AIG - Fat Cat in America’s Kitchen
AIG is the oversized tabby perched on an empty chair before dinner, just waiting to snatch a morsel from some unsuspecting kid’s plate. Feeding this lumbering butterball any more of anything won’t help. The cat needs to go on a diet. Let’s toss AIG outside and let it fend for itself with all the other animals.
While using phony credit default swaps to generate enormous profits from fees, AIG failed to set aside enough money to cover the “default” portion of the swap. They assumed that Lehman Brothers would never go out of business and that the housing bubble would never burst. But that it is the job of an insurance company, to anticipate and plan for the unexpected. AIG is a lousy insurance company, unworthy of more handouts from the US Treasury.
Repeated bailouts of AIG are really just back door bailouts of the financial organizations that AIG insures, like former treasury secretary Henry Paulson’s old company, Goldman Sachs. Without the AIG cash infusions, those companies would falter as well. No one on Wall Street seems willing to deal with the consequences of their failed strategies, much less admit to having done anything wrong.
Federal Reserve chairman Ben Bernanke continues to claim that AIG is too big to fail. This is the group that received $85 billion from taxpayers last September, $65 billion last November and another $30 billion last week. And the company still can’t tell us how much more they’ll need. AIG has already failed.
AIG’s problems should be dealt with by the judicial branch of our federal government, not the legislative and executive branches. Insolvent companies belong in bankruptcy court.
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