AIG Whiz

I’m more then a little bit surprised about all the fuss being made over the bonuses being handed out at AIG. When ever the government hands out bags of cash I expect the biggest criminals to get their taste before making a show out of putting the dough to the use for which it was intended. Come on, let’s be real…the Federal government gave AIG $170,000,000,000 and less then 1% made in to the pockets of various executives. Not bad for government work I’d have to say.

Did you forget all about the very recently passed “omnibus spending bill”? Congress passed a budget of $410,000,000,000 riddle with some 9,000 “earmarks” totaling nearly $8,000,000,000 or almost 2% of the budget. Besides being blatant taxpayer rip-offs to insure the re-election of the pork’s “sponsors” you have to be severely detached from reality to think a few “crumbs” didn’t indirectly find their way in to somebody’s pocket (or campaign fund). Yeah, there was the requisite skirmish about it and then it all faded away. It faded away even faster then all the graft and corruption in the original stimulus bill.

Back when dinosaurs were still roaming the earth (at least as far as 99% of the general population is concerned) in September of 2008, the Federal government passed an $850,000,000,000 stimulus package. Oh, wait, you probably remember it as the $700,000,000,000 stimulus package that didn’t work. That’s because the extra $150,000,000,000 that was tacked on it were (drum roll please) “earmarks”! That’s right, they now refer to it as the $700,000,000,000 stimulus package because over 17 ½ % of the actual bill was once again more pork being spent by members of Congress to help insure their re-election and a few “crumbs” may have found their way in to somebody’s pocket (or campaign fund).

But that’s ancient history. Now the real problem is all those fat cats at AIG sucking off the public teat which is patently unfair since nobody voted for any of them. Unlike most members of Congress I own a calculator. Unlike all of them, I know how to use one. Right now, today, the only period of history that matters, the very people who bonused themselves $158,000,000,000 over the last five months are now hollering like banshees because $165,000,000 isn’t going in to their pocket or doing them any good.

As far as AIG goes, I’m with the rest of you. I don’t like the fact that taxpayer money is going to the very people directly responsible for igniting the Bush Depression. But I have a whole different problem with them. Well, I have another problem with them. Upon further review it seems that AIG actually was following the Bernie Madoff Business Model. Like it or not, it certainly is starting to look like AIG (and probably dozens of other such companies) are pretty much nothing more then very intricate Ponzi schemes.

Know what part of AIG’s business failed the worst? The part that insured mortgages, hedge funds and other financial investments. When things started falling apart and investors started calling in their policies…lo and behold… AIG didn’t have the cash to cover the losses! Essentially they went out, sold insurance, collected premiums, and paid off with the money they collected. Well and good. That’s the way it works in the insurance world. If you know your stuff, those premiums are where you make your money after the expenses. I get that. But I’m pretty sure (at least I hope it’s so) you have to have the assets to cover the losses you’re insuring. Other wise that would be like collecting money from investors and paying out interest based on the money you collect from other investors. Even more irritating to me is the fact without any such regulation anybody (like me) could start their own insurance business.

It’s starting to appear like AIG isn’t just “too big to fail” but apparently they’re too big to prosecute. No wonder a number of the execs that received bonuses are willing to return them or accept less. They may just want to let sleeping dogs lie.