Time to buy stock in AIG

No, not the company, the letters. Surely over the past two days these three letters have been worn nearly through on the keyboards of reporters, bloggers, newspaper typesetters and Presidential Teleprompter Input Specialists. OK, they are probably Presidential Teleprompter Input Czars as that seems to be the title du jour in the Obama administration.

It is amazing the amount of anger, disdain and vitriol being put forth by average citizen and elected official alike toward AIG. In the case of the former it seems like class warfare and in the latter it is political expediency and advantage.

With so much being written about this topic, I am wondering why I am bothering to add my few pennies to the discussion. I guess it is to serve as a bit of a reality check. Let's look quickly at the two aforementioned angry mobs busily pitching their torches and grabbing their permanently pitched forks in preparation of a march on Castle AIG to exact 160 million pounds of flesh from bonus recipients and slay this monstrous practice of fulfilling a contract.

Yes, that is right. AIG, in paying these bonuses, was fulfilling a contract they had with their employees. We can pass judgement as to the morality of paying bonus money to individuals who performed their duties so poorly they caused the near collapse of their company and on those same individuals for taking the payments. It is right for us to ask for the money to be returned based on this alone; not for moral reasons but to assuage the fraud perpetrated in these bonus transactions. I would hold this same opinion if the bonus was $1000 dollars as I do with seven figure payouts but I don't think we would see groups rallying to protest a smaller payment. No, the comments being made in by regular Joes in the newspapers all refer to the exorbitant amounts being paid. Let's just remember, these individuals had a contract with their employer stating the terms and amounts of these bonuses and these contracts were in effect before the company received bailout money.

When Henry "where's the camera" Paulson negotiated the initial terms of the bailout, Timothy "who needs a Turbo Tax instruction manual" Geithner was in the room. The future Treasury Secretary and tax evader, who was too smart and important to fail, should have known and probably has known for months these payments were about to happen. News reports contradict claims by the First African American President of the United States administration's claims that they just learned of these payments. The feigned indignation of The ONE will be on full display tomorrow night when he debases the office of the Presidency of the greatest country on Earth, and possibly himself, to go on a television talk show like some narcissistic celebrity touting their most recent cinematic effort or covering for a social faux pas. Granted Obama has several of these social errors to explain away but I am sure the permanent campaigner will do what he is best at tomorrow: campaign. Or he could, once again, tell how his stimulus package will benefit Caterpillar workers. I wonder where they will hide the teleprompters.

The most wretched among the indignant are those in Congress who, after getting us in this whole economic mess in the first place, now feel they have the right to take back by force the bonus money should the incompetents who received it not choose to do the right thing while ignoring equally wrong bonus payments to Fannie Mae executives. Bonuses they made possible. This angers me more than the payments. If Chuckles Shumer stood in front of me and spewed his threat of taking back this money through Government fiat I would have pimp slapped him harder than Chris Brown hits a woman on their third date.

We can not allow Congress to set the precedent of selectively going after anyone who they feel is not playing nice. Opening this Pandora's box of retroactive legislation is yet another step on the road to Socialism and social engineering; a road that seems to be flowing like the out of town side of the expressway during morning rush hour.

Where is the anger? Where is the contempt? Where is the moral outrage over the recent acts by our government in their continued power grab and blatant disregard for the intentions of our founding fathers.

This guy gets it:



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What is the sound of an invisible hand clapping?

To paraphrase the adage: the longest blog post starts with a single word. This journey is going to be all over the map but in the end I am not sure it goes anywhere. Let’s just call it an extemporaneous trip of self-expression and free association. Speaking of trips:

I can imagine Adam Smith and Ronald Reagan on a road trip in Heaven. Returning from Hell after toilet papering Karl Marx’s house, they looked at their Atlas and Shrugged. Where did Capitalism go? They’d ask John Galt if they only knew who the hell he was.The United State’s slide toward an economy reminiscent of the stagnant government intruding and nearly socialist models of many European nations should come as no surprise. For years our state run institutions of higher indoctrination have been the home of wayward communists and leftist bomb throwers. They are Party places where state is praised as the savior of the poor and individual accomplishment is frowned upon. And God or Christmas, don’t even go there! Really comrade, do you expect someone who refuses to keep score in a little league game to teach that competition is healthy and that the free market works?


The much maligned free market does, in fact, work. What doesn’t work is government involvement in business. The papers, blogs, radio and television are now atwitter over the need to bail out the auto industry to stave off yet another in the increasing line of falling dominos on the road to financial and economic ruin. Democrats in the Senate are proposing giving the big three auto makers $25 billion dollars and are wooing weak kneed Republican Senators from the Rust Belt to their side. This money will not be free and it will not do anything other than lead us further away from the principles that made this country great: free market capitalism.

Money is control and Congress will demand of the big three that some control be surrendered for it. Concessions like management changes (Obama wants an Auto Czar – don’t you just love the word Czar?), salary concessions and a commitment to make the shitty little electric vehicles that nobody in their right mind would want to own. (Ed. Note: If the whiny deathtraps were any good or were wanted by people, the government wouldn’t have to force Detroit to make them; they’d be making them on their own to keep up with demand; although the Smart Cars do seem to be selling so someone). Once this camel’s nose is under the tent, it won’t be long until even more intrusion follows and as someone who just had to visit the DMV to renew a driver’s license, I know government run institutions run about as well as my dog does on an icy pond. Sure it is funny to watch but it is pretty sad too. The poor thing is way over his head and has no clue how to get off or what to do. Umm, I am talking about the government, not my dog.

More important in all of this is the fact government spending doesn’t work to stimulate private business. Don’t take my word for it. Much smarter minds than mine, besides being found on the kids panel of “Are You Smarter Than A 5^th Grader, have written on this here.

My fear is that the auto bailout is but the next step in our path to socialism. We are like the frog being cooked alive in a pot of slowly warming water. In the kind of creeping socialism espoused by Marx around 150 years ago, our toes and our country are turning red from the heat. Let’s hope the increasingly spiraling expenditures being touted now raise the temperature quickly enough to get everyone croaking in complaint instead of our freedom just plain ole croaking.

There is hope. George W, in his recent address to the G20 stated: “History has shown that the greater threat to economic prosperity is not too little government involvement in the market, but too much… Our aim should not be more government, it should be smarter government.''

“The answer is not to try to reinvent that system,'' Bush said. “It is to fix the problems we face, make the reforms we need, and move forward with the free market system.''

Well hooray, huzzah, woo hoo and an atta boy to the President. Good for him but it is about damn time! I guess it is better late than never but this kind of address smacks of a death-bed confession and a grasp for legacy with two short months to go in his eight year tenure. He and Republicans like him enabled much of this slide away from the capitalism he is now claiming to hold so dear. So long as it didn’t fall on deaf ears. But alas it most likely did.

For government may be the pusher of this “everyone is equal and society needs a political fix” drug, but we are the addicts. A not so wise blogger recently posted about the growing number of hungry Oliver Twists standing in line at the orphanage of Monkle Sam asking “Please sir, may I have some more?” in an effort to grab for themselves a bowl full of bailout. In fact, scroll down and you will find it and some relevant links.

When Adam Smith’s now out of sight out of mind theory of the “invisible hand” of capitalism was first coined, people were better than they are today. True champions of industry desired to build long lasting and socially, as well as financially, beneficial companies for the long term. Todays get rich quick at any cost and damn everyone else ideal is providing the fuel for the fire bombs thrown by the “we must restrain unregulated capitalism” crowd. Ideals and actions like those of AIG who, after receiving their 700 billion dollar goose to save them from ruin, decided to still pay bonuses and exorbitant salaries to avoid having their senior management leave. These are same senior managers whose decisions brought the company to the verge of this ruin. Yeah, we sure wouldn’t want them to leave now would we? The mortgage lenders who made loans to people they damn well knew couldn’t afford them (at the direction of the geniuses like Barney Frank in the House). From the parachutes of corporate executives all the way to the “I know I can’t afford it but I want it anyway” borrowers, the golden rule seems to be “give me the money now and I will worry about the future later”.

Ayn Rand was prophetic in her analysis and prediction of how the takers would, well, take. Yes, the heroes in her novels were all about doing what was in their own self-interest; objectivists as her philosophy describes them. And, at the core of capitalism it is self-interest and success that is the fuel for the economic engine. But it is not self-interest at the detriment of others. Unlike a little league game where someone does win and someone does lose (at least when a score is kept), in an economy everyone can be a winner. A rising tide will raise all boats so long as someone isn’t putting holes in other’s hulls in an effort to sink their ships to raise the water level. True capitalists succeed through honest effort, providing goods and services better, faster, cheaper and on their own while providing jobs to hard working individuals. These people shouldn’t be punished. Takers, seek the easy road and handouts in order to get ahead. These people and companies shouldn’t be rewarded. I don’t think, like in Rand’s novel, the forward thinking, creative and productive members of society should segment themselves in some inaccessible mountain valley. They, and all of us, need to reign in the takers, distributionists and “share the wealth” crowd before it is too late.

A couple things need to happen to get us on the right track. One thing is to get government out of the way. Are the auto makers too big to fail? I don’t know but if they do, so be it. Another thing is for all of us to realize there are more important things than our own selves and short term gain. Is it a purpose driven life we should seek? That is up to you. All I know is that if we turn ourselves over to the religion of government, we are all damned.

At least we can go by Karl’s house and watch him clean up the TP.

Whew.
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