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AIG: Ain’t It Great!!!

Posted by Larry Doyle on March 18, 2009 8:54 AM |

Where can one generate billions in losses and still walk out the door with millions in compensation? Welcome to AIG, now known here at Sense on Cents as “Ain’t It Great!!” 

As details leak out of Congress as to who knew what and when did they know it, the level of political posturing is soaring. Senator Charles Schumer (D-NY), who has fed at the Wall Street trough for years, offers us these pearls of wisdom: “We intend to do everything in our power to prevent the payments from being made and to recoup the payments that have already been made. We will take this back and return it to its rightful owners, the American taxpayers.”  Chuck, where were you six months ago when the initial AIG loan was negotiated?

The one individual who has been involved with the AIG fiasco from the very beginning is current Treasury Secretary Tim Geithner. While head of the New York Federal Reserve, Geithner and then Treasury Secretary Hank Paulson negotiated the terms of the AIG bailout. The WSJ is reporting that an Obama “administration official said that despite having engineered the first two rescues of AIG while president of the New York Fed, Mr. Geithner didn’t know about the pending bonuses until last week.”

If you believe that, let me talk to you about a bridge I’m trying to sell!!

Where is this situation headed? In my opinion, we will see a litany of Congressmen publicly whine and bellow for their constituents. Ultimately, I am willing to bet that Treasury will indicate they will retain an equal amount of AIG’s operating earnings as was paid in bonuses. In the process, Treasury will claim that they got the money back.

That charade is the equivalent of giving somebody $10, taking $5 back and claiming the taxpayer is made whole.  What a joke!

Washington and AIG are trying to dodge bullets in this firestorm and hope it blows over. However, I firmly believe the populist outrage on this issue, targeted primarily at Geithner, will be a noose around the Obama administration and Congress for an extended period.  

“Ain’t It Great!!””

LD

  • fiscalliberal

    Last night Charlie Rose had on: Hank Greenberg, Carol Lomis, Gretchen Morgenstern and Meridith Whitney.

    It interview flowndered a lot in that nobody except Merideth had anything to say regarding AIG. Rose kind of got desperate in terms of pressing for answers. Merideth made a couple of good points in terms of empowering smaller banks and insight into the Credit Card status. They kind of talked about what happened at AIG-Financial Products.

    When it was all said and done, I came away amazed at the lack of relevant information. As we used to say back at the farm: Barking at the Moon

  • Larry Doyle

    Sounds like an opportunity lost. Regrettably it seems as if many politicos and executives have taken the “Larry King” approach. That is, I will come on your show but if and only if you stick to a prescripted agenda.

    As a result, we get a whole lot of nothing.

  • lizzy

    Love the name Ain’t It Great! Hopefully the outrage over bonuses and Madoff will bring people to insist on true reforms, not Obama lipflapping and brick wall transparency. I would suggest that we vote the whole crew out, but new people seem to be corrupted in the blink of an eye. I have been trying to read some of your recomended sources. It is slow work for me but well worth the effort. Thanks for making the information available to us.

  • Larry Doyle

    Thanks for the plug. Lots of good stuff here. Enjoy!!

  • The thing that irks me most with guys like Barney Frank is, the deal that he signed months ago with AIG, SPECIFICALLY, references the fact that bonuses would be paid out. Now he acts “holier than though” with his histrionics that “we will sue them and get our money back”. Give me a break! Simply disgraceful pandering!

    • Larry Doyle

      Craig,

      Welcome to Sense on Cents!! Visit and comment often. I also find it amazing how the poliitcal pandering is not more fully exposed. Why does that happen? The media is also largely in the tank with the pols.

      Your point is very well taken. The Dems eliminated a provision in the stimulus bill that addressed compensation for organizations taking government money. Now they are all running for cover. If it weren’t so pathetic it would be comical!!






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