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any time timmy and the big B spent on AIG bonuses was an obvious waste of time that they should have spent coming up with something other than the latest tired attempt to have the American people overpay for shitty bank assets.

I do agree however in blaming Greenspan, though i don’t necessarily see the point in tying him to the republican party. The republican party itself wouldn’t have a specific opinion on the matters that Greenspan most affected, but rather that is in economic spirit; If anything you are saying republicans are more pure capitalists, while democrats weigh more in as socialists?

Greenspan’s idea that liquidity would solve all financial woes was clearly faulty. it was inherently errant in that liquidity DOES solve most problems, but the amount of leverage that comes with increased liquidity can cause tremendous losses when there no longer is a market for an instrument, and said instrument may no longer be sold.

The truth of the matter is that Obama’s administration is trying to solve the problem by the hair of the dog, so to speak. the heart of the crisis comes from accessibility to credit in order to increase liquidity, through the process of deregulation. giving these tremendous “loans”, equity stakes, and revolving credit agreements to big corporations are providing just the same; I can promise you 8 years from now we will look back and find that providing MORE easily accessible credit will NOT be what solved the crisis.

These bailouts were a problem from the beginning, even the first one that passed under the Bush administration. Nationalization of business and increased spending are the LAST things this nation under crisis needs. instead, the government should be focused on cutting the budget and keeping the dollar from a deval. Instead, we should take a page out of the Book of William J. McDonough, Fed NY-branch President in 1998, during the collapse of LTCM. Instead of bailing out the hedgefund, or taking any active involvement in the solution, he brought together (without Greenspan, mind you) the heads of the major players in wall street to confer and find a solution amongst them. Similar should have been done with AIG, Bear Stearns, Lehman brothers, and CitiGroup, instead of the collapse/bailouts. the companies that could not or would not merge, cancel debt, or find ways to hold each other over would simply be left to fend for themselves, and the bad businesses, those that overleveraged, overcapitalized, or overextended their venture into risky assets, would collapse.

Steven, there’s a definite populist and moralist twinge to the outcry over the craziness in the bailouts, and I think that’s a good thing. If we’re lucky, it will be what leads to the serious reforms, and re-regulations, that the system needs.

Sure, the AIG Financial Products Division (along with Moody’s, the banks, etc.) gamed the system, but what we need to ask now is why the system was so easily gamed.

What the AIG executives did wasn’t illegal and, if one thinks that strictures from “business ethics” can carry the load within capitalist financial markets, then I can get that person a good deal on some very cheap Lehman Brothers stock.

I think the administration should take a very hard line and negotiate with the banks/AIG before giving them money. If the company breaks the contract, screw ‘em. I don’t understand why they didn’t do this in the first place. Welfare recipients/Unemployment recipients have to jump through a bunch of hoops for hundreds/thousands of dollars, but those receiving millions/billions of dollars don’t?