Another Bailout: Government Loans AIG $85 B
The federal government agreed Tuesday to make an emergency loan of $85 billion to American International Group in exchange for a nearly 80 percent equity stake in the company.
I hate to sound like a cold, unfeeling capitalist, but you HAVE TO LET COMPANIES FAIL. Yes, it can hurt some, but that's the WHOLE IDEA behind the whole damned economic system.
And it doesn't even really help to bail them out, because without consequences, they have no reason to change their practices.
Look at Detroit: the government bailed them out. Did it help? NO. Now, Detroit is NOWHERE. They improved not one iota. But if they had been allowed to sink, they might have looked around and said, "Hey - maybe we make should make cars that are smaller and better. What a concept." That would have resurrected the industry. But they didn't. Instead, they kept making the same old gas guzzlers that nobody wants, and now they're in the same boat that they were in then.
You can't have corporations privatized if they make money and socialized if they lose money. That's not capitalism; that's a perversion of capitalism.
If you aren't going to allow the supply-side to suffer the consequences of their own actions, and if you aren't going to allow superior competition to replace companies with bad business practices, you HAVE no capitalism.
What you have is a completely sick system where corporations are subsidized and shielded and only their CUSTOMERS have to sink or swim.