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Set your hypocrisy radars on high alert. Just don’t expect anyone to reconcile the AIG bailout with the values of a government supposedly in thrall to the belief that the market is the ultimate arbiter of all that is good and true.

As we’re learning, the market can dish out some ugliness, too. But is it really a new lesson? Not for the workers who used to make Ford minivans. Or the workers that used to make toys, lawn mowers and televisions. Nor is the market’s ability to inflict pain news to anyone who has to fill up a gas tank or pay for their own health insurance.

But in all of those cases, we let the market do its work, or at least profess faith in its ability to do so over the long run – if, for example, we could clear out those silly government bans on offshore drilling. But when you’re an investment bank or an international insurance company, I guess drill, baby,  drill – or retrain, baby, retrain – isn’t the answer. The answer is a multi-billion-dollar loan.

I laughed when morning news anchors on CNN lamented AIG’s interest rate of 11.5%, calling it high and an incentive for the company to look elsewhere. Funny, but I don’t recall any journalists wringing their hands over the rates charged to people with credit cards (20%-plus) or the rates charged to subprime borrowers.

Seems to me, if your business is a credit risk and teetering on the edge of collapse, you should pay higher rates. No lender throws good money after bad at a low rate. Well, not anymore, anyway.

Another ridiculous argument in all this is the claim that the collapse of AIG would lead to higher borrowing costs. Higher costs for whom? Certainly not for people buying cars and houses, the two major purchases for most consumers.

The automakers would go lower than 0% if they could and I don’t see that changing – unless they get a bailout of their own. The same incentives apply to housing. If rates rise, home prices likely will fall, making them more affordable in the long run, not exactly the worst news in the world.

Yes, it sucks if you already have a house and the value falls or simply doesn’t go up year after year. But look on the bright side. You own a house. And now you own an insurance company, or at least a 79.5% stake in one. I can’t wait for my first dividend check.

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Say what you will about the contest to see which presidential candidate (and which presidential candidate’s wife) is more patriotic. At least it managed to knock Bill Clinton back out of the headlines. The economy, the war, fuel prices, none of that stands much of a chance of seeing much airtime anyway between now and November.

I nearly fell down laughing when I heard someone on CNN talk about how the patriotism debate switched the topic of most news away from the economy, etc., an alleged switch that apparently benefits John McCain. I just don’t remember hearing much about those other issues. But I do recall heated exchanges over the motives and whereabouts of Bill Clinton in the aftermath of the Democratic primary.

I can’t quite understand the media’s fascination with the Clinton-Obama story line. Well, no. I can, given the obvious drama. But it seems that health care, the housing crisis, the war in Iraq all offer plenty of drama, too. They’re just more complicated and require a little more digging outside the beltway. Just don’t expect anyone to pick up a shovel.

In the meantime, I suspect Barack Obama is going to start taking a real beating from the netroots, given his penchant for announcements like this and this. But I suspect the campaign must believe it will help Obama appear more centrist if he is consistently under attack from the left. After all, the same strategy works for McCain, only with attacks coming from the right.

Obama’s decision to spurn public financing and the resulting storm, I first put down as some inside-the-beltway issue that wouldn’t much resonate. But the more I think about it, the more I think he made a mistake there. You don’t jettison systems or principles you supposedly believe in just because they’re inconvenient. Isn’t that the lesson of the last seven-plus years?

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