Random thoughts on the economy

The economy sucks. Housing prices are going down, stocks are going down, people are being laid off, and companies are going out of business. Unfortunately, some of this is necessary.

However...

Why do we prop up AIG? Companies made "bets" against financial instruments that they sometimes didn't even have. Why does the government pay off those bets? The government didn't insure or regulate those bets in the first place. Considering that many of these bets are to foreign banks, shouldn't those governments step in? If it was the London branch of AIG causing the problem, should the British government step in? And what's with these bonuses? Perhaps a better solution is to have the government go in and take over the company. Figure out what is going on, sell of the valuable assets, and figure out what to do with the rest. The government shouldn't be handing out 100% payouts on unregulated insurance obligations. If the companies wanted insurance, they should have bought it. It was all a house of cards. Perhaps paying 20% or so as if it was a bankruptcy would be better. The companies who were placing bets get to feel some pain. Why should they not suffer through some of the pain?

Taxpayers are covering a lot of losses. We'll all be paying for this in the future. The government is printing huge sums of money to keep the system liquid. Isn't that what got us into this mess?

If a company is too big to fail, it is too big period. Some of these companies should be split up like AT&T was when it was a monopoly. This way the failure of one company doesn't risk causing total collapse.

Who is supposed to be protecting people from ponzi schemes?

The government ought to be reorganized. Who is responsible for food safety? FDA? Dept of agriculture? Someone should take a look and reorganize the government into more logical functional groups.

Why do we allow companies to sidestep regulation by narrowly defining what is being regulated? If we regulate AIG's insurance business, and AIG sells insurance but calls it something else, shouldn't the government still regulate it?

Why doesn't the government just take over some of the shaky banks instead of giving them cash? It seems that these companies that are on the verge of failing should just be taken over and cleaned up. It's obvious that their management did not do their job running the company and the stockholders did not seem to care. Both should lose.

There seems to be a lull in the bad news. Perhaps we're now at the bottom of this mess.