capacity of the capitalist world with the distribution methods of the Marxist philosophy, so there could truly be a level playing field. I am realistic enough to understand, though, that the chances of that happening are slim to none.

    1. profile image0
      pgrundyposted 14 years agoin reply to this

      I think I'd be happiest in one of those Scandinavian socialist sorts of countries where it's hard to get fabulously wealthy but you also can't fall too far. I just want to be able to do work I care about instead of selling my time. I don't care if I ever get rich or not, as long as I have a roof over my head, can see a doctor if I'm sick, eat regular meals, and have meaningful work I care about.

      I know most people have lots  of ambition though, so we won't be seeing such a system here anytime in the near or distant future.

    2. Misha profile image64
      Mishaposted 14 years agoin reply to this

      Well, if you mean communists in Russia did not manage to make women a common property and failed to put EVERYBODY into labor armies (read concentration camps), you are probably right. I really doubt it would have changed the outcome it they managed big_smile

      Other than that, they successfully implemented all of Marx's ideas, as far as I'm aware smile

      Ooops, no. They failed the major thing, and that actually led to the crash - they failed to conquer the World...

  11. knolyourself profile image61
    knolyourselfposted 14 years ago

    Actually the world is rife with unregulated capitalism. Generally it is known as the Mafia.

  12. hubby7 profile image65
    hubby7posted 14 years ago

    I'm enjoying all of your posts. Pure capitalistic systems, pure communistic systems, and pure free market systems are all utopians. They just do not exist in real life. They all run up against practice, which alter their would-be pure, theorectical forms. The closest we can get to those states are mere approximations.

    As to $85 billion bail-outs, only history can tell whether it was a good idea or a bad one. Notwithstanding what I just said, my thinking on this matter is in congruence with crashcromwell. I think it ultimately prove to have been good for the whole--government and the financial markets.

    If all of what I said is unclear to you, do not fret, it's just as unclear to me. I admit that I am no expert in these matters. :lOl:


  13. Make  Money profile image67
    Make Moneyposted 14 years ago

    I think we have come to the conclusion that both far right and far left ideologies are just pie in the sky ideas that won't work.

    We are witnessing a free market society collapse because of deregulation.

    We have witnessed a communist collapsed because of a lack of initiative.

    I believe it's time to give up on both of these far right and far left ideologies and strive for a middle of the road approach.


  14. JYOTI KOTHARI profile image60
    JYOTI KOTHARIposted 14 years ago

    I am quite agree with your views Mr. Pgrundy. The Govt. is also playing in the hands of big corporations. Oh! its an election year too. Govt. is taking popular measures which will in turn ruin the economy.
    Russia implemented Marxism successfully??? At what cost? How many millions of Russian people killed in Stalin era?

    Countries like India adopted a mid path successfully since last 60 years now gradually it is opening up (in US pressure?).
    Jyoti Kothari

    1. Make  Money profile image67
      Make Moneyposted 14 years agoin reply to this

      Just about 62 million, mostly Christians between 1917 and 1987 JYOTI.

      We never hear about that holocaust.

  15. knolyourself profile image61
    knolyourselfposted 14 years ago

    "Rummel, 1990: 61,911,000 democides in the USSR 1917-87, of which 51,755,000 occurred during the Stalin years. This divides up into:
    1923-29: 2,200,000 (plus 1M non-democidal famine deaths)
    1929-39: 15,785,000 (plus 2M non-democidal famine)
    1939-45: 18,157,000
    1946-54: 15,613,000 (plus 333,000 non-democidal famine)
    TOTAL: 51,755,000 democides and 3,333,000 non-demo. famine"

  16. JYOTI KOTHARI profile image60
    JYOTI KOTHARIposted 14 years ago

    I am greatfull to you for providing data.

  17. Make  Money profile image67
    Make Moneyposted 14 years ago

    The data is from this site JYOTI.

  18. Reealjrd profile image61
    Reealjrdposted 14 years ago

    Ye its a better idea to help out these corporate sectors. Because these corporate sectors are very helpful to fill he joblessness in the country. These corportae sectors also help in the development and progress of the nation as well through these cororate sectors people learn to leave a corporate world and enviroment.


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