Elephants & Fleas

What about those bonuses for highly paid AIG employees?

Taxpayers have already put up $173 billion, or more than a thousand times the amount of those bonuses, to fund the government’s AIG “rescue.” This federal takeover, never approved by AIG shareholders, uses the firm as a conduit to bail out other institutions. After months of government stonewalling, on Sunday night AIG officially acknowledged where most of the taxpayer funds have been going.

Since September 16, AIG has sent $120 billion in cash, collateral and other payouts to banks, municipal governments and other derivative counterparties around the world. This includes at least $20 billion to European banks. The list also includes American charity cases like Goldman Sachs, which received at least $13 billion. This comes after months of claims by Goldman that all of its AIG bets were adequately hedged and that it needed no “bailout.” Why take $13 billion then? This needless cover-up is one reason Americans are getting angrier as they wonder if Washington is lying to them about these bailouts.

via The Real AIG Outrage – WSJ.com.

This is another elephant and flea problem – the guy who owns the elephant that’s tearing down our house wants to distract us with a concern about the flea in the neighborhood. Like good magicians, the real villains behind our financial crisis are directing our attention away from their sleight of hand. They’ve even tried to convince us that the problem is due to lack of regulation when, in reality, we’re drowning in regulation. It looks like the looters will live to plunder again while the angry mob lynches those only tangentially involved.

We really do get the government we deserve.


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