I have heard for several days that people are pissed with AIG. If you have been avoiding the radio, late night television, political blogs or the newspaper, you may want to check out my last blog entry. This blog entry will be political – yuck.
The government gave AIG a bunch of money. I am sure there is a whole section of AIG that is in charge of collecting this money. I have heard that they received a bunch of billions of dollars that they could do whatever with. And then more money that Congress gave them that was for such-and-such, with no strings attached. And then there was more money that they were given to AIG for "other stuff" that may have some strings attached to it. I think that they can't buy nuclear weapons or teach abstinence to high school students. There are probably other strings attached, but I have not really been paying too much attention.
AIG is not a bank – more of an insurance company. And AIG got into trouble when their judgment on assessing risk was impaired. So the government is giving a company with questionable judgment a lot of money. Oh, and the government and the press has basically said, "We can't let AIG fail." (Even yesterday, President Obama said: "One is to withhold money from AIG that could potentially lead them into a spiral that could affect the entire financial system.")
If I had questionable fiscal judgment and everyone said "you cannot fail", and thus bailed me out several times, why would I change my actions. They seem to be working for me. I mean, I am getting all sorts of money, and I need to pay my executives, the same ones with questionable judgment, money to stay because they are so important to overall operations. I don't see what the big deal is.
I heard Obama speak about this on the radio Wednesday, and I was floored. President Obama said, "Well, look, rather than going sort of the details of finding it out, ultimately, I'm responsible. I'm the president of the United States. We've got a big mess that we're having to clean up. Nobody here drafted those contracts. Nobody here was responsible for supervising AIG and allowing themselves to put the economy at risk by some of the outrageous behavior that they were engaged in."
So he said, ultimately he is responsible, but qualified it with "nobody here was responsible for supervising" AIG.
We can blame AIG and get mad at them, but they are just reacting rationally to the situation. They are doing what is in their best interest. Perhaps the next multi-billion-dollar payment will have more strings attached. Of course, we won't change our voting habits (it is always the "other guy's" senator or representative that is the problem), so maybe the strings won't be their either. I guess one investment AIG made in 2008 paid off, their lobbying efforts.
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