National View: Gov't Sells AIG

So the time has come: AIG raised enough money to buy out the majority stake the Federal government has had for the last 4 years or so.  The BBC has the story.

This was all part of the bailout madness--banks, insurers, auto makers all needed insane amounts of cash to stave off certain collapse.  Debate STILL rages about whether or not the bailouts were necessary (Josh Mandel, for instance, carefully avoids condemning the auto bailout in his commercials but can't see why we bailed out the banks).

Personally, I'm behind how the situation was handled.  I don't think the bailouts solved any problems in our economy.  Especially in banking--the same people have the same jobs and are lobbying Congress to let them do the same things that got our economy catywonkus in the first place.

But had we let all those banks and insurers fall flat on their asses?  We wouldn't be bitching about a slow recovery--we'd be clamoring for more soup lines.  We wouldn't be grumbling about the small profit made on AIG and other stocks the government bought--we'd be moving to Canada, or Iraq, or possibly Mexico looking for work.

Institutions like AIG would most likely have survived bankruptcy.  The people responsible would most likely have been fired (or simply downsized).  And a culture of fear would have risen.  You think banks don't loan enough money now?  A bank recently out of bankruptcy protection is not one you'd like to meet.  For decades, the horror of what happened "After the Feds turned us away" would cripple the financial sector, making recovery from the housing bubble pop impossible, and compounding every other problem in the economy.

Conjecture, yeah.  There's no way of knowing what's down the trail we didn't take.  But I'm comfortable with these guesses.

Where I get irritated is the fact we have serious politicians who want to continue deregulating.  "These guys had so much rope they did actually hang themselves, and we had to cut it for them to save them from dragging us all down.  Why do you want to put shackles on their creativity?"

The bailouts were good; our inability to take steps to prevents another bailing from becoming necessary, inexcusable.

Congress, I'm looking at you.  And you.

Amateurs.