Seeing millions, missing billions
Here’s the difference between the current New York attorney general and the former one: The first is focused on AIG’s millions, while the second is focused on AIG’s billions.
Andrew Cuomo, the current New York AG, lunged after the $165 million in bonuses paid to AIG employees last week like a bass after a cricket. I’m sure he means well, but Cuomo’s subpoena demanding the names of the bonus recipients has “grandstand” written all over it. After all, AIG is now 80 percent owned by the federal government; the bonuses don’t seem like a state matter.
More to the point, the other news about AIG to surface in the past few days dwarfed, both literally and figuratively, the bonus issue. That news, of course, was that more than half of the $173 billion in bailout money (aka our tax dollars) given to AIG by the U.S. government was quietly transferred to American and foreign banks as repayment for investments they made with the troubled firm. In short, AIG essentially was used to launder under-the-table bailout money for banks.
Bet you didn’t know that $50 billion in bailout cash given to AIG actually went overseas, did you?
In contrast to Cuomo, former New York AG Eliot Spitzer — whose brain, now that he presumably no longer consorts with hookers, has returned to its proper operating position, well north of his belt — has zeroed in on the billions. In an article in Slate, Spitzer asks an obvious question:
Why are AIG’s counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?
He then answers his own question:
So now we know for sure what we already surmised: The AIG bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already.
Between these twin revelations of bonus and bailout, AIG has become (as a writer for the Toronto Globe and Mail put it), “the cigar that keeps exploding in Barack Obama’s face.” But the weekend’s revelations also demonstrated the difference between going for applause and going to the heart of the matter.
March 18th, 2009 at 7:40 am
Ok. So, AIG was in position to go down because it couldn’t pay its bills. It gets money and makes the payments. Please tomorrow describe how you think it should have played out instead.
March 18th, 2009 at 7:48 am
WAW has nailed it! $173 million in bonus money is Chump Change. It amounts to one tenth of one percent of the bailout money given to AIG. It is a classic diversion run by this ‘historically’ inept administration to cover the fact that yours and my tax money was sent to overseas banks. Say What?!! Out of the starting gate, the Democrat leaders are falling all over themselves to promote even greater big government controls over our economy as they gin up this phoney baloney crisis. Cuomo, Schumer, and Barney ‘Fwank’ can’t wait for a ‘list of names’ and ‘you’d better voluntarily give it back or we’ll place a 100% tax on that bonus.’ Populist grandstanding. They remind me of the locally produced car commercials with salesman screaming to be heard over the cartoon sound effects. And they could not do it without the full faith and support of the mainstream media.
March 18th, 2009 at 8:52 am
Good stuff Mikey. You too, Gearino, but hell you’re a writer, so you’re supposed to be profound.
Mikey, you’re passionate about this subject and quite eloquent too. Hey, I took Tenth Grade Grammar three times in highschool. I know what I’m talkin’ about!
But drop your armour of righteous conservatism for a second. Can you muster any anger whatsoever for our tax dollars (even a measley 173 million) being doled out in bonuses to a management team of what’s essentially an enterprise their collective incompetence drove into bankruptcy?
Your point is well-taken. The weasels in Congress (on both sides of the aisle) are feigning outrage over the AIG bonuses to curry favor with the folks back home. Big surprise.
And you’re correct again, the bonus money is a spit in the ocean compared to the real bucks being moved to banks. But damn Sam, for the life of me, I cant’ find even a hint of disdain in any of your words for the greed, incompetence and avarice of the banks that generated a need for relief funds in the first place - or their bad faith in accepting the money and not utilizing it as intended.
And then you close with an obligatory stab at the mainstream media.
As my Grammar teacher always told me, “John, wake up! You’re drooling on your desk again!”
She did say that - a lot, but that’s not relevant to this conversation.
She said, “John, always present a fair and balanced perspective when you share your written opinion so you’re not percieved as a zealot.”
Turns out yours is but another partisan rant.
March 18th, 2009 at 8:58 am
Okey doke. Well y’all have just a little over an hour before Edward Liddy will, I’m sure, bring all this to light for the American people. Not sure why he’s avoided reporters the last two days… maybe he’ll explain that to the subcommittee too, ha ha ha. On C-SPAN 3, which you can stream at work, if you like, or just catch it online. Looking forward to this.
Just at first blush, though, we can say this: AIG isn’t a bank, it’s an insurance company. Paying out money to companies it has insured (like Lehman Bros., where this all started) is what it does. In the aftermath of the Bush disaster, some of those banks will be overseas.
Anyway, I’m going to wait and see what Liddy has to say for himself.
March 18th, 2009 at 11:54 am
Waiting and Chappy: Because you both posed essentially the same question — What’s wrong with an insurer paying on a claim? — I’ll craft one answer. The problem is that AIG had insured against defaults in the debt securities held by the banks … but those securities haven’t clearly yet gone into default (and may never do so). A New York Times story (republished on CNBC’s Web site), which I’ve linked below, offers a good, plain-English explanation of this.
Furthermore, the federal bailout of AIG was undertaken with the aim of keeping the credit system intact — not making all banks whole. Surely you understand those are two very different things.
The link: http://www.cnbc.com/id/29751535
March 18th, 2009 at 12:34 pm
John, does the N&O know you are writing this type of drivel on the clock?
Sure signs one works for the N&O: 1) Whenever the sins of Democrats are pointed out, always include “both sides of the isle” commentary. 2) Start with a compliment, then follow it up with a sarcastic bitch-slap. 3) Label as “righteous conservative” any viewpoint that points out the fraud of the Democratic agenda, no matter the truth. 4) Lastly (the classic trait), ALWAYS be dismissive and condescending to any opinion that does not glorify the print media.
So get back to work John, the fiddle’s playing, and somebody has to turn out the lights.
March 18th, 2009 at 12:45 pm
John..Thanks for the compliment, I think. I am not a writer but I did sleep at the University of Georgia J School for a year or two. I am sorry John but I DO NOT hold a lot of hatred for the banks and the financial companies being bailed out.
The root of all of this trouble is the fact that they were forced to make loans to people that could not pay. After that imploded the economy, the government starts mortgaging our kids’ and grandkids’ future by throwing good money after bad. BTW…Merrill Lynch (and many others) paid millions of dollars in bonuses, much more than AIG. Is the government going to root out and destroy ALL of these capitalist pigs? It’s all a distraction. Look behind the scenes. I sound like a conspiracy nut I know but it stinks and it really makes me mad.
March 18th, 2009 at 2:17 pm
Hope I don’t regret saying this (watching the sub. meeting on another tab) but it looks like Liddy’s on the up and up. Too bad he didn’t talk to journalists before now… it would have calmed down the angry hornet’s nest of Americans he referred to.
That Rep. from New York is the real hero here though. Mark Somebody? He put it plainly: “Give the money back.”
March 18th, 2009 at 2:21 pm
Ackerman. He’s the most straight-shooting, no-nonsense guy I’ve seen this afternoon.
March 18th, 2009 at 2:54 pm
So here’s what I’m getting: The people who received the retention bonuses — some of whom are offering to give it back — are the people brought in to fix the FP (financial products?) unit. The bad guys — the ones who engaged in risky credit default swaps, and ruined the company that we’re now bailing out — are gone, either having been fired or quit.
So: how do we go get the bad guys? And put ‘em in the same jail as Bernie Madoff?
Because Liddy read some of the death threats the company has received. Who would be so despicable as to write that AIG execs should be strangled with piano wire?
Somebody who’s lost their job, their home and have moved their family into an RV, that’s who.
March 18th, 2009 at 3:16 pm
OK, proud to say the guy I voted for, Brad Miller, just rocked it. Liddy says there are multiple investigations under way — however, he thought the question pertained to current, not former, AIG employees/execs.
March 18th, 2009 at 5:06 pm
One small complaint: What Liddy calls a “retention bonus” — getting a book wound down, closed out, to the company’s satisfaction, then we pay — happens to be almost the exact definition of a performance bonus.
But if Liddy wants to change the syntax so that the media and public are no longer bandying about the term “performance bonus” — OK, I’m fine with that. Let’s move on and find out what went wrong. Besides Lehman Bros. collapsing.
March 19th, 2009 at 8:04 am
Mikey,
We’re all mad (angry - not deranged) over our current, shared predicament. Seems like our politics drive where we direct our anger.
In the Arena,
I beg your pardon, but my WAW drivel is created completely on my own time. Call me a drivel-producer if you must, but a dishonest drivel-producer is going too far. I demand satisfaction. If my posts are drivel, then yours are…poppycock!
And I suppose you could be making a point that’s going way over my head, but I think you may have me confused with another John. Happens all the time. It’s the most popular name in the world you know.
I’m the John who Gearino has a restraining order against.
Talk about over-reacting. He comes home from a weekend trip and finds me asleep in his bedroom. It’s quite impressive. He’s got a fountain in there - it’s a statue of Cupid with water squirtin’ out of his ass - and mirrors on the ceiling. So anyway, Danny-boy gets a load of me and goes ballistic. “Who the hell are you?” “How’ed you get in my house?” “Are those MY pajamas you’re wearing?”
BAM! - instant restraining order.
I’m that John.
March 19th, 2009 at 8:20 am
I’m triscadecaphobic.
Now there’s 14 comments.
March 19th, 2009 at 5:53 pm
I’m um, I uh, well, “out its ass”, Really? I didn’t think we allowed anything like that in Fuquay. I hope you at least walked over to DD and bought him some donughts.
March 20th, 2009 at 7:29 am
Those references are lost on me - I ain’t a proud Triangle resident. And besides, thanks to Gearino’s astute legal representation, I’m no longer allowed within the borders of the Tarheel State.
Relax, In the Arena, I’m relatively harmless. And all-in-all, things coulda been worse. Gearino let me keep the pajamas.