It's been an exciting/terrifying day and a half watching the stock market. Yesterday, the Dow plunged more than 500 points, and it started today down over 100. Much of this loss, and pretty much all of the worries over the next several days, center on AIG, which is the world's largest insurance company and one of the companies that make up the Dow Jones Industrial Average. Stocks have been staging comebacks today on hopes that the federal government will step in and spend tens of billions (or more) of taxpayer dollars to bail AIG out from losses incurred by bad investments by the company.
(note: In future postings, I will endeavor to summarize the whole sub-prime/Bear Stearns/Lehman/AIG mess, but for now, just know that the government might be justified in preventing AIG's going out of business because it would screw over a lot of banks.)
Given all the money being spent by the federal government to bail out Wall Street investors, isn't it reasonable to ask investors to pay more in capital gains taxes, as Obama has proposed for people making more than $250,000 a year? Wall Street wants to share the risks of their investments with taxpayers, so shouldn't they also share more of the rewards?
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