"Government Bailout Plan"

By now we are all familiar with the government's bailout plan for Wall Street. It's been headlined in newspapers, news broadcasts, and on the Internet for the last week.

Now the question has come up about whether this bailout plan is capitalistic or socialistic. We must remember in this debate that we don't have a purely capitalist economy. It is not laissez-faire. It simply can't be due to the size of the corporations we have - sizes that couldn't have possibly been foreseen by Adam Smith. But I think that this debate is pointless. There are reasonable arguments on both sides but, we need to worry about whether or not the bailout will work and not what theory it is based on. If the bailout plan were to work and we chose not to use it simply because it might perhaps be on the socialist side, then we would deserve whatever ramifications would follow. With the basics that I have learned about both capitalism and socialism, it seems that at times one must be used to correct the other's flaws. We have to get over ourselves and be able to compromise. We can label a bailout socialist, communist, or whatever else comes to mind, but a one time deal does not make us neo-Bolsheviks.

Whatever happens we must learn from the mistakes that were made this time and never allow this to happen again.

"A.I.G. Bailout"

By now everyone is aware of insurance giant A.I.G imploding and requiring a Federal bailout of $85 billion. Folks, this is our money!

A.I.G. secures home mortgages based on the value of the home at the time of purchase. We all know that home values had been highly over inflated and the bubble has burst. As home values started to decline A.I.G. was forced to reduce the values of securities on the books. In other words, if 3 years ago the value of the securities was listed at $125 billion, today they are probably worth only $40 billion.

What A.I.G. did was make their stock prices look good trying to attract investors in order to bail themselves out of the predicament. This plan simply backfired.

Let's be honest. A.I.G. had to have known a long time ago that this problem was going to show its face. They also had to have known the risk involved in purposefully inflating their stock prices. Perhaps they figured if they couldn't bail themselves out, "Oh, well. The Feds will just come and save us anyway." The problem is their plan did fail. Today the Dow Jones Industrial fell another 300 points well below 11,000 - the lowest it's been since 9/11. Thanks to companies like A.I.G. people involved in the stock market are losing tens of thousands of dollars every day. People who were depending on their investments to fund their retirement are now forced to go back to work.

I've always had a strong faith in the American economy to be able to pull itself out of a hole. However, if these poor decisions keep happening whether by A.I.G. or any other multi-billion dollar organizations, the worst is still yet to come. I really hope that the other executives out there are watching and start to take into consideration the futures of the hundreds of millions of Americans dependant on the economy, rather than just their bottom lines.

"Ethics of Inheritance"

Inheritance is a hotly debated topic as we have obviously planned to discuss tomorrow in class. I found some information regarding Bill Gates and Warren Buffett. Both men feel that it would do their children more harm than good to leave them an overly generous inheritance. Both men feel their kids should have to earn what their parents have.

Bill Gates is leaving each of his children $10 million which is a tiny fraction of his multi-billion dollar worth. The rest is going to various charities. Warren Buffett intends to leave most of his worth to charity.

Let's put ourselves behind Rawls' veil of ignorance. If we place ourselves in the original position what principles can we say are truly justified regarding inheritance? Only these principals can give answers to questions such as:

• If one child is better at managing money than another do you leave both the same amount of money?
• If one child is a waitress and another a doctor do you leave both the same amount of money?
• Should a wealthy person be required to leave a certain amount of money to charity?

How would Libertarians or Utilitarians answer any of these questions?

A key point to remember here is one thing we learned in class yesterday - fair and equal are not the same thing.

To reference this article go to www.usatoday.com/news/opinion/colyrmn/yrmn081.htm

Thanks guys! I'll see you tomorrow.

"AVX Follow-Up"

AVX corporation has recently withdrawn its permit request to release the toxin toluene into the air. They have given no reason for this permit withdrawal. However, they have been under pressure from officials of the City of Myrtle Beach and from the residents who live near the factory regarding their release of toxins in the air and into the ground.

This permit withdrawal has not been enough for the officials of Myrtle Beach. As I write, they are considering the pros and cons of even having AVX in Myrtle Beach. They are weighing the benefit of having AVX and the job opportunities they provide along with the taxes they pay against the well-being and health of the residents near the factory and also the possible effect on tourism. They are considering enacting legislation regarding pollutants that would essentially force AVX out of Myrtle Beach.

This is a struggle between two egoist viewpoints. On AVX's side their bottom line is important and to save their public image they withdrew the request. On Myrtle Beach's side it is a stuggle between the economic benefit of having them located in the city and the protection of the citizens.

An interesting point to ponder is - has AVX used the permit withdrawal as a smokescreen to go ahead and release these toxins anyway? Unethical? Yes. Possible? Yes.

These articles can be found in the Sun News Aug. 30 and Aug. 31 editions. They can also be found at www.myrtlebeachonline.com

Senator Larry Craig and his dirty bathroom secrets!!

Do you all remember last year when Senator Larry Craig was arrested by an undercover cop in a Minneapolis airport for soliciting sex in the men’s bathroom? There are so many ethical issues that go along with this case that I don’t know where to begin. First of all, when the officer asked for Craig’s driver’s license, he flashed his business card and said “What do you think about that?” The officer responded by putting the card back on the table and repeating his request to see Craig’s driver’s license. Craig was clearly trying to use his position to get out of the situation. Secondly, he pleaded guilty (in writing) and paid the fine associated with the charge. The only reason he “supposedly” did this was because he claims he thought by pleading guilty his case would not become public and he could just move on with his life. But, if he was innocent, why would he knowingly misrepresent that fact by pleading guilty? This goes against everything that our constitution stands for! Then, after pleading guilty, he tried to withdraw his guilty plea (which was denied) and has racked up attorney fees of over $200,000, of which you guessed it, he has paid for with campaign funds (not his personal funds). Anyways….I am going to finish blogging for now, but stay tuned because I am definitely going to follow this story!

To read related articles click on the following link:
Senate panel to Sen. Craig: You discredited the chamber - CNN.com