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Fed takes over AIG

dealbook.blogs.nytimes.com

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Re: Fed takes over AIG

#101

Post by MaysonL »

helveticaman wrote: post #56
jmatt wrote: post #21

What harm is there in letting a company that made bad decisions go bankrupt? I don't see how it's pragmatic to pass this burden on to tax payers and the general public. I admit that I am idealistic about such things. I don't see how government is going to solve any of these problems. The government will lessen the pain but that same behavior will also slow any rebound and future growth. It seems naive and narrow mind…

It all comes down to the government intervention paradox: whenever something bad happens, people ask for intervention, which implies the only entity willing to do such things, the government. The sad part is, to my knowledge, this intervention never works out for the best . When is the last time you heard the phrase, "thank goodness the government intervened! It did such a good job, and now everyone's happy!" with re…

Let's see: the GI Bill, the Internet, Social Security, NASA's and DOD's funding of computer and semiconductor R&D all seem to have worked out fairly well. Not perfectly, but better than their non-existence would have.

Re: Fed takes over AIG

#102

Post by mixmax »

jrmurad wrote: post #43
sabat wrote: post #26

Earlier quoted context omitted.

Cancer. Diabetes. Yadda yadda. Do you know how many people are not insured and cannot afford insurance? ("Go to the emergency room" is not a health plan.) Do you know how many people with serious illnesses are turned down by their own insurance companies every year? I'm not saying socialism is an automatic answer, but it'd better than this mess.

I'm not saying you're wrong that socialism is better than this mess but I will say that capitalism is better than this mess and better than socialism too. Having health insurance provided by the State (i.e. you through your tax dollars after several layers of corruption and bureaucratic waste) does not guarantee quality of care. A competitive free market is more likely to develop better medicine.

I think that empirical evidence is against you on this one. The US has one of the highest spendings on healthcare per capita in the world, while average life expectancy (one of the measures of a good health care system) is on par with Cuba. US yearly expenditure on healthcare per person is $4.500. In Cuba it's $100.

The American freemarket system clearly doesn't work very well.

Source: http://ucatlas.ucsc.edu/spend.php*

Re: Fed takes over AIG

#103

Post by Prrometheus »

albertcardona wrote: post #17
yamil wrote: post #5

Welcome to socialist states of America

Hasn't the USA been engaged forever in heavy market protection, tariffs for imported goods, and heavy subsidies to internal industries like metal foundries, the car industry and particularly agriculture? Hasn't the USA at the same time demanded open markets of all other economies in which it invested or participated in some way? Hasn't the USA's tax dollars funded most private research, yet the economic benefits have…

When you have a $3 trillion entity in an economy, people have the incentive to petition it for favors. Even when the government's budget was a lot smaller, businessmen could still finagle for tax breaks and the like.

Rent seeking is in the DNA of democracy.

Re: Fed takes over AIG

#104

Post by wheels »

jrmurad wrote: post #43
sabat wrote: post #26

Earlier quoted context omitted.

Cancer. Diabetes. Yadda yadda. Do you know how many people are not insured and cannot afford insurance? ("Go to the emergency room" is not a health plan.) Do you know how many people with serious illnesses are turned down by their own insurance companies every year? I'm not saying socialism is an automatic answer, but it'd better than this mess.

I'm not saying you're wrong that socialism is better than this mess but I will say that capitalism is better than this mess and better than socialism too. Having health insurance provided by the State (i.e. you through your tax dollars after several layers of corruption and bureaucratic waste) does not guarantee quality of care. A competitive free market is more likely to develop better medicine.

I'm not going to get into this debate here, I'd suggest checking out some info and then seeing if it fits with your assumptions. Page 200 here ranks worth health systems:

http://www.who.int/whr/2000/en/whr00_en.pdf

Re: Fed takes over AIG

#105

Post by davidw »

jmatt wrote: post #51
dpapathanasiou wrote: post #41

Earlier quoted context omitted.

It seems naive and narrow minded to think another company won't step in if there is a continued need for the services that AIG provide{d|s}. But it's unrealistic to think that the vacuum could be filled fast enough to prevent a wave of failures among AIG's clients (banks who bought credit insurance to get around regulatory limits). There's more detail here: http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/09…

Thanks, this is the first reason that I've heard that makes sense. It's part of the world financial infrastructure.

Mark Thoma has quite a bit of coverage from economists and other people who are more knowledgeable about these sorts of things than you get in your average newspaper article:

http://economistsview.typepad.com/

Re: Fed takes over AIG

#106

Post by eru »

sabat wrote: post #26
yummyfajitas wrote: post #19

Earlier quoted context omitted.

What treatable diseases are poor/middle-class people dying of, that could be prevented by socialism?

Cancer. Diabetes. Yadda yadda. Do you know how many people are not insured and cannot afford insurance? ("Go to the emergency room" is not a health plan.) Do you know how many people with serious illnesses are turned down by their own insurance companies every year? I'm not saying socialism is an automatic answer, but it'd better than this mess.

No, it's not. Come to eastern Germany any time to see what scars socialism left - even 20 years after it's gone.

Re: Fed takes over AIG

#107

Post by eru »

iamelgringo wrote: post #33
yamil wrote: post #5

Welcome to socialist states of America

The US has actually had a much more mercantile approach to business than socialistic. They are capitalistic up to a point, but the governent tends to step in and manage, regulate, bailout, give tax cuts to companies and industries when they deem necessary. There are entire industries that are heavily subsidized and regulated, Telecom, Healthcare, Energy, Transportation, etc... Our countries national roadway system ca…

I hope they get some international competition.

Re: Fed takes over AIG

#108

Post by eru »

sethg wrote: post #14

Somewhere, the ghost of Karl Marx is saying "WTF? They're nationalizing an insurance company ?"

Karl Marx did not tend to write that clearly. Add some dialectic materialism.

Have you ever read the guy? It's awful.

Re: Fed takes over AIG

#109

Post by eru »

netcan wrote: post #23
jmatt wrote: post #21

What harm is there in letting a company that made bad decisions go bankrupt? I don't see how it's pragmatic to pass this burden on to tax payers and the general public. I admit that I am idealistic about such things. I don't see how government is going to solve any of these problems. The government will lessen the pain but that same behavior will also slow any rebound and future growth. It seems naive and narrow mind…

In the long run we're all dead.

You and Mr. Keynes, maybe. Ray Kurzweil, no.

Re: Fed takes over AIG

#110

Post by eru »

quasimojo wrote: post #66
vitaminj wrote: post #55

Earlier quoted context omitted.

So far the blood on the streets is almost exclusively from the financial sector, ie. investment banks, hedge funds, etc. They may affect your pension funds but it's mainly institutional investors and others with big stakes in these companies that'll pick up the tab. However AIG obviously isn't an investment bank. A failure of AIG would affect people outside of the financial sector who have purchased AIG insurance pro…

the 3.3 - 1.9 = 1.4% difference is precisely reflected in the oil bubble. now that oil is backing down, this number will also fall

And you should look at GDP per person. The US population is still growing strong.
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