The debacle that is AIG is just stunning in its size and scope. But until today, I don't think I really had a grip on just what AIG was up to or why the government keeps bailing them out with our taxpayer dollars. After all, aren't they just an insurance company? The answer to that is NO. AIG is much, much more, and it's looking like if AIG were allowed to collapse, the rest of the world financial system would get sucked down the black hole with it. A really great article by Joe Nocera in Saturday's New York Times lays out the reasons why that is in infuriating detail. The number of bad decisions made, the sheer delusion under which this company was operating, and the pure, naked, greed that led them to make these bad, delusional decisions are shocking enough to make your head spin. Alan Greenspan is on record as saying he believed that the financial companies could regulate themselves out of a sense of self-preservation - it's now beyond clear that this was not the case, and in the case of AIG, that hubris rather than self-preservation is what allowed them to wind up in hole they're dragging us into. I'm not going to get into specifics, as I'm not an expert on this, and they're all in the article. Please read the article. It's important.
And then ask yourself: If the European banks are as badly tied up in the AIG mess as our own banks are, why isn't the European Union footing some of the $150 billion bailout bill that's going to keep them from going under? (And if any nation in Europe is kicking in for the AIG bailout, please comment below - I'd love to be corrected on this count.)
-EB
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What I find coincidental is that the US Congress is insured by AIG. Do you think there is a conflict of interest going on when they keep pouring money into this company??
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