The main economic news today was that the United States government had decided to bail out American International Group (AIG) for 85 billion dollars, http://www.nytimes.com/2008/09/18/business/18markets.html?pagewanted=2&_r=1&h and this just two weeks after the federal government bailed out Freddie Mac and Fannie Mae. http://dealbook.blogs.nytimes.com/2008/09/17/aigs-85-billion-government-bailout/?scp=2&sq=bail%20out%20global%20stock&st=cse.  Economic commentators are saying that the current economic situation the nation is facing may be worse than the Great Depression.

Private economic interests have always been against government regulation, but suddenly when they have to face the bad times in the economic cycle they are all for the government bailing them out.  They want to have the cake and eat it too. The government alleges that they have to bail out these entities to protect the public interest.  But why not protect the public interest before the situation deteriorates to the point of affecting the national and international economic well being of millions of innocent small investors? The average investor retiree is so very scared about the breach of trust that has happened between these large corporations and them and the general state of the economy.

Watching Larry King’s show this evening on CNN, he asked Donald Trump about the cause or causes of this crisis, to which Mr. Trump responded “…well there is a lot of greed going on in this country…I am not sure you can do anything about greed…”   To which statement I must respond that although the government cannot regulate the individual’s hierarchy of values, we as a society can certainly do a bit to influence that by assigning more prestige and importance to other accomplishments besides making a buck the easy way. 

I am generally against big government regulation and intervention, and to be consistent I do not believe the government should be bailing out any of these large corporations, even if smaller investors are affected by the crisis.  If taxpayers bail them out, these corporations will feel free to take excessive risks and commit the egregious mistakes they have committed before because they have to face no consequences, someone else (the taxpayer) will ultimately pay for their mistakes.  We need to teach those greedy protagonists in the market that they cannot have their cake and eat it too.