AIG and the Land of the Free?
Only in America can you loose a ton of money in the stock market casino and get your money back. Do I blame AIG for their bailout? Not really. If I was a CEO and in deep because I had little risk mitigation related to debt that was obviously going bad, I would ask for money. I would also love to keep my job as CEO with the promise to make it better. So let me ask these questions.
Will the bailout of AIG and others help the guy who lost his job and/or his home?
Will the bailout stop bill collectors from calling him/her every 15 minutes?
In the short term the answer is no. Then what about the long term?
I believe the answer is still no.
Every paper talks about a credit crunch. People can’t get access to credit. Alright lets take a look at this. People cannot get access to money that some loan shark bank is going to collect interest on. When did it become a sense of pride to be able to borrow 200k for a house. Then pay 600k over the life of the loan? Freeing up credit will short term help the economy but put people deeper in debt.
The first step on the road to recover is to stop using the credit. It should be a crime to put people into a situation where they have to finance a washing machine. Other countries do not work that way. Pride is owning that car with out a loan. Pride is looking at the house that’s 100% yours. Credit isn’t having something earned it’s having something borrowed with a fee added.
If a company pays all its bills, all its salaries, and has some money in the bank its doing good. When did it become required a company makes 100 billion in profit after expenses every year or else its doing bad. Companies blame the union, health care costs, and the economy when they don’t make 101 billion next year.
Companies say they have to send jobs over seas to get to the 101 billion mark (or what ever that number is). Boy, I sure want to cry a river on that one. When their product has saturated the market and nobody else will buy it, profits won’t go any higher, so they reduce cost. Not because the company is doing bad, but because the stock price will be effected. Who does that effect? CEO’s compensation is usually tied directly to the stock price not the USA unemployment rate. Shareholders are effected. The stock market has always been for at risk capital.
When did that change? Is the stock market now a bank? People put stocks into their 401k buy selecting options in their plan. Now retiree’s are effected. Wow. Were we blind sided by that. When was the stock market a guaranteed return on your investment?
So now were forced to reward companies for greed to save some retirement plans.
So what can you do?
Write your congress person and request oversight on the bailout. Also, stop supporting companies that take the money but there is no direct impact to the working class.
I’ll be having more rants soon. So stay tuned.