Wednesday, March 18, 2009
An additional point about the AIG mess
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.
Word.
14 Comments:
By 
, at
Wed Mar 18, 06:03:00 PM:
Exactly right TH. To those that advocated Government intervention in the private sector, this whole sorry circus is a sterling example of what results. People of my ilk that wanted to see them run through the wringer of bankruptcy can only look on in disgust.
By 
Christopher Chambers, at
Wed Mar 18, 06:36:00 PM:
Why is it a mess? I thought it was pretty cut and dry from you all's point of view. This arrogant white -faced, white collar entitlement program and the concomittant bonuses, greed are a-ok, American as apple pie. The mess occurred when Uncle Sam decided to go half ass in order to mollify, well, people like you who screamed. I would have sent Holder into court from the get go o whatever theory from quasi bankruptcy trustee to frauf to qui tam whatever and either clamored for an injunction or just plain countermanded Liddy et al (and let the little corporate tools whine).
the problem is that Barack was trying to nice...fair...rather than taking a lesson from Truman or Jackson. Now you all want to bootstrap and complain?
Regardless, it's your ilk's insouciance that's roused this populism. The anger with Obama is that he didn't go far enough; it doesn't signal a return to wingnut values. You need write gushing notes that he hasn't turned into Robespierre...lol
By , at
Wed Mar 18, 08:05:00 PM:
The government cannot be entrusted to run anything, which is why we entrust it with a monopoly on force, the most advanced military apparatus in the world, and as few checks on detainee abuse as politically possible.
Riiight.
By Big Don, at
Wed Mar 18, 08:37:00 PM:
Robespierre? Didn't he end up with severe jaw and neck pain? Obama nice? Hope? Change?
By , at
Wed Mar 18, 08:41:00 PM:
Fnord,
It was demonstrated time and again that Command Military does work and Command Economy doesn't.
Right?
By Andrew Hofer, at
Wed Mar 18, 09:04:00 PM:
Good to see the Chambers Robo-Commenter(TM) up and running. "lol"
By Andrew Hofer, at
Wed Mar 18, 09:09:00 PM:
On a more serious note, the government's best hope of being paid back is to preserve the value of the P&C and life insurance businesses, which were the backbone of the company's AAA rating in the first place. Up through the takeover, and even now, they have good core profitability and extraordinary global reach and market position. And they were supposed to be the way the taxpayers got paid back (and that was,and still is, plausible)
Nobody, including Liddy, should care if the AIGFP people stay there. That business is in run-off. You don't need to pay out $165mm to find the files.
But if you were employed by one of the companies they want to sell as *a going concern*, and you could leave, wouldn't you? It's only a matter of time before they write special tax code for you...
The government is engaged in taxpayer value destruction for political points. I think they even know it, but can't help themselves. Or as some author said "It can't be helped..."
By , at
Wed Mar 18, 11:18:00 PM:
The government cannot be entrusted to run anything, which is why we entrust it with a monopoly on force, the most advanced military apparatus in the world, and as few checks on detainee abuse as politically possible.
Are you sort of embarrassed, tigerhawk, as a semi-intellectual, to post something so easily falsifiable? I mean... dude. Postal mail arrives. Veterans recieve health care. Soldiers kill people and break things. The federal reserve raises interests rates. Let's see, we also run prison systems, several million schools.. social security checks, that, despite the hoopla, have yet to stop promptly arriving... hell, national parks. Can I stop yet?
Not all of these things work perfectly at all times, but I'm darned if I can see a failure or malfeasance rate at work here above what we're seeing in... oh... hmmm the private FINANCIAL sector?
The government failure myth makes you people look like cultists. Not that governments don't fail, often, but the idea that the fail more or less than the general pattern of near-constant failure you can observe in any organization of any kind involving people...
By , at
Wed Mar 18, 11:19:00 PM:
@ Candide: Look up "command economy" and tell me that we have one without laughing. Also, as for military command somehow being a cut above conventional governance the points are several fold. It may be an article of faith for you, but I am someone unwilling to assume the premise that is your conclusion. Given that 1) military actions are subsumed under civilian governance, (Bush overrode the Joint Chiefs,) and there is 2) basically no other entity that does what the military does to provide comparison, the picture is hardly clear to begin with. Further, 3) all the demonstrable inefficiencies of military (or police, for that matter) governance along the lines of procurement and weapons programs undermine your point. In short, justify.
By TigerHawk, at
Wed Mar 18, 11:24:00 PM:
Are you sort of embarrassed, tigerhawk, as a semi-intellectual, to post something so easily falsifiable?
What did I ever do to you that you would suggest that I might be an intellectual? That really was not very kind.
Look, everybody, there are obviously thinks that governments can do well. As Mindles suggests, anything that works reasonably well on a command-and-control model comes to mind. The problem with the current business of the government running big and complex for-profit enterprises is that basic business decisions that might well be right for the benefit of the owners (including the taxpayers in the case of AIG) are fodder for political grandstanding.
As for whether the financial sector failed or governmental policy drove it to inevitable failure, that is the subject for another post.
By , at
Wed Mar 18, 11:26:00 PM:
It was demonstrated time and again that Command Military does work and Command Economy doesn't.
Shallow on multiple levels. The USSR, for a random example, had an economy that didn't *work* only in the sense that it delivered crappier goods than the US/Western European economies, became unpopular, and was then abandoned. Using a phrase like "doesn't work" implies can't be done / sustained. It's sort of like implying that because your Porsche gives higher performance than your Toyota, that your Toyota "doesn't work".
Second, even the above set of events cannot be disaggregated from the fact that most command economies also had authoritarian governments. Then again, see Exhibit A China and Exhibit be the whole flippin' world before about 1700, Command Governments also "work" - to an extent.
The second reason why this is a shallow point is that every corporation in America is run as a Command Institution. that's actually a source of some of their problems. Hierarchical authority trees have problems, but they work 'correctly', more or less, billions of times a day. And markets work well at many things, but also "fail" drastically - like they're failing right now.
By , at
Thu Mar 19, 12:26:00 AM:
I guess the SOX comment struck a nerve.
By TigerHawk, at
Thu Mar 19, 12:38:00 AM:
I have a long track record of tolerating personal insults in my capacity as a blogger in these comments. I appreciate that is the game here, and I exercise a much lighter hand on the delete button than the vast majority of bloggers who take comments. I do not appreciate, however, ad hominum attacks on me in my professional or personal life. That is crossing a line that is well understood in the blogging world, even by the lefty commenters who would love to string "TigerHawk" up in the old oak tree.
By , at
Thu Mar 19, 01:20:00 AM:
Regarding all the smoke and mirrors put forth by 'Fnord' and 'glasnost' all I can say is, while hammers are extremely useful to drive nails into walls they are are not at all applicable when washing dishes.
