Treasury Bailing Out AIG Again

November 10, 2008 by Pelikan
Filed under: Bailout Bill, U.S. Congress, U.S. Economy, U.S. Financial Crisis 

Will There Be Spa Trips and English Hunting Excursions This Time?

I sure hope the executive pigs at AIG get it this time.  After all, the last time our tax money was used to prop up their failing business, they spent hundreds of thousands on a West Coast spa and an English hunting trip.

This morning, the U.S. Dept. of Treasury announced the federal government was upping the AIG bailout ante by $40 billion — bringing the taxpayer funded tab to keep the company solvent to $150 billion.  Additionally, AIG is getting a better deal today on the interest it is paying the federal government for loans the public is backing.  As this once shining capitalist jewel becomes nationalized, that means the public accounts will reap less from the bad business decisions sown by AIG executives.

One must also remember that just weeks ago, New York Attorney General Andrew Cuomo told the insurance company that he was able and willing to ‘help’ them do away with golden parachutes, executive pleasure outings and huge bonuses.  Then, U.S. Rep. Henry Waxman found that former AIG exec Joseph Cassano, who ran the company’s financial products section into the ground and left AIG in February was being paid $1 million a month - for nothing - even as the company slurped up taxpayers’ money.

What caused the federal government’s action today is a dreadful earnings report from AIG.  Third quarter “earnings” were actually losses of nearly $25 billion.  AIG is also thought to be ass over teakettle involved in the toxic credit default swap market, a potentially $50 trillion bubble lurking out there from New York to Hong Kong.

If you are infuriated, you should be.  Who’s at fault - or at least - who’s at fault whom the public could possibly hold accountable?  My answer would be any federally elected official from the mid 1990s to today who had anything to do with de-regulating or oversight of the financial services industry.  This includes both the Clinton and Bush Administrations and the Republican and Democratic Congresses of the past decade.

It remains unbelievable to me that on one hand we have a new president who wants to fix the system and yet he’ll be dealing with the likes of U.S. Rep. Barney Frank, chairman of the House Financial Services Committee.  Frank is one of the smartest people on the Hill, but like a pig at the trough, he’s used his smarts and power to pave the way for Wall Street as they took the country’s economy down the toilet.  He’s been handsomely rewarded in campaign contributions for turning a blind eye.

As we bailout companies like AIG, it would be nice to see U.S. House Speaker Nancy Pelosi and U.S. Senate Majority Leader Harry Reid force some changes in Congressional committee leadership.  Now is the time for honest brokers - if there are any - to help Barack Obama clean up this mess.

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One Comment on Treasury Bailing Out AIG Again

  1. Mona on Thu, 13th Nov 2008 12:14 am

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