Yet neither he nor Treasury Secretary Tim Geitner nor President Obama have demanded nor required the dismissal of the leadership of this corporation that is likely to be the key to the financial meltdown. Instead it appears that the fear of dismissing these incompetent administrators would make public the depth and breath of the Ponzi scheme they constructed and by so doing would produce a wave of Bank runs around the world of epic proportion. The Economic Crisis and how history is likely to look back on this time is the wager our new President and his administration have made that with enough time they will be able to reduce the results of the eventual unpreventable collapse of AIG. Time that they currently appear to need to calculate and exit strategy. Currently we are pouring Billions of Tax Dollars increasing the National Debt to new heights into a Private Company with little hope of ever recovering 50% of our investment and thus saddling you and I with a bill that we will have to pass on to our children and grand children.
This is a direct result of the now failed Republican policies that were fixated on free hand unregulated market capitalism initiated under the party hereon President Ronald Reagan. Maybe history will point to this fact as a lynch pin to this collapse thus letting AIG slide from view once again, while we look at the cause and effect to figure out how to once again prevent the impossible from happening. Certainly we thought we had the risk of Depression licked when we created FDIC and Social Security in the 1930’s as the response to the last Great Depression. It seems ironic that we have failed to learn from history the lessons history tries to teach us that nothing is impossible. I am sure many of you will not remember how WWI was first placed into the history books it was called “the war to end all Wars” unfortunately lass then a generation later we had to call upon the greatest generation to make the ultimate sacrifice once again. History if it teaches us anything it is to always remember that to suggest it can never happen again is to have it happen again. How many have read a “night to remember”? The great unsinkable creation of man, Titanic, certainly demonstrates another lesson to us all that nothing we create can withstand every challenge life has to offer.
Which is why regulations even though they are restrictive and confining do so to remind us of the dangers that lurk when we try to convince our selves and others that the worst can never happen and certainly not again.
Well now that we see AIG for the Titanic that it is to our generation what can we do, I firmly believe it should be allowed to fail and soon so we have the capitol to support those that will be most affected by the resulting tidal wave of loss that looms over us today. Look at what South America is doing as an example of looking out for those who have already lost in this economic collapse.
Yet the Political will to roll the dice and Allow AIG to collapse under it’s self inflicted wounds just does not exist yet. I am more convinced this is a result of the inability of our Government and the politically elected officials to fully understand the full extent of the events that could unfold and the unwillingness to take the political risk of being able to put the system back together again after. This uncertainly has paralyzed our response.
Yet I would like to suggest an alternative choice may exist. I am not certain that it is any more likely to change the final outcome but it may allow many of us to sleep better knowing we control our own destiny. This came up over coffee this morning, why not put AIG under the care and management of FDIC. Let FDIC completely control all day-to-day operations and decisions on the corporate future and future policies of the entity formally known as AIG. FDIC may decide to carve it up into separate corporations if necessary. It may decide to create a resolute trust, which was so successful in the 1980’s, and dispose of the assets and create value and a return on taxpayer investments this would also provide some income to help FDIC deal with potential runs on local and regional banks. More importantly it would represent a greater taxpayer control over the liabilities and assets of this American Giant Corporate entity we have been forced to bail out. I would also suggest to the Presidents Management team to think out of the box one idea maybe to look at FEMA and the job they do in natural disasters and the roll private insurance plays or fails to play in rebuilding and financing recovery efforts Parts of AIG could remain to bolster government control of a comprehensive catastrophic policy response and restoration finical system. Using AIG’s insurance vehicles to take control of national disaster insurance paired with national flood insurance may reduce time and cost to the average home owner and local business entity struggling after a loss, this may save both our economy and potentially save taxpayers billions dollars government aid dollars spent on initial response and monetary grants and loans current part of the FEMA budget and role. It may also reduce local and state burdens resulting from the long wait and many time court caseload dealing with disputed claims by private insurers. The possibilities are endless but most of all it will be a system of paying back the taxpayer for taking on the bailout, consider it restitution.
When we look at AIG it is clear from their history
That their assent to a “to big to fail corporation” has been recent as little as 13 years basically where the DOW value has currently fallen back to, and likely to be where AIG should be forced to return to in a reduced size and scope if it can be saved at all. This level would certainly return it to a point in time before it placed it’s moral character on a shelf for the sake of profits at any cost. Thinking out of the box may be a way to salvage some of the burden we have been saddled with.
Still there is a step that has been little discussed and way over looked For far tomany of us who have already paid the high price of losed incomes as well as lost value of our homes, cars, retirements, even our future and the fate of our children and grandchildrens future. This is the fate of the management team that has run this Corporation onto the shoals and has thus far by their remaining on board demonstrated a smug indignation believing they should be allowed to continue in the role of administers of this swooning giant. This I believe is the greatest crime and cost to the hard working taxpayers thus far and I would suggest those same taxpayers would not receive the same consideration from their employers for such a result in job performance. No they are far more likely to have seen a pink slip in their middle class pay envelope. In earlier days such unethical behavior executive’s would have resigned in disgrace yet not this group. My hope is that if they do not tender their collective resignations before the 15th of March that the Obama Administration would demand it. If President Obama hopes to continue to rebuild and even maintain the faith and support of our country this step should be a given. If he is going to rebuild the confidence of investors that punitive steps have been taken as a first step in the rebuilding process he must demand this, and if he is going to continue to ask us to shoulder the burden of this Private corporation once again he must follow through with the assurance that there is no reward for such behavior. Those at the helm deserve the fate of their actions the result of the disaster has endangered all of our futures and certainly damaged many that will never recover from it. Asking Main Streets hard working tax payers to shoulder the burden alone and with out more assurance of resti
tution is certainly a waterloo policy. Failing this test suggests that a policy of a double standard continues to exist. I would hope that we each take a moment and contact our Congressman and our Senators and give them a list of those who deserve pink slips at AIG, we now own 80% of the corporation and deserve the right to express our opinion of how this corporation should act as we move forward in the economic crisis.
Link to AIG corporate Executives:
Add to this list the current board of Directors
This also should be the opportunity to enact legislation that renews and extends the rules and rights of individuals under the Sherman Anti Trust Act and Clayton Act and to allow taxpayers a means of redress in cases of Mergers and Market dominance as well as a means of recovery by individual loses suffered as a result of monopolistic tactics that place taxpayer resources at risk. Now I am not suggesting any legal insight into this set of circumstances but merely suggest that an expansion of the individuals rights against such concentration of market control and by the nature of the ability to have redress in the control and creation of such “to big to fail” corporations. This ability for taxpayers to have a voice and possibly a check and balance on corporations from building obligations beyond their control and potentially threatening to require government bailouts in the future as a result of shear size would be mitigated and give us all a seat at the tale as our economy rebuilds. Never again should we be held responsible for the irresponsible behavior of a Free Market Corporation its debt or obligations, with out the ability to publicly challenge the obligation being forced upon us. This will merely be another check and balance to the system and reduce the likelihood of history repeating itself.
As Usual just my Opinion
“too big to fail” is no more than a blackmailer’s mantra in my eyes.
If we learn noting else… I think we need to develop regulations/laws for businesses which are “too big to fail” from becoming “too big to fail”.
If it doesn’t happen JohnD we are doomed to repeat history!
p>as Usual just my Opinion
That’s one of the things that is made much much easier with nationalization. “…taxpayers are merely subsidizing a wealthy powerful industry without forcing necessary systemic changes.” Breaking up entities that are too big is one of the ‘necessary systemic changes’ that are needed… the additional regs required to make sure new entities don’t just get too big in their place is another. If you get the time, you should really look at these videos I posted earlier (if you haven’t already: