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Bitter about the bailouts


Thursday, September 18, 2008




Is it the U.S. government's responsibility to bail out businesses on the brink of bankruptcy? Just this year, the federal government has bailed out AIG, Bear Stearns, Freddie Mac, and Fannie Mae.


Michael A. Hiltzik of the Los Angeles Times sums up recent months as follows: "The federal government has put up nearly $30 billion to avert a major financial default by the investment bank Bear Stearns; committed to investing up to as much as $200 billion in preferred stock of the loss-plagued finance giants Fannie Mae and Freddie Mac and at least $5 billion in their mortgage securities; and agreed to provide an emergency loan of $85 billion to American International Group Inc. in return for an ownership stake of as much as 80 percent in the stricken insurance giant."


I think it is not the government's responsibility, and it is just bad business. I could understand the Fannie Mae and Freddie Mac transaction given its repercussions on homeowners under their umbrella and the present status of the housing market; however, I cannot help but be disgusted that the government is now, essentially, in the real-estate business.


I think these bailouts set a bad precident, and in some cases rewards high-paying executives with potentially bad business practices. Hiltzik perhaps says it best:"critics contend that bailouts often encourage bad behavior by relieving underperforming industries of the consequences of their ineptitude."


Others in the know anticipate that more and more corporations will soon approach the government, hand extended.The government should be a helping hand to its beleagered citizens (kids and seniors without food, heat, and healthcare), not rich executives who gambled and lost in the corporate world.

Post a Comment

1 Comments:
Blogger willija5 said...
Very well stated Courtney, I agree with your comments.
The root cause of the corporate failures is the Board of Directors' lack of being held personally responsible for not taking corrective actions, even when solutions are obvious.
As a result, we have established greed as the accepted motivating factor
in Corporate America.
Any bailout should include
a purging of all top management and Boards of Directors.
Hopefully they will not be accepted to run for political offices.
Jim Williams
An average citizen.
Friday, September 26, 2008 10:37:00 AM EDT  


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Welcome to the lighter side of Military & Aerospace Electronics. This is where our staff recount tales of the strange, the weird, and the otherwise offbeat. We could put news here, but we have the rest of our Website for that. Enjoy our scribblings, and feel free to add your own opinions. You might also get to know us in the process. Proceed at your own risk.

John Keller for MAE
John Keller is editor-in-chief of Military & Aerospace Electronics magazine, which provides extensive coverage and analysis of enabling electronic and optoelectronic technologies in military, space, and commercial aviation applications. A member of the Military & Aerospace Electronics staff since the magazine's founding in 1989, Mr. Keller took over as chief editor in 1995.


Courtney Howard for MAE Courtney E. Howard is senior editor of Military & Aerospace Electronics magazine. She is responsible for writing news stories and feature articles for the print publication, as well as composing daily news for the magazine's Website and assembling the weekly electronic newsletter. Her features have appeared in such high-tech trade publications as Military & Aerospace Electronics, Computer Graphics World, Electronic Publishing, Small Times, and The Audio Amateur.


John McHale for MAE John McHale is executive editor of Military & Aerospace Electronics magazine, where he has been covering the defense Industry for more than dozen years. During that time he also led PennWell's launches of magazines and shows on homeland security and a defense publication and website in Europe. Mr. McHale has served as chairman of the Military & Aerospace Electronics Forum and its Advisory Council since 2004. He lives in Boston with his golf clubs.