Tuesday, March 17, 2009

Larry Kudlow Gets It Right On AIG Outrage

This whole huge AIG mess boils down to this: the government has no business---none, zero, zilch--- getting into the business of saving an un-savable mega business like American International Group from failing. And when it, the government, tries and fails and then acts as if it should have turned out differently, it's utterly ridiculous.

As Larry Kudlow says, The government shouldn't run anything because it can't run anything.

Kudlow continues,

"This whole AIG fiasco — where the entire political class is suddenly screaming over bonuses paid to derivative traders in AIG’s financial-products division — is just a complete farce. What it really shows is how the government has completely bungled the AIG takeover.

"Blame the Bush administration and the Obama administration. It also shows, once again, why the government shouldn’t run anything, because it cannot run anything.

"AIG should have been placed in bankruptcy last fall under some sort of government sponsorship. While in bankruptcy, all the salary contracts (and every other AIG contract) would have been nullified and voided. At the same time, there would have been an orderly liquidation and sale of AIG’s assets and separate divisions.

"But as things stand now, there still is no clear road map for the dissolution of AIG. There are ideas, but nothing is set in concrete.

"And as for the $165 million or so in AIG bonus payments, the Obama administration — including the president, Treasury man Tim Geithner, and economic adviser Larry Summers — knew all about them many months ago. They were undoubtedly informed of this during the White House transition. So there’s no big surprise. Nobody should be shocked.

But President Obama is doing his best play-acting ever. He knows full well that the nationwide outcry against federal bailouts and takeovers is only going to get worse on his watch. His poll numbers are already falling, and this AIG episode is going to pull them down more."

Amen, Larry. Obama and Congress are play-acting and doing their best righteous indignation mimes to save their own asses. They haven't a clue what to do. And it's not like they didn't know the bonuses were coming. Read Larry's whole piece, AIG Outrage, and know that the mess is far from over. And that Tim Geithner's days are fortunately numbered as a result. He should never have been confirmed as Treasury Secretary. Ever. Nor should the government bureaucracy ever get into the business of running big business. It has never worked and never will.

The real question is how much of our money will be thrown down the toilet in the process of the government trying and failing to save and supervise AIG?

We should all be utterly outraged.

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