The United States Government’s bailout of insurance giant AIG has me perplexed.
For a country that is bills itself as the shining example of not only a democratic government, but a free-market economy, I don’t fully understand why over the last few weeks our Federal government has deemed it necessary to step in and save failing businesses. That sort of behavior seems economically
antithetical.

What the government did for Fannie Mae/Freddie Mac and Bear Stearns, while slightly distressing, at least amounted to only trying to find a way to keep those organizations upright. It was a slightly perverted form of corporate mediation, if you will. The AIG deal, from where I sit, looks like a straight up hand out of cash to keep the company afloat. But in all cases the steps taken by the U.S. Government amount to governmental intervention to the private business sector.
This sort of government meddling certainly seems to run counter to the ideals of a free-market, but if these few bailouts helps the overall economy from a total meltdown then I am more inclined to go along with the decisions.
Except for one thing – the $85 billion loan to AIG.
The Mayor of Chicago, Richie Daley, is known for eccentric and off-kilter press conferences and public appearances. Even after almost 40 years in public service (almost 20 of those as the Mayor of Chicago) he still has a way of speaking that calls to mind somebody’s crazy uncle.
Despite all that, I thought
his recent comments offered in response to the AIG bailout reflected my own thoughts on the subject.
"$85 billion, that's your money. I mean, it's all of our money. I don't know where they get it. It's really interesting. They just print it or something.
"I feel sorry for people of America, what's happening to us. We don't have enough money for education but we have enough money to bail every problem on Wall Street that was not created by any of us. It was created by a number of people. And they all get their fees. Everybody got their fees. Everybody got taken care of. They all got their salaries. They all got their fees. And all of a sudden the taxpayers have to come up with this."
What frustrates me the most about this situation is the
news that the SEC allowed five firms – I’ll let you guess who – to be exempt from rules that would have prevented these companies from leveraging themselves into the holes they have ended up in.
The SEC exempts a select few companies from certain regulations designed keep financial institutions from sitting on too shaky of ground, and when those same firms threaten to bring the U.S. economy to its knees as a result, the government rushes in to prop them back up with tax payer money.
I hope that two years from now, when I no longer have money to buy fuel, milk, or clothes because of an economy in shambles that AIG and these other firms will step in to reciprocate the help I unwilling provided them last week.