After reading how AIG spent taxpayers’ money, I wanted to respond to two things folks have said to me about our burgeoning economic nightmare. Be forewarned: I know very little about economics, and I shouldn’t even be talking about this publicly. However, what are blogs for if not to espouse uninformed opinion.

When my father started going off about how Obama is going to raise our taxes and I started going off about how that’s a lie, Dad threw this little bit at me: “Why do the Democrats insist on punishing the rich for being rich? It’s not like the poor pay any taxes anyway.” The government needs to get their money somehow, right? So if it’s not getting it from the people who can afford it, it’s raising fees or selling debt to the Chinese, neither of which is good for anyone. Don’t get me wrong — I understand that if you raise taxes on corporations, that tax money may come out of salaries and benefits. But individuals? If a person making more than $2,500,000 a year has a problem with paying an extra $300,000 a year so that our country isn’t in debt and we can improve our workforce by improving education, then that person should go screw themselves. (Then Dad started saying that Obama is a Muslim, and the conversation ended there.)

A client and friend of mine suggested that the problem is not a need more regulation. The problem is we aren’t enforcing the regulation that already exists. As he put it, “If the animals escape from the barn, don’t lock the door to the barn so they can’t get in.” Well, he has a point, but that barn, though, is collapsing in on itself. Deregulation (like the Commodity Futures Modernization Act and the Gramm-Leach-Bliley Act, both of which, incidentally, were signed by Bill Clinton) opened the door for subprime mortgage securities. There was a reason why FDR only wanted banks to worry about loaning money and let other firms worry about investments.

Other than that, I’m clueless about what’s going on. If economists support Obama 2-to-1, that’s good enough for me.

Update 10/10/08: I really forgot to change the title of this piece after I wrote it. It started out as one thing and became another. Neverthless, this seems like as good a place as any to point out that AIG loves retreats. (Via.)