Munin
VIP Member
- Dec 5, 2008
- 1,308
- 96
- Thread starter
- #101
In a capitalist system, failure isn't the catastrophe you guys pretend it is.
Let's look at AIG. Had AIG "failed" (instead of being stupidly propped up on the false pretense that it could not be 'allowed" to fail) it's business would have gone ELSEWHERE. It's loss (a pruning of the dead branch) would very likely have assisted and helped nurture some of its competitors. The deservedly FIT would have survived. The SYSTEM should have been allowed to prevail.
Your concern with the temporary consequences of an economic dislocation (like AIG going bankrupt) OVERLOOKS the CONSEQUENCES that propping it up causes. Opportunities FOR other Insurance conglomerates were thereby lost and some of those competitors could go under, instead.
No thanks.
You guys keep your Marxist nonsense to yourselves. As for the rest of us, we prefer our LIMITED Government and capitalism. Do try to butt out, as OUR CONSTITUTION actually requires.
It is not marxist, you fail to acknowledge basic economic principles. If an economy is in a deep crisis and a massive bank falls over it will have longlasting consequences (compare it with a person being seriously sick, almost dying and kicking him in the stumag. If he s healthy this would not affect him very much, but when he is very vulnerable it may have long lasting consequences for him). Your limited knowledge makes you assume that everything you do not understand and moves more to the left than your left ear is marxist.
Your reasoning works for a cigaret company (example that works), because if a sigaret company goes broke it doesn't mean that their customers go broke as well. Therefor the customers that previously bought cigarettes from this brand will now buy from another brand: no harm done.
Big Insurance companies + banks, a hole different issue: customers of these companies will have huge financial losses if their go banks/insurance companies go bankrupt, as a result a huge number of people and other companies will be "infected" by its fall. For insurance companies: numerous assets will be decreased in value (especially products from other banks: which may then again cause more bankruptcies). There are only long term opportunities when 1 company breaks down in a deep economic crisis, customers that loose money can not invest the money they lost (and you d be surprised how many people put all their eggs/money in one basket/bank)!
Point in case: Lehman Brothers, any economy professor will tell you that the fall of Lehman Brothers had a profound impact on the worsening of the economic crisis.
Another point in case: Collapse of the Kaupting bank of Island resulted in the bankruptcy of Island.
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