AIG Gets It Wrong Again

What is it with AIG? First it got a whopping $173 billion of American taxpayer money during the Wall Street meltdown last fall. Then it proceeded to spend part of that money on swanky corporate junkets and $35 billion in bonuses for the very executives who had run the company into the ditch.

The public outcry was so great that Congress got into the act and hauled top execs in front of an investigative committee. Eventually, the boys gave back their bonuses and we thought AIG had learned its lesson.

Well, here we go again, folks. If you had a look at today's New York Times, you saw that AIG made the front page of the Business Section and it wasn't a good thing. Seems that AIG insured the US Airways jet that bellyflopped in the Hudson River on January 15th and they are not going to pay up.

Evidently airllne insurance doesn't work like homeowners or automobile insurance, AIG is only required to pay if the crash resulted from the airline's negligence. Since it was a flock of geese and not pilot error that caused the plane to go down, AIG is playing hardball and refusing to honor survivors' claims. To its credit, US Airways has already handed out a $5,000 check to each passenger, though it had no legal obligation to do so.

The cruelty and inhumaneness of this kind of corp-think takes my breath away, but I suppose I should not be surprised. Welcome to the wonderful world of American free market capitalism. They must be going nuts over in the corporate relations department of AIG today. I'm hoping that once again Congress will get involved on behalf of all of us American taxpayer shareholders and force AIG to do the right thing.

Sometimes the spirit of the law is more important than the letter, and this is one of those time. Shame on you, AIG. You got it wrong again.


source: New York Times

Wall Street,Main Street and Populist Rage

People still haven't stopped talking about the hundred and sixty-five million dollars that AIG doled out in bonuses to top execs and who can blame them. Public outrage is growing as the gulf between Wall Street and Main Street deepens. The new buzz word is "populist rage" and that doesn't begin to describe it.

Ever since the bubble burst last year, Americans have been losing their jobs and their homes at a record rate. 37 million people are now on food stamps. 47 million are without adequate health insurance. Last month the nation lost 651,000 jobs. Unemployment is at 8.1% overall and in double digits for blacks and hispanics. Life is not good here on Main Street and it doesn't look like it's going to get better any time soon. But thanks to the bail out, business seems to be booming on Wall Street.

Main Street vs. Wall Street

Those of us who live and work down here on Main Street, got treated to a series of stunning events as fall gave way to winter and winter turned to spring. Most of us watched it unfold on our TV screens. First, the government bailed out the banking system, the automobile companies, Fannie Mae, Freddie Mac. and AIG by keeping the U.S. Treasury printing presses working overtime making dollars--trillions of them. "Too big to fail" became the watchword of the day. Pessimists smelled a giant governmental Ponzi scheme in the making. Optimists hoped for the best. " The recession will be over in a year or two" they said. Nobody mentioned the inflation and currency devaluation that must inevitably follow.

Down here on Main Street, amid the For Sale and Foreclosure signs, we've watched the CEO's of Fannie and Freddie walk away with huge golden parachutes. We've seen Merrill-Lynch's head honcho use government bail out money( i.e. our tax dollars) to hand big bonuses to a few of his pals on the way out the door, and finally we've gasped at the gall of AIG, the company that went belly up insuring the whole mess, as it collected trillions in bail out funds only to turn around and give millions in bye bye bonuses to a few chosen ones. Good luck to Congress and the Obama Administration trying to get those bonuses back. It's not gonna happen.

So, let me see, these guys screwed the American public, got fat comissions and bonuses for doing so all along the line, destroyed public confidence in the financial system and turned the nation into one big hedge fund. Great-- and now they are going to just walk away while the rest of us are left to pick up the pieces.

Populist rage? You betcha