News
 International
   Global Views
   Asia-Pacific
   America
   Europe
   Middle East & Africa
 National
 Embassy News
 Arts & Living
 Business
 Travel & Hotel
 Medical Tourism New
 Taekwondo
 Media
 Letters to Editor
 Photo Gallery
 News Media Link
 TV Schedule Link
 News English
 Life
 Hospitals & Clinics
 Flea Market
 Moving & Packaging
 Religious Service
 Korean Classes
 Korean Weather
 Housing
 Real Estate
 Home Stay
 Room Mate
 Job
 English Teaching
 Translation/Writing
 Job Offered/Wanted
 Business
 Hotel Lounge
 Foreign Exchanges
 Korean Stock
 Business Center
 PR & Ads
 Entertainment
 Arts & Performances
 Restaurants & Bars
 Tour & Travel
 Shopping Guide
 Community
 Foreign Missions
 Community Groups
 PenPal/Friendship
 Volunteers
 Foreign Workers
 Useful Services
 ST Banner Exchange
  Asia-Pacific
USA — Bail Outs Must Be Questioned after AIG Losses
By Lee Jay Walker
Tokyo Correspondent
Logo of American International Group (AIG)

The United States of America (USA) is going from one crisis to another and apparently the only answer is to throw more bad money at inefficient companies. After all, money keeps on being pumped into companies like AIG but nothing appears to change, apart from growing debt. Therefore, it is essential to question the economic policies of America because since the crisis began, it is apparent that the only policy is to bail out companies which appear to be in complete free fall.

So once more AIG is given taxpayers money and according to the mantra of President Obama, it is the same conclusion, spend tax-payers money and forget about any other alternative policy. Yet AIG could easily abuse tax-payers money in order to undercut their rivals and this is the problem. Once you intervene in the market, then the free market or capitalist system is undermined because of favouritism and unfair competition.

Therefore, if any respective bank abided by the fundamentals of banking, they should be rewarded for being efficient, conservative, and businesslike. Instead, inefficient banks or other financial institutions can just cry wolf and then go begging to Obama. After all, Obama appears to enjoy the publicity surrounding the injection of tax-payers money into many different sectors. Yet is big government the answer to the current economic crisis?

If we look at the Homeowner Affordability and Stability Plan we see the same flaws. After all, what Obama is saying, is that people who looked after their finances properly must be penalized. This can be the only conclusion, because people who took high risks or were greedy, are now going to obtain support from the government of America via conservative tax-payers who behaved properly. Is this a policy based on justice?

Jeffrey A. Miron, a senior and highly respected lecturer in economics at Harvard University, sums it up correctly. He states that "¡¦ government payments to troubled borrowers come from people who did not stretch their finances to buy homes, or who bought small, less expensive homes, or who economized on other expenses. That is, the plan penalizes cautious taxpayers to bail out those who took bigger risks."

Therefore, just like the financial sector, it is inefficient companies which are being supported and instead of natural consolidation or the demise of inefficient companies, we are seeing a "basket case" scenario where Obama seeks to massively increase both the national debt and the power of government. However, like Jeffrey A. Miron points out, "Insisting that borrowers, not taxpayers, bear the consequences of these questionable decisions would provide the right incentives for appropriate risk-taking. This applies to homeowners and bankers alike."

Therefore, real accountability is not being applied properly and prudent borrowers and companies are paying for something they never created. The natural logic being that in the future the same problem may arise but why worry, after all, the "nanny-state" of Obama or a future leader will bail you out. So individual tax-payers and companies which are efficient and paid vast sums in corporate tax, are now being told that they have to fork out once more in order to protect the people who created the economic crisis in the first place.

Obama, however, comes up with a different conclusion. For Obama states that "I know how unpopular it is to be seen as helping banks right now, especially when everyone is suffering in part from their bad decisions. I promise you, I get it. But I also know that in a time of crisis, we can not afford to govern out of anger." In truth, Obama may indeed be very sincere and of course the central government must do something but this must come via real policy objectives. At the moment, I fail to see real policy objectives apart from keeping companies and home-owners afloat.

Shankar Vedantam, Washington Post Staff Writer, states that "What Obama did not mention, however, is that saving banks and financial institutions has the unintended consequence of saving many bankers, CEOs, and Wall Street tycoons from the consequences of their greed." Therefore, Vedantam supports a middle way between the rationalism of Obama and the every-day anger of many tax-payers. This middle way, explains Vedantam, is that you should "Pour taxpayer money into fixing broken institutions, but make sure those responsible for the catastrophe pay – and pay publicly."

Overall, I would argue that money spent on AIG and others, at the moment, is like one big "money black whole." It appears that companies like this just plead for more funds and at the moment, they get it. Yet no fundamental change is taking place, instead the Dow Jones is either in free fall or it is static, and corporate and national debt just keeps on rising. Sooner or later, if the situation does not change, you will see greater social tensions and government policy will come under real attack. Therefore, will Obama take real measures to reverse the crisis or will he just keep on throwing money in all directions?

Lee Jay Walker
leejayteach@hotmail.com
THE SEOUL TIMES



Related Articles
    Myanmar, Bangladesh Sign an Accord but ...
    Japan Hopes to Boost Ties with Myanmar
    Drugs Crisis in Iran Emanating from Afghanistan
    Mexico Resembles a Civil War: Three Murders ...
    "Door Remains Open," French President Says
    President Trump and Ousted FBI Chief Comey: ...
    Moon Jae-in to Become President of South ...
    America, China, Russia Should Work Together on ...
    The Fading Spirit of Kano Chikanobu Awakened ...
    Japanese Poetry of Kakinomoto no Hitomaro: ...
    Trump Offers China Economic Inducements If ...
    Syria & Khan al-Assal Massacre: Western ...
    United States Botanic Garden and Stunning Art ...
    Syria: FSA and Al-Qaeda in Power Struggle
    Syria and the Sponsored Revolution Costing ...
    South Korean Fashion and Kpopsicle: Summer ...
    Syria and Shia Massacred by al-Nusra: Gulf and ...
    Turkey & Discontent towards Premier Erdogan: ...
    UK, MI5 and Syria: Hypocrites, Somalia and ...
    Christian Clergy in Syria Held Hostage by the ...
    China and Japan Play Cat and Mouse over ...
    Cameroon and Nigeria: French Hostages Released ...
    Alyse Radenovic, Bratunac and Srebrenica: Art ...
    Japanese Art and Bunjinga: Tani Buncho, Power ...
    Italian Fashion and Simonetta Sala: Adorable ...
    France, UK Want to Send Military Arms Directly ...
    Political Crisis in Tunisia after Belaid ...
    World of Art: Yuzo Saeki and Alyse Radenovic ...
    Nuclear Test by North Korea and Need for a ...
    Israel Violates the Sovereignty of Syria
    Egypt, Muslim Brotherhood: President Mursi ...
    Japan Art: Erotic Art, Sexuality and ...
    Algeria Hostage Crisis: Japan Needs to ...
    Syria and Bashar al-Assad Addresses Powerful ...
    US, France, UK Support Islamism
    LDP Wins Election in Japan
    FSA Islamists in Syria threaten to kill ...
    Syria Needs Support to Defend Itself against ...
    Egypt, Jordan and Turkey: Political Crisis and ...
    Japanese Art, Culture and the Yamabushi: ...
    Israel, Gaza and Doha: The Sham of the Western ...
    Syria & New Charade: Gulf Nations Should ...
    Tokyo Fashion and the Exquisite Boutique ...
    Sudan, South Sudan Crisis & Int'l Community
    Claude Monet Was Smitten by Japanese Art: ...
    Japan Tourism and Fukushima: Abukuma Cave, ...
    Japanese Art and Saburosuke Okada: the Power ...
    Japanese Art and Tosa School: Tosa Mitsunobu ...
    Syria and Terrorist Threat from Opposition: ...
    Russian Federation Lambasts Anti-Syria ...
    Syria: Outsiders Support Terrorism and US & ...
    Japanese Art and Bunjinga (Nanga): the ...
    Ontoshiki Is a Stunning Photographer in Tokyo: ...
    Japanese Art and Van Gogh: Japonisme, Ukiyo-e ...
    Associated Press Opens a Bureau in Pyongyang
    Fashion in South Korea: Kpopsicle & the trends ...
    Japanese Buddhist Art at the National Museum ...
    Japanese tourism: Jigokudani Monkey Park in ...
    South Korean Fashion: Kpopsicle, International ...
    BoA Releases Stunning New Song "Milestone"
    K-Pop and New Mini-Album Called "Snow Pink" by ...
    La Carmina and Tokyo: Alternative Fashion, ...
    K-Pop and T-ara in Japan: Stylish, Energetic ...
    Kanstyle Magazine to Open Up South Korean ...
    Tokyo Fashion: Jiyugoaka Is Trendy and a Great ...
    Korean Pop Music Continues to Hit Heights in ...
    Yoshihiko Noda to Become New Prime Minister of ...
    Japan and the Political Farce: The Race Is On ...
    Tokyo tourism: Mount Takao-san Is a Stunning ...
    Ryo Ishikawa: Near to Making a Breakthrough at ...
    Lindsay Ann Hawker: Verdict Is Life in Prison ...
    Hokusai & Hakone: Ukiyo-e & Stunning Scenery
    Lindsay Ann Hawker: Does the Joji Obara/ Kim ...
    Burma (Myanmar): Free Burma Rangers update
    Japan & Child Abduction: Interview with Sonia ...
    Novak Djokovic Beats Rafael Nadal to Claim ...
    Kawanabe Kyosai: the Underworld and the ...
    Tatsuya Ichihashi Admits to Killing Lindsay ...
    Utagawa Kuniyoshi: Tranquil Art and Natural ...
    Southern Thailand and Islamization
    Islamic Terrorism: Afghanistan to Bosnia and ...
    IslamicJihad within the Territory of Russia
    Muslims Burn a Christian Alive in Pakistan
    Radical Islam and Terrorism in the Balkans
    Pakistan and Ongoing Christian Persecution
    Turkey Is Trying to Dictate to Armenia
    Bosnia and Clinton's Radical Islamists
    Iraq's Jewish Identity Faces Extinction
    Muslims Slaughter Christians in Egypt
    Somalia and the Reality of Radical Islam
    Racist Ishihara Fails to Get 2016 Olympic Games
    Daily Life in Japan and Isolation
    USA and the Internal Islamic Threat
    Indonesia and Ba¡¯asyir, the Preacher of Hate
    Nigeria and Christian Martyrs
    Indonesia and Islamic Terrorism
    Aceh in Indonesia Passes Stoning to Death Law
    2016 Olympic Bid and Racist Governor of Tokyo
    Randy Collins and Child Abduction in Japan
    Islamic Militants Target Buddhists in Thailand
    Bangladesh Destroys Hinduism, Buddhism
    Child Abduction in Japan: Shane Clarke Case
    Islamic Ramadan Begins, Blood Keeps Flowing
    Kosovo and Ongoing De-Christianization
    USA Appeases Islam under President Obama
    Somalia, UK, and Killing of Christians
    Buddhists Fear to Walk in Southern Thailand
    Pakistan Must Abolish the Blasphemy Law
    Pakistan and Burning Alive of Christians
    Nigeria Challenged by Radical Islamists
    Somalia and Christian Martyrs Killed by Muslims
    KOSOVO & Systematic Persecution by KLA
    Japan Ignores Child Abduction because of Racism
    Japan Allows International Child Abduction
    Ethiopia Continues to Develop under EPRDF
    Saudi Arabia and Why Child Marriage Is Allowed
    China Faces a Fresh Bout of Ethnic Hatred
    Islam and the Myths of Unity and Peace
    IRAN Enters a Political Minefield alongside ...
    Islam Needs to Be Challenged by True Democracy
    North Korea's Point of View
    Myanmar: Ethnic Minorities & Aung San Suu Kyi
    Colombia and Extrajudicial Killings Scandal
    IRAQ and the Destruction of the Mandaean ...
    Non-Arabs of the Middle East and Persecution
    USA Is Worried about Events in Pakistan
    USA, CIA Created Sunni Islamic Terrorism
    Pakistan Faces Internal Threat
    N. Korea Pulls Out of 6-Party Talks because of ...
    Japan under Ishihara Must Not Be Given the ...
    USA Is Looking at Plan Colombia in Order to ...
    MYANMAR – Karen Christians Face Joint ...
    Bolivia under Morales and the Indigenous Issue
    Mexico -- Drug Cartels and the American Market
    Saudi Arabia Allowing 8 Year Old Girls to ...
    Ethiopia under Prime Minister Meles Zenawi
    Europe Is Facing a Real Economic and Social ...
    USA is Deeply Concerned about Pakistan and ...
    USA -- Obama Is in Free Fall at the Moment
    Japan Must Not Be Rewarded the 2016 Olympics ...
    China, Russia Rebuke America at World Economic ...
    PAKISTAN -- Radical Sunni Islamists Are Now ...
    EU Is Alarmed by Gas Dispute between Russia ...
    USA -- Obama Faces Major Internal and External ...
    Zimbabwe Now Faces Cholera Epidemic alongside ...
    Pakistan and the Persecution of Ahmadiyya ...
    USA -- President Bush Is Trying to Contain ...
    India Becomes Yet Another Major Victim of ...
    Japan Needs to Create an Independent Foreign ...
    Mongolia and The Importance of This Nation to ...
    Islamic Radicals Support Stoning Women, ...
    Inflation Threatens to Engulf Vietnam and The ...
    Turkey and The Secular Card, Myth or Reality?
    Ethiopian Ambassador to Japan and Third ...
    SOUTH AFRICA, Race Attacks and Underlying ...
    EGYPT -- Coptic Christians Are Still ...
    Ethiopia Needs International Support to ...
    Armenia and Azerbaijan Are Still in Dispute ...
    Kosovo and the Crisis of Ignoring ...
    The UN Is Undemocratic and Manipulated, So ...
    America Is Seeking to Contain the Russian ...
    Iran Is a Stabilizing Power in Afghanistan and ...
    Venezuela -- Chavez the Enigma, a Great or ...
    Lebanon Needs to Dismantle the Armed Forces of ...
    Iraq and Destruction of Christianity since ...
    Bolivia Is Facing Meltdown So Can a Solution ...
    Macedonia Could Become the Next Balkan ...
    Russia Faces Many Security Concerns
    State Intervention Versus Globalization and ...
    Ethiopia and Its War against Radical Islam and ...
    PM Fukuda of Japan Resigns and This Nation Is ...
    Japan Needs Stability in a Time of Urgency
    Russia Responds to America's Intimidation
    Russian Federation & Next Stage of Development ...
    Market Confidence Remains Extremely Mixed
    Why China Needs to Modernize Her Armed Forces
    MEXICO -- President Calderon Is in a Flux ...
    Iran and America, Friends or Foe
    Georgia Took a Huge Gamble in South Ossetia ...
    Japan and the Suicide Problem
    Zimbabwe: Can Morgan Tsvangirai, Arthur ...


Lee Jay Walker serves as Tokyo Correspondent of The Seoul Times. He specializes in int'l relations and geopolitics. He is also involved in analyst work and research on business. After finishing BA degree in East European Studies at the University of London, He earned MA degree in Asia Pacific Studies in Nottingham Trent University. He also studied business at London Institute.

 

back

 

 

 

The Seoul Times, Shinheung-ro 36ga-gil 24-4, Yongsan-gu, Seoul, Korea 04337 (ZC)
Office: 82-10-6606-6188 Email:seoultimes@gmail.com Publisher & Editor: Joseph Joh
Copyrights 2000 The Seoul Times Company  ST Banner Exchange