You can watch Santelli freak out here. Let’s address it briefly. Santelli asks, and it is a perfectly fair question that people should be asking, why should my tax money go to bail out my neighbors?
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Now your loser neighbors start defaulting (it is significant that Santelli specifically uses the word neighbors). As their houses get repossessed, they get boarded up, the grass gets high, and your suburb turns into a squatter village as it returns to nature. Now your dream house is worth fuck-all and the mortgage on the house you are paying on a house you don’t want anymore is much greater than its value. And good luck selling it. See where this is a problem? And that’s just on the most selfishly microeconomic level.
The ongoing bailout of AIG, which comes up in Stewart’s bit on CNBC, is probably the most important story in the financial crisis, at least in the immediate present. Basically, we’re not so much bailing out AIG as the people who bought AIG insurance on their shitty high-finance bets. Which isn’t really insurance, since AIG didn’t have enough money to insure these deals. And we don’t know who those people are, and the administration isn’t telling us.
TPM is doing a fantastic job trying to unravel the AIG bailout, building off of reporting from the NYT and the WSJ. Zachary Roth rounds up some of the likely culprits here.
