Holy Profitable Bailouts, Batman!

[xthread]

Wonders will officially never cease.
As of early this morning, AIG (remember them? the people who thought it was a good idea to insure every mortgage-backed security in the country, and promised to make good to the MBS investors if the homeowners didn't pay their mortgages? used to be the largest insurer on the planet) has prepared a plan for paying back the Federal Bank of New York and the US Treasury. We had expected that AIG was going to be one of the two remaining sources of losses in the 2008 federal bailout of the US financial system.

We were wrong. Now both Chrysler and AIG are expecting to return profits to the federal treasury, instead of losses. The dickering now going on between the Fed, the Treasury, and AIG, is about how much money the US Gov't will make on having prevented the world bond market from collapsing. Pretty neat.

Although it does present a problem for Tea Party governance - if we're actually making money on the financial system bailout, stopping that spending won't improve the state of the federal treasury. (As a side note, we've also come out ahead on the Chrysler deal, which is actually more surprising than AIG making money - a bunch of economists were reporting at the time of the AIG bailout that the Feds should make money on it, but should and three bucks will get you a cup of coffee at Starbucks. No one was nearly that optimistic about Chrysler)

Comments

[xthread.livejournal.com]

You mistake me - I agree, you're not going to convey much of this was a good idea to people who have a committed notion that we just poured a phenomenal amount of money down a sinkhole. But I think that we can have a useful conversation, even with people with vehemently disagreeing points of view, about what we should do going forward. In particular, when they're proposing an objective (reduce public debt) and a strategy that are in conflict (curtail public income), I think asking which of those objectives is more important to you? is a useful question.

But I neglected to answer your basic question, how to boil the bailout figures down: To keep the entire banking system of the country from going under, and to keep the entire Midwest from going into a much, much more serious depression, we've spent less than $200 per person in the country. That sounds like pretty good value for money.

But I still think it's the wrong argument - it's arguing about how they feel about the past, and those kinds of arguments rarely end well.

[feyandstrange.livejournal.com]

Can we calculate *profit* per person yet? Because that might work.

[xthread.livejournal.com]

Oooh... that's a very interesting argument. We'll definitely be able to once we actually wash into program-wide profit, which may be coming. Until then, harder.

Cue Demon Sheep
In 2008, Washington gave bankrupt Detroit Auto Companies and Wall Street Banks $800 Billion dollars. In 2009 and 2010, they gave $850 Billion back.

[feyandstrange.livejournal.com]

I'm thinking soundbite/T-shirt/bumper sticker:

"Democrats earned $25* for me by investing in America"

[xthread.livejournal.com]

Even then, we're pushing uphill against the narrative. People in general won't be able to rationally analyze what happened for another generation and a half, possibly three, because it's too tied up with what happened to me. It's not even a matter of waiting for what they did to our Susan to wear off.

[feyandstrange.livejournal.com]

Well shit, you want 'em to *rationally analyze* this stuff? You crazy optimist! I was just looking for a catchy sound bite to change their thinking and voting patterns.

[xthread.livejournal.com]

<look>
No, I just think the current narrative (we gave the banks all this money and look what it got us) is sufficiently well stuck in people's heads that for them to be able to see contradictory data will be basically impossible en masse.

[feyandstrange.livejournal.com]

Not if we repeat the contradictory statement often enough on bumper stickers and soundbites. People are swayed by such stuff, at least the ones who can't be arsed to actually think.