[ExI] AIG Bail out

[Max More]

The "people" do not own 80% of AIG. The federal government (which is 
NOT the people) *loaned* AIG $85 billion, to keep it going as new 
management sells off its businesses. You can say, loosely, that the 
government now *controls* AIG indirectly, but not that it owns it. 
Unless the transition is badly botched, only part of that $85 billion 
will be a cost to the taxpayers.

To add to my previous comment (barely post-waking-up): The knee-jerk 
finger pointing at markets at the problem is frustrating. Yes, it's 
entirely possible that problems can arise in financial markets 
through poor decision making and herd behavior. But such problems 
will usually reveal themselves before they grow as large as the 
recent Western financial problems. They only grow monstrous if the 
government won't allow the fuse to blow.

The anti-market types blame markets without reservation, despite the fact that
--the Federal Reserve, formed by the government, played a central 
role in the financial crisis with its insistence on keeping interests 
too low for too long.
--Fannie Mae and Freddie Mac are government-formed institutions that 
were given a legally-enforced monopoly over "conforming loans." 
Political pressures have distorted the market by pushing money to 
borrowers who wouldn't otherwise have received them.
--By bailing out AIG but not Lehman, the government will create 
additional financial uncertainty.

The economy will only grow more complex in the future. I find it 
disturbing how so many of us still run to Great God Government for 
top-down solutions to the intricacies of complex economic systems.

Max





At 02:34 AM 9/18/2008, you wrote:
>If the American people now own 80% of AIG, the world's largest 
>insurance company, does that we mean we get to have nationalized 
>healthcare now? Or are AIG's customers going to have to continue to 
>pay premiums to be eligible to file any claims that will end up 
>being paid with their own tax dollars?
>
>Stuart LaForge