Hmmpost

Readers already know I was adamantly against the bailout. I’m against bailing out any insurance company, any automaker and, well, any company period. Why has 2008 become the year of the bailout? America isn’t about bailing out businesses. If your business — or mine — isn’t free to succeed and fail, that’s not business. That’s not America.

This morning, CNN shared a pie chart of where the $700 billion bailout money is going pictured above. $40 billion of this money has gone to AIG which has now been caught in two junket scandals after receiving bailout money. They are still losing money, says the article: The insurance giant reported a $24.5 billion quarterly loss yesterday … Those record losses come on the heels of a government-extended $85 billion loan to AIG in September, followed by $38 billion more in October as the company teetered on collapse.

Why do we keep propping up this company?  It sounds like we aren’t just giving this money to AIG without any strings attached, it is a 10% loan, but does this seem like a smart investment? I don’t think so. It’s not just the American auto industry, retailers are hurting too. Circuit City filed for bankruptcy this week and Best Buy lowered their profit forecast after showing same store sales down almost 8%. They are labeling these times the most difficult climate they’ve ever seen (emphasis mine): "In 42 years of retailing, we’ve never seen such difficult times for the consumer," Brian Dunn, president and chief operating officer of Best Buy, said in a statement. "People are making dramatic changes in how much they spend, and we’re not immune from those forces."

What’s next, bailouts for American retailers? Hope not. President-elect Obama, who I voted for, wants to see some Amercian auto companies bailed out during his transition period. Bailouts are one area Obama has it wrong. McCain was for bailouts too, so a vote for him would have been no better in this regard. Don’t get me wrong, I don’t like seeing people lose their jobs and I realize the big American automakers (GM, Ford) are in trouble, but where these businesses fail, others will come in and take their place if it is meant to be. And people can get jobs working for those businesses. Or maybe it’s time to change to a different industry? Damage done since the government already agreed to the $700 billion, how the pie gets served up is worth discussing. Should companies like GM and Ford get the money over AIG? What about retailers? How far do these bailouts go?