AIG: Looking at the Big Picture
By Pat Richards
Posted March 19, 2009

Since "we the people" now own AIG, we should do the right thing -- don't give it another dime, declare our company bankrupt, and let the bankruptcy court deal with the mess.

The pundits, experts and reporters are now telling us we should not be so concerned about how AIG has spent what was only a bit less than 1% percent of the $170 billion we gave the company. Never mind that this money was given out after the fact to the very same executives who were most directly responsible for destroying our financial system... it was only a measly $450 million bucks. We shouldn't get so worked up over chump change. We should look at the big picture. They completely miss the point: If congress and our government officials can't even control how the company we own squanders a measly 1% in such an obvious and egregious way, what does that say about what has been or will be done with the *other* 99% of our $170 billion taxpayer dollars?

Anyone who understands what really happened to AIG last year knows that "congress didn't make this mess" -- it was Henry Paulson, George W. Bush's Treasury Secretary, who on September 16, 2008, committed us taxpayers to buying AIG without first asking congress or anyone else for authorization. The AIG buyout was a done deal *before* Paulson came to congress a week later on September 21, 2008 and blackmailed them to authorize $700 billion to cover commitments he had already made by threatening immediate global economic collapse if they didn't sign off on his "no strings attached" deals (as if the economic collapse wasn't going to happen anyway). Good ol' boy Henry should be in jail right next to Bernie Madoff, but that's another discussion.

Congress was dragged into this against its will, kicking and screaming, to make good on Paulson's private back room bailout deals. And once that was done, the Bush Administration smiled, bowed out and left it to Obama and the new congress to try to clean it up the mess.

Those are the historic facts. But it is just as obvious at this point that congress is incapable of cleaning it up and has in fact only made things worse. As owners of AIG we need to do what the original owners didn't have the guts to do -- place the company in bankruptcy court, sell off any assets which are worth anything and let the rest of AIG's rotten contracts and obligations fall where they may. Which is what would have happened if congress had not been blackmailed by Paulson to try to "rescue" AIG in the first place.

No more "rescues" of private companies, no matter how big they are. Let 'em sell what assets they have left and go into bankruptcy (which will certainly take care of any pending bonus 'contracts' or any other obligations the company might have stupidly committed itself to). Yes, that will hurt everyone badly, but not as much as this on-going fiasco is hurting everyone.

As for the measly 1% of bonus payments, send the FBI to take it back -- those so-called bonuses are money embezzled from a company owned by the U.S. taxpayers and should not be treated any differently from money stolen in a bank robbery at gunpoint.

Copyright 2009 Pat Richards, All Rights Reserved
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