The View From 1776
AIG Employees’ Side of the Story
The President, Congress, and the attorneys general of New York and Connecticut have damned AIG’s bonus recipients, without any consideration of fairness, and without even a gesture in the direction of due process of law. Their motto is, “My mind is made up. Don’t confuse me with facts.”
- Jake DeSantis was unfairly treated so he is giving his 3/4 of a million dollars "retension payment" to charity. That'll show 'em. Go Jake!
- The current administration and congress are doing their best to instigate a full fledged class-war. They
- Based on his letter, Mr. DeSantis seems to be an honorable man. They are hard to find these days.
Posted by Jim on 03/27 at 02:37 PM
- "Anyone who believes the politicians can do a better job constructing a healthy economy than the people they want to replace or manipulate in the financial world is in for a very rude awakening."
Larry, You have invented a 'rude awakening' that is not applicable. Today's politicians don't want the job of creating a health economy. They just want to reestablish the environment in which ordinary people will themselves recreate a healthy economy. It has always been government that first establishes the favorable circumstances and the common sense in which a healthy economy can and will flourish. There is no exception this time around.
I am thinking of Reaganomics, which virtually laid the groundwork for today's economic crisis, with it supply-side economics. It started the ball rolling towards the excesses that have now hobbled the economy. Reagan used to say that government was the problem. Ironically he was correct because his type of hands-off governance approach greatly precipitated the economic culture that has brought America to its economic knees. Government is the problem if it neglects its fiduciary duties.
You are right about a rude awakening descending on use. However, that awakening was delivered by the last administration's antics - not this one, which finally showed Americans what a dereliction of duty on the part of government can do in destroying an economy. That rude awakening also has shown that unfettered capitalism is, in the long run, a dangerous and destructive force. Now it is only government that can pick up the pieces because it, like always, is the means of last resort.
- David, David, Daivd... The current economic problems really have little to nothing to do with capitalism insofar as an economic system is concerned. There were many issues leading up to the current state of affairs, but I'll use a more recent and notable example, the housing market collapse.
For years, decades even, lobbyists have pressured Congress and large lending institutions to approve a greater share of the sub-prime housing loan applications. As I'm sure you will recall, the housing market collapse we precipitated by the collapse of the sub-prime mortgage market. These sub-prime mortgages were underwritten by insurance agencies, like A.I.G., guaranteeing their viability, should the borrower default. Fannie Mae and Freddie Mac were the first to be hit when the defaults and foreclosures began in mass. They in turn attempted to collect on their failed "insured" sub-prime holdings, only to find what we have known all along. Insurance is basically a legalized type of ponzi scheme. Social Security and Medicare would be other examples of legalized ponzi schemes. Such systems can only take so much strain at any given time; they bet on the unlikely occurrence that claims will ever reach a threshold significant enough to overwhelm the system. When Fannie Mae, Freddie Mac, et. al. began cashing in all at once, the system went bust.
Regardless of who the backer is, there are only two ways to handle a problem like this: 1) allow the defaults to take their natural course, or 2) increase the supply of money, which is the course of action our government as decided to take. This is simple Economics 101, supply and demand. As the supply of dollars goes up, demand for goods and services go up (people and businesses have more dollars to spend). In turn, prices for said goods and services go up because supply lags behind demand, and there is not enough supply to meet demand. Higher prices, lead to higher profit, and higher costs: materials and man-power. More people are hired and wages go up.
This all sounds good, that is, until you realize that we've just come full-circle injecting another dose of dollars into the economy with the increased salary outlays. This is exacerbated if demand has not yet caught up with supply. The cycle repeats. Each time through this cycle the supply-demand gap increases, and prices shoot up by a greater percentage. This is how hyper-inflation happens. The next stop on this train ride to disaster is total economic collapse.Posted by Jim on 03/27 at 04:42 PM
- Mr. Airth:
I value your comments, even though I usually disagree with them.
I have taken the liberty of posting a lengthy respse to your comment above. It's to be found here: