News For The Day - 13 Jun 2009 pt 1

Lots of news today, apparently the news services don't believe in giving the public the weekend off, but have to keep our collective blood pressure elevated until we go back to work on Monday for ungrateful supervisors. Let's get started.

AIG Balks at Claims From Jet Ditching in the Hudson

We all remember this story, US Airways flight 1549 collides with some mutant seagull, and ditches in the Hudson shortly after take-off from JFK. Only the quick thinking and cool head of the former-military pilot ensures that everyone survives.

Everyone survived, no major injuries, US Airways is sitting pretty, mostly. Every passenger was advanced $5000 by US Airways for the 'inconvenience', based on the assumption that the air carrier's insurance would pick up the tab. And the kicker... US Airways' insurance underwriter is none other than the first bailout recipient, AIG.

Now AIG is riding the 'feel-good' vibe from this crash, namely that everyone survived, and basically telling the survivors that their medical bills are their own problem, any property that was lost is the problem of the property's owner, not to mention lost time, lost income, etc. Like most insurance companies, if they HAVE to pay out, they're trying to settle for minimum possible. One businessperson on that flight has received the $5k from US Airways, $5k from AIG, and is being offered $10k more to sign a waiver of liability. In this person's case, the $20k total would probably be sufficient (assuming no delayed-diagnosis injuries). But what about the mother with her two young children? Mom ended up with some pretty substantial stress injuries (whiplash etc), not to mention the fact that she and her children are in therapy for PTSD-type symptoms. $20k MAYBE for years of therapy, lost time, and soft-tissue injuries that may plague her for the rest of her life? Not likely.

Is this what we can expect from the companies that our wonderful government is bailing out? Seriously? What's next? The banks that the government's bailed out are going to jack up ARM rates again? Random fees on retiree's savings accounts? I would poke fun at Chrysler here, but they're screwing themselves pretty thoroughly already.

In my opinion, the companies that received the bailout money, as a general rule, should have been allowed to fail. Like natural selection, the weak will fall, and the strong survive. National and international banking has become a lumbering dinosaur, with customers referred to as numbers, instead of names. Give the opportunity for growth to smaller regional banks that have a solid investment strategy. Make corporations re-evaluate their insurance packages. This country is in desperate need of a shakeup. What better place than here, what better time than now.

Until Next Time!