Quote:
Originally Posted by KSig RC
That might be how the average person views it, but reasonable should be an entirely different standard.
Look, AIG is sunk cost at this point. The money's gone - and if you want to unseat your Congressman because s/he voted for it, go nuts, because that's the only say we have in it now. But let's not misrepresent the idea here - the thought wasn't "oh, $144 billion and things go away" . . . not in the slightest. The idea was "oh, $144 billion and maybe we'll help prevent or stave off a market collapse that will devalue the currency, cause massive bank failure and create a situation of incredible panic." Because that was one of the potential downsides of the AIG failure - and we need to look at it more like this:
(these are all completely made up)
-10% chance of market collapse given the Lehman/Bear Stears/AIG troika, with only AIG needing to be propped
-25% chance of deep depression
-65% chance the failure has no long-reaching consequences
The 10% chance costs the economy something like $2 trillion, the 25% chance something like $1 trillion, the 65% chance something like $144 billion. The math is very simple: the 'risk' of the $144 billion is worth even a moderate to small chance of collapse.
If the company doesn't have the money to pay me, I don't get the money, sure.
The company does have the money to pay them - and it's a tiny, tiny amount of the overall income process.
There's also a very good chance that there paying the bonuses IS in the best interest of ensuring the company doesn't fail, by the way - no one has addressed that yet.
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But, simply addressing it from the "outrage" angle, the idea that the people who voted to spend the money apparently either never considered the value of the bonuses in the saving the overall economy risk calculation before they authorized it or think it's politically expedient to pretend now that that they didn't remains outrageous in itself. It suggests that they're likely throwing trillions of dollars overall at a problem with absolutely no consideration of what will actually happen. They seem to just have a panicky notion that spending is better than not spending.
I have little hope that whoever would run against someone who voted for it would be an improvement, so I think that's one reason why some of us stay in the outrage loop. What can you really do?