Bailout News... first results from bank takeover (AIG)

Had to post this once I read it. Several points to consider:

1. The source. CNN has been extremely pro-Democrat/pro-Obama in its coverage of nearly everything over the last year, and this article is reporting facts and not spin. In fact, the article references someone else is doing some spinning, and it borders on being downright critical of at least one aspect of government's current economic policy.

2. The information. AIG was the first one the government spent a ton to directly bail out, and then they quietly gave them even more money (loaned them more money, but a loan implies some kind of repayment, and that has not been forthcoming). Top management was removed, the government took over... and things are worse.

3. The old military axiom: "Never reinforce failure." You last heard this thrown around by the media at large in 2007, when Bush announced the surge plans in Iraq. Democrats/liberals were quick to go to this line (just google search it the phrase) and use it to verbally pummel the Bush White House, but it worked... President Obama's speech today gave the timetable for leaving Iraq, which is only possible now because of the surge. The data bore out that Bush was right, even though political voices screamed he was wrong. But in this situation, we have data: AIG is still a mess, with no foreseeable upside. Unlike those who screamed at Bush about Iraq, those would criticize the attempt to prop up banks such as Citigroup have data that verifies their claim that is doesn't work. Government intervention to this point has failed... ask any stock holder.

4. Watch for spin, so as to be able to identify it when you encounter it. I can't wait for the next speech/story/article that speaks to all the positives that can be gleaned from the current "negative growth" of the financial sector. These kinds of claims are simple to see through. Ask 2 questions: 1) Is the company still losing money? and 2) Has the company dealt with the problems that led them to lose money?

5. Look for patterns. What can we learn from situation A that applies to situation B? As Bill Cosby once joked, "If I walk down a dark alley, and get beaten and robbed, then I don't walk down that alley - or any other alley that looks like it - again."

The ongoing AIG mess tells me that the Citigroup mess is (and other similar bank messes are) going to get worse. It also tells me that we don't have the answer here yet, and we can't afford to just do the same things again and expect different results. Unfortunately the group that has a different answer to the question is not in power at the moment.

But there is a lesson there also, in that elections have consequences. We must be informed as citizens as to the issues and the candidates.