Why Did AIG's Counterparties Get 100 Percent Repayment?

Reader Comments
Back to blog

When was the last time you saw so many members of Congress so upset over $165 Million in spending? Are these not the same people who a few weeks ago said that the FEW BILLIONS OF DOLLARS of earmark spending in the Omnibus Spending Bill was "an insignificant amount of money?" Indeed, they are! So, I ask again, what's the big deal?
Simple! It's a smoke screen, a diversion and another attempt to shred the Constitution. They want to distract us from the fact that language was placed into the Stimulus Bill at the last minute which required these bonus payments by AIG. They want to distract us from the fact that the Bill was rushed through Congress so fast that none of the members had a chance to read the Bill. And, in their mob action in the House, they voted to violate the Constitution by targeting a specific, limited segment of the population with an additional taxation requirement and invalidate a legally binding contract between an employer and its employees. That's the BIG DEAL!
If they are allowed to get away with this, none of us will be safe from the same types of penalty. Congress will be able to say, "We think you made too much money so your tax rates will be double what everyone else is required to pay." Even your union contract won't be worth the pages it's written on. We better wake up America and let our members of Congress know immediately that we will not stand for this! Let the politicians' heads roll in Washington for what they specifically required AIG to do and leave our Constitution intact.
Larry Brown, Founder
www.RevoltWithYourVote.com

Larry Brown of OK 3:38AM March 20, 2009

Executive bonuses are easy to comprehend, and therefore an easy target for taxpayer rage. Credit default swaps, collateralized debt obligations, counterparties, etc. pose a much more convoluted set of issues and problems, and so until more taxpayers understand these hard to define and harder to comprehend financial products, their anger will go elsewhere.
Sadly, the fact that counterparties are being made whole at 100 cents on the dollar has likely not been understood by the taxpayers outraged by AIG bonuses. I would hope that more and more articles, programs, and media coverage is given to these exotic,and now toxic instruments, so that Congress and the administration is as motivated to correct the excesses in these areas as it now is to try and retrieve bonuses that should never have been allowed.

jbowen of FL 10:51PM March 19, 2009

The CEO of one of the biggest AIG recipients, Goldman Sachs, was somehow in the room when the AIG deal was originally made. Hank Paulson and the others present at that meeting have consistently refused to disclose what was discussed there. This simply forces the affirmative inference that there was undue influence involved. And the people at that meeting, who have kept its details secret.. yes, these are the people who continue to run thebailout.
You would expect as much from Russian oligarchs, but here, in America??

d of CA 7:51PM March 19, 2009

Set the bonuses aside for just one minute... why are Wall St (and even foreign!) financial firms getting billions of taxpayer dollars laundered to them through AIG with absolutely no strings attached? This is a gigantic (and non-transparent) taxpayer giveaway to AIG's counterparties. This giveaway is unethical, dishonest, hugely wasteful and just plain wrong. It needs to be stopped and stopped now.
The beneficiaries of these bailouts are private, for-profit financial companies who bet on AIG insuring their investments. For Chrissakes! They even fought off the regulations that could have potentially saved them! And of anyone, were they not the best equipped, best positioned to assess AIG's financial health? How could it possibly be that we, the taxpayer, who were not able to ovesee, regulate, judge, or benefit from any of these deals, the ones to bear all of the downside risks? Moral hazard? This is moral hazard on steroids. The recipients of this money have billions (with a 'B'!) in the bank, and we are just giving them our money?
This is crazy!

d of CA 7:37PM March 19, 2009