Monday, March 23, 2009
There's a fascinating post on Slate.com from former New York Governor Eliot Spitzer, who gave a stunningly clear explanation of the behind-the-scenes shenanigans of AIG and the bailout billions.
Spitzer points out the original decision to bail out AIG, when their phony derivate investments unraveled, was made by…..are you ready…..Hammerin’ Hank Paulson, who was then the Treasury Secretary; Toxic Timmy Geithner, who has Hammerin’ Hank’s job now, but was then head of the New York fed; Lloyd Blankfein, who was at the time the CEO of Goldman-Sachs; and the ubiquitous Ben Bernanke, head man at the Fed.
So, what’s AIG doing with the latest round of bailout billions, other than paying out obscene bonuses to those who ran a failed trading unit? Why, they’re paying off their trading partners in the derivative scheme….Goldman Sachs, Morgan Stanley, UBS, and a who’s-who of failed “banking” institutions.
In other words, AIG sold these big investment outfits crappy derivatives (“credit default swaps”); when the system unraveled and they all went bust, AIG took the taxpayer bailout money and shipped it directly to their trading partners…so they didn’t lose a CENT on these ludicrous “investments”.
Can you say “inside job”? Spitzer does. And he oughtta know.
While these giant financial institutions are being paid back 100 cents on the dollar for their reckless adventures in fantasy, you and I are being asked to shoulder the burden.
Wealthy politician Jim Sensensbrenner, one of our Wisconsin delegation to Washington, echoes the Republican mantra that the government shouldn’t be in the business of abrogating contracts these financial institutions have with each other, and the bonus contracts they have with their employees.
We, the taxpayers, now OWN what's left of AIG. 80% is "ownership" no matter how you look at it. Since we own it, we can sure as hell re-write contracts or fire anybody we damn please.
All across America, we’re rewriting contracts to share the pain of the meltdown. Labor contracts are being changed, tax rates are changing, and everybody’s being asked to pitch in to help out.
Everybody, as it turns out, except the very institutions that brought us to ruin in the first place.
The more carefully you look into what Washington is doing with the money it borrowed in our name as taxpayers, the more disgusting it gets.
We are really being fleeced.
Posted by Tim Morrissey at 7:07 AM