AIG is a fantastic example of how good the government is at running corporations. The government owns 80% of inflated insurance giant AIG, a greater level of ownership than most institutional investors own in anything. As such, it has a genuine interest in seeing the firm turn profitable, right?
Oh yeah, Barney Frank doesn't care what happens to taxpayers' investments since...that tax money keeps rolling in no matter how well AIG performs. Okay, so under that paradigm, it makes sense that the government's management style consists of forking over an ass load of money, and then running in the other direction to worry about something more important, like hand out even more money, but to people who vote.
This reminds me of Alan Greenspan saying "I am so surprised that the self-interest of banks did not restrain them from taking excessive risks," when he spent half a decade telling banks "Free Risk! Free Risk! Come take my risk! Hey Nonny Nonny Hey!. What Alan Greenspan did to the markets was force feed it steroids and then say "Oh my, how did those testicles shrink like that?"
And this is basically what has been done with AIG. If Barney Frank could speak human, his words would say "We gave them tons of money for driving a once-great company into the ground, and now they've spent some of that money on bonuses. How could this have happened?"
Happy St. Patty's everyone. I need a drink.
With Ayn Rand's current popularity at least people can't say they didn't know the way to have healthy markets with big balls. If we have few more objectivists teaching in business schools then we might have to buy markets some bigger pants.
ReplyDelete