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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






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