Now, on the surface, that might seem like a good thing. After all, the U.S. government loudly declared how AIG was "too important for us to let it fail".
However, the essence of capitalism, dear reader, is freedom of the individual within the marketplace; indeed, economic survival-of-the-fittest! The companies that innovate ways to do a needed function, do it well, and do it cheaply thrive. Others reinvent themselves to do so. The others simply disappear.
The U.S. government has now declared that it will pick and choose which companies it will allow to fail! Wherein lies the incentive to be necessary, effective and cost-efficient when the government will pick of the tab for the inept? If, in fact, AIG has been "allowed" to fail-- and many companies have in our past-- even big ones, and we all lived to tell about it-- then other companies would have stepped in and competed (better services at lower costs) to grab those customers!
Yet this was only the first of three direct assaults upon individual liberty within the AIG scandal (and by scandal I do NOT mean a company that did poorly, at least recently).
The next misstep by Congress, and this is a biggie, is that they stole from you. No, I'm not an anarchist who thinks there should be no government. However, the simple fact of the matter is that a small group of people (Congress and the President) picked a company that they wanted to support, and then took tax money (YOUR money; fellow taxpayer!) and gave it to AIG!
Ironically, several political leaders went on tirades about how the American people should not be burdened with bill for poorly-run companies! Clearly, what they meant was, "Companies should be run well." I agree! But, further, they meant, "If the companies aren't run well, we will take whatever we think we need to from the pockets of Americans to offset their loss, if we like the company."
You were just pickpocketed, dear capitalist reader. You go to work to take care of your family and to provide a better life for yourself and those you love. The U.S. government took money from your piggy bank this past week and then lamented how unfair it was!
Yet the third, and most egregious assault on the capitalist foundation of this great nation was stated plainly by the chairman of the House Financial Services Committee, Barney Frank (D-MA).
He said: "I do believe that it is time for us to assert our ownership rights under this arrangement. We're the effective owners of this company. What we ought to be doing is exercising our rights as the owners to bring lawsuits to say, these people performed so badly, the magnitude of the losses were so great that we are justified in rescinding the bonuses." (emphasis added, of course).
Yes, you read it right, gentle reader. Barney Frank and some of his colleagues in Congress feel that THEY own AIG! And not only do they own it, but they have the right to control its practices!
No U.S. investor, of any company, has the right to dictate to the company how to run its day to day operations. You can't tell it what products to sell, what hours to keep, what bonuses to pay or not to pay. But Barney Frank, et al., can?
The key points again:
- The government PICKED a company that would exempt from normal economic forces
- The government TOOK your money to buy an 80% stake in that company
- The government now wishes to RUN that company from Congress
I hope that your "separation of powers" alarm is blaring louder than the B9 Robot from "Lost in Space".
While each of these points raise many problematic issues (legal, constitutional, economic, and ethical), I will respond in brief:
- If a company is poorly run, let it improve on its own or fail. Employees will find other jobs, customers will be served by companies competing even harder for that marketshare, and the sky will not fall, thank you very much Chicken Little. We'll live.
- Congress is authorized to tax to provide for the common defense and promote the general welfare. While I pray for a Supreme Court challenge to this Congressional pilfering from your family's coffers, I say if it is proven that this step actually promoted the general welfare, then give us our shares. The company was bought with our money- give us our shares!
- One of definitions of "governmental ownership and private control" is SOCIALISM. BUT one of the definitions of "governmental ownership and governmental control" is COMMUNISM. This is a very slippery slope we are on, my fellow Americans. If our rights can be infringed upon here, why not another step, then another?
We must be cruel to be kind! Sometimes, poorly run companies will, nay, must fail. Yet our nation will be stronger because of it. Wouldn't it be great to have fewer and fewer poorly run companies?
P.S. The company that was "too important" to be allowed to fail took one-tenth of one percent of the money it was given and used it to pay bonuses to which it was already contractually obligated. The government knew about it at the time it was given the bailout money. Now Congress is mad. If they are so important and so valuable, should Congress be mad about letting them keep the few really good performers? Hmmm...
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