Tuesday, March 17, 2009

Politicians outraged over their actions

Apparently the folks at insurance giant AIG are using taxpayer dollars to subsidize the lavish lifestyles of the very people responsible for destroying their company and the global economy, prompting faux-populist outrage from everyone from President Obama to Barney Frank -- that is, the very people who overseen or supported the transfer of more than $170 billion to AIG to date. But one shouldn't dwell on the mistakes of the past. After all, who could have possibly foreseen corporate executives at a bankrupt firm using tens of billions of dollars in no-strings-attached bailout funds in ways that are . . . less than ideal?
Also confounding: that granting an elite group of financial institutions access to abundant capital in the form of cheap credit from the Federal Reserve -- including the ability to borrow $40 for every dollar they possessed in assets -- and implicitly guaranteeing a government rescue should the days of Dow 36,000 give way to Bailout $9 Trillion, could lead to reckless speculation and irresponsible behavior.

As Jim Cramer would say, who could have known?

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