Another One Goes Under

AIG, one of the country’s largest insurance corporations, found itself on the chopping block, spared at the eleventh hour by an $85 Billion bailout courtesy, well, you.  This is awesome because not only do I get the opportunity to point out that John McCain is wrong again, but also I get to put on display my very own feeble understanding of the economy which is likely to be mocked with great enthusiasm!

Come along, it’ll be FUN!

Okay, the big wigs on Wall Street aren’t likely to face an awful lot of sympathetic faces when things get bad, right?  We don’t get the same treatment on an individual basis; if they were irresponsible to put themselves in this position, they can dig themselves out or go under, right?

Indeed, that would be John McCain’s position; no bailout, and on a raw, visceral level, letting AIG fall on its ass as opposed to picking up the tab is a tempting proposition.  It’s also so stupid that someone even as economy illiterate as I am can see it.

The fact of the matter is that we are long past letting personal and corporate responsibility win the day.  As much as it sucks, we have to bail these punks out because if we don’t, far more people are going to get hurt than just the responsible parties.

Think about it this way.  Let’s say that you’re kayaking out on the water and your kayak springs a leak.  It sinks but it doesn’t pull much of anything with it because it’s so small that it doesn’t impose collateral reactions on surrounding items.  Sure, you’ll go down with the kayak if you’re tied to it somehow, or if you get knocked upside the head with the oar or something.  But if not, you’ll be able to swim away from your prized kayak, and the rest of your buddies will easily be kept afloat as they laugh at your misfortune.

Now let’s pretend you’re in a giant aircraft carrier that, for some reason, desides it wants to sink.  This is a much different story.  You see, the aircraft carrier is so massive that as it sinks through the water it draws other surrounding objects down with it.  And that’s not even taking into account all the people that are on board.  If you manage to jump ship, or if you are in a row boat that isn’t a safe distance away from the vessel before it goes down, it won’t matter how strong of a swimmer you are or how hard you row, you’re going under as well.

The thing about AIG is that it is like one ginormous aircraft carrier sitting on the water that is our economy.  Surrounding AIG are a whole bunch of other smaller boats and individual swimmers, so if AIG is allowed to sink, it’s going to pull an awful lot of those boats down along with it.

In fact, the collapse would likely cause a chain reaction with potentially catastrophic results.  So when John McCain says he doesn’t understand the economy as well as he probably should, this is a clear example.  He opposed the bailout apparently without understanding what implications not bailing out AIG would have.

But what does this mean to you?  The middle class?  I really can’t answer all the questions to this, but I’ll give you one specific example that I learned last night.

My wife’s retirement plan is tied up in the market, and I discovered that just over the course of this year, she lost ten thousand dollars from her retirement fund.  Ten thousand dollars.  We are very, very far from being rich, and ten thousand dollars is an awful lot of money, and we lost it in just nine months.

Again, I don’t know much about the economy, but that strikes me as really farking awful.

Leave a Reply

Your email address will not be published. Required fields are marked *

Connect with Facebook