Too Big to Wail

Corporate Arrogance

AIG sues government over bailout

I keep telling myself that there’s nothing left that Wall Street can do to surprise me. I know there are good guys inside the system (full disclosure: I am a Marketing Manager by day at one of the largest insurance brokerages in the world), and so my contempt is for the financial groupthink that drove the nation’s economy into a ditch in recent years, the disengaged fiscal roulette in which these corporations engaged, as if there were no real lives, homes and jobs at stake. Then of course, it continues to grate that when the misbehavior of some of our largest financial institutions brought their solvency to the brink, help in the form of taxpayer bailouts was the ready solution. While we collectively and resignedly understood that to do otherwise would mean a decisive and profound trickle down that would bring citizens and residents to the fetal position (when we were already on our knees), that really didn’t make the necessity feel any better.
In the years that followed the late 2008 housing bubble burst and stock market crash, the situation has only marginally improved for American families. While the Bureau of Labor Statistics would have us believe that the unemployment rate stands at just below eight percent, a figure lower than the summer following repugican patron saint Ronald Reagan’s inauguration, anecdotal evidence all around us disproves the numbers. Don Diamond, a contributor at Forbes, puts the real unemployed/underemployed figure at 14.3 percent. He writes, “But the ‘official’ unemployment rate doesn’t count men and women like G. — discouraged workers who have settled for part-time jobs or have given up looking altogether. Tracking those individuals, under what’s called the ‘U-6′ rate, gives a very different measure of the nation’s unemployment rate.”
Jobs have disappeared, millions of homes have been lost while those who managed to stay in them saw equity drop or abscond altogether, once-healthy 401ks bled money and newly minted college graduates discovered no place for them outside their parents’ spare bedrooms. While many of us on the left and in the center wonder why the Federal government failed to prioritize a bailout for the American people, we have soldiered on with far less complaining than we might have.
This resilience of the spirit is appallingly lacking in some of the corporate entities that, once broken, are now doing fine, thank you very much – courtesy of taxpayer generosity. I thought I’d mistakenly stumbled across The Onion’s website by accident this week when I encountered the following headline: Judge OK’s questioning Bernanke in suit over AIG bailout. From the Boston Globe, via the Associated Press, the first question this story brought to mind was: “Why on Earth would AIG be suing the government? We saved their asses!”
But it appears the company does in fact have the unmitigated gall to whine about the very loose strings that came attached to the money. Marcy Gordon reports, “Hank Greenberg, the former AIG chief executive, has sued the government over the $182 billion bailout, which AIG has since repaid. Greenberg claims the terms of the bailout were too onerous and is seeking at least $25 billion… [the suit] accuses the government of taking valuable assets from AIG’s shareholders without their consent or fair compensation, in exchange for the government’s 80 percent stake in the company. The government’s actions violated parts of the Fifth Amendment, the lawsuit contends.”
Yeah. Really. As if to belabor the irony, Gordon characterizes the government’s response as follows: “the allegations are groundless. AIG’s only alternative to not receiving federal aid was bankruptcy, which would have left shareholders with worthless stock, the New York Fed has said.”
It must be mentioned that this meritless lawsuit will waste the valuable time of Fed Chairman Ben Bernanke, who will be deposed in service of this sideshow. Also, if I stop and think about the additional wasted resources attached to this complaint – court costs, legal fees, intern salaries, etc. – I succumb to unqualified rage.
Where do these people get off? The modern repugican cabal loves to talk about the 47 percent and it’s fondness for the “nanny state,” the food stamps, Medicaid and other social safety mechanisms that barely keep families afloat as they try to struggle back to personal solvency. But what is this brazen biting of the hand from AIG if not the entitled display of the unforgivably coddled? The logic, like that of a spoiled trust fund baby goes like this: I was profligate and you saved me. Thanks but, I didn’t ask you to and even though I gratefully accepted the help, I think I should get a rebate on the toxic assets you took and converted into viable capital. So would you be a dove?
I am not a corporate attorney or financial expert, but I can’t fathom how this suit was even granted a judge’s hearing, let alone allowed to disrupt the day to day business of the Fed Chair who – apparently it must be said – is still looking for monetary solutions that will get the American people back to work.
Newsflash for AIG: when you loan money, you pay it back with interest. I am surprised I have to say this to an organization that you know, specializes in money management and insurance. You signed on the dotted line five years ago to save your shareholders the shame and expense of bankruptcy. It worked out well for them and you. How dare you ask for anything more?