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I think the real loss to the public occurred when AIG was bailed out and GS got paid over $10 billion they would not have gotten if AIG had been allowed to fail

I think the real loss to the public occurred when AIG was bailed out and GS got paid over $10 billion they would not have gotten if AIG had been allowed to fail. And it should have been allowed to fail in my opinion. There would have been a lot of pain and other failures, but those are the risks of playing these games. If you protect people from all of the ultimate costs of doing things that are rewarding in the short term most of the time, but incredibly risky overall, they will keep doing them! And we will all pay a huge price for these parasites eventually if we don't wake up and stop subsidizing them.

ericd 17y ago
Letting a massive insurance company fail, and then letting dependant, blameless companies explode in a wave of secondary explosions throughout the economy as a result is not good national-level policy. There's a reason the govt. didn't let that happen, and it's not that they wanted to bail out their buddies. I'm for criminal charges for those that committed fraud, investigations, more regulation, and so forth, but this "We should have let them crash and burn, damn the consequences" idea was not likely the best course of action, though it seems to be a pretty common attitude for some reason.
- stretchwithme 17y ago
  Its not about blame. Its about taking risks and suffering the consequences. When you pick a vendor, a bank or insurance company, there's a chance that entity will fail. You're the one who has to judge that. It's not the government's job to protect you from failing to do that, especially when others took the time to assess the vendor and decided to use a more stable, smarter company. And its certainly not the job of government to take the consequences from those that misjudged their bank or insurance company and assign those consequences to others that had nothing to do with the decision. I am not "damning the consequences". The consequences are unavoidable. Its just a question of who should pay for them. Do we leave the consequences with those making the decisions that led to them? Or do we dump them off on everybody else?
  - ericd 17y ago
    With regard to "I am not "damning the consequences". The consequences are unavoidable." This is not a zero-sum game within the US. Some courses of action have much larger consequences overall than others, and the one you are advocating seems likely to have had a relatively high overall cost to the system of the economy compared to the one the govt. chose, at least in the short term. The government has been trying to keep the ship sailing as smoothly as possible, as is their general responsibility, despite the unsavory nature of bailing out some of those responsible. I believe that was viewed as a necessary evil.
- robryan 17y ago
  How many companies got AIG to insure there junk mortgages though fully expecting them to default? Wouldn't exactly call them blameless.

ericd 17y ago

Letting a massive insurance company fail, and then letting dependant, blameless companies explode in a wave of secondary explosions throughout the economy as a result is not good national-level policy. There's a reason the govt. didn't let that happen, and it's not that they wanted to bail out their buddies. I'm for criminal charges for those that committed fraud, investigations, more regulation, and so forth, but this "We should have let them crash and burn, damn the consequences" idea was not likely the best course of action, though it seems to be a pretty common attitude for some reason.

stretchwithme 17y ago
Its not about blame. Its about taking risks and suffering the consequences. When you pick a vendor, a bank or insurance company, there's a chance that entity will fail. You're the one who has to judge that. It's not the government's job to protect you from failing to do that, especially when others took the time to assess the vendor and decided to use a more stable, smarter company. And its certainly not the job of government to take the consequences from those that misjudged their bank or insurance company and assign those consequences to others that had nothing to do with the decision. I am not "damning the consequences". The consequences are unavoidable. Its just a question of who should pay for them. Do we leave the consequences with those making the decisions that led to them? Or do we dump them off on everybody else?
- ericd 17y ago
  With regard to "I am not "damning the consequences". The consequences are unavoidable." This is not a zero-sum game within the US. Some courses of action have much larger consequences overall than others, and the one you are advocating seems likely to have had a relatively high overall cost to the system of the economy compared to the one the govt. chose, at least in the short term. The government has been trying to keep the ship sailing as smoothly as possible, as is their general responsibility, despite the unsavory nature of bailing out some of those responsible. I believe that was viewed as a necessary evil.
robryan 17y ago
How many companies got AIG to insure there junk mortgages though fully expecting them to default? Wouldn't exactly call them blameless.