Wednesday, September 17, 2008

Out of the Loop

Nancy Moran and Hans Nichols Bloomberg reports that John McCain opposed a bailout of AIG soon before the bailout plan was announced.

The Arizona senator said on NBC's ``Today'' show that taxpayers should not be ``on the hook'' for AIG, which may be on the verge of collapse. He praised Treasury Secretary Henry Paulson for denying requests for a bailout, saying Paulson ``has been correct'' in asserting taxpayers aren't responsible for business failures.

Ooops. Now this is odd. I assume McCain is ill informed about most things, but I would have guessed that the Bush administration would have clued him in before it informed the public just to help The Party.

If I were McCain I would be even more angry with Paulson than with Fiorina.

As Mark Kleiman notes, this shows (again) that McCain is unqualified to be President. To him, it is always a moral issue, where relatively easy options are to be rejected. No bailout. Face the music. Be resolute even in the face of impossible odds. Endure.

Not good principles when the worlds largest insurance company might go under and when it is possible to resolutely make them face the music without bankruptcy. The US government and in particular the FED demanded an 80% stake in AIG as part of the bailout. The shareholders were left with something, but not enough to make them look for another company playing heads I win tails ... omigod I thought insurance companies were about the safest investment there is.

Also that would give the FED authority to decide on executive compensation wouldn't it ? I mean Robert Willumstad is now making considerably more than his superiors. Is that going to last ?

McCain's logic is Herbert Hoover's logic (but at least Hoover was honest as well as moralistic). It makes no sense in a modern economy.

I am fairly sure that most US economists and businessmen are prepared to argue that the AIG bailout was necessary. I am looking forward to some being asked what they think of McCain after they explain what chaos would have occurred without the bailout.

Via Mark Kleiman who is being even more brilliant than usual. Did you click the Fiorina link ? Brief and brilliant.

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