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More Symptom Treatments

Kudlow gets it right, that the bonuses are just a symptom — but then goes chasing after another symptom rather than the root problem:

This whole AIG fiasco — where the entire political class is suddenly screaming over bonuses paid to derivative traders in AIG’s financial-products division — is just a complete farce. What it really shows is how the government has completely bungled the AIG takeover. Blame the Bush administration and the Obama administration. It also shows, once again, why the government shouldn’t run anything, because it cannot run anything.

AIG should have been placed in bankruptcy last fall under some sort of government sponsorship.

He certainly nails the conundrum here — the government “cannot run anything”, and yet the best solution that he has for the AIG problem is to have the government step in and run it. In other words, there is no good solution to the problem — so the best we can do, by inference, is to make sure this type problem never arises in the first place. Exactly what I’ve been saying!