The author treats Oracle’s selloff and Sam Altman’s uncertainty as a possible AI-bubble warning, and argues the real risk is a 2008-style bailout justified by a “second Great Depression” claim he calls false.

Predicted rescues include taxpayer stakes in OpenAI, Anthropic, or SpaceX, below-market loans, extra contracts, and loan guarantees—sold as cost-free but, he says, transfers to owners who already fund both parties.

He wants the market to stop overbuilding data centers, and criminal liability for AI systems that break into other firms’ systems, not self-regulation or soft government oversight.

The end-of-the-week meltdown of Oracle, coupled with Sam Altman’s admission that his Open AI team has no idea what it’s doing, has many hoping that the AI bubble is about to burst. It’s too early to know whether we have yet seen the Bear Stearns moment of the AI bubble, but we should be on guard against another bad moment of the housing bubble: the bank bailouts.

To remind folks, when most of the major banks’ greed put them at the edge of bankruptcy as the housing bubble collapsed, the government rushed to the rescue with trillions of dollars of cash, loans, and guarantees. They justified this massive intervention with the Big Lie: if we didn’t save the banks, we would be hit by the Second Great Depression.

The Big Lie was solemnly repeated in both opinion and news pieces across the political spectrum. Leading Democrats, like soon-to-be President Obama and House Speaker Nancy Pelosi, pushed it as hard as then-President George W. Bush and his cabinet. Dissenting opinions were largely excluded from polite discussion.

To be clear, allowing the free market to work its magic and put most of our largest banks out of business, along with many smaller ones, would have made the recession worse. But it would have done more to reduce wealth inequality than twenty Piketty wealth taxes. (Everyone’s bank accounts were guaranteed by the FDIC, so........

© Eurasia Review