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Thread: The federal government gets sued for saving AIG

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    The federal government gets sued for saving AIG

    FORMER FEDERAL Reserve Board chairman Ben S. Bernanke found himself facing tough questioning in a federal courtroom last week, and he seemed “none too pleased about it,” as the Wall Street Journal put it. Mr. Bernanke’s interrogator was a lawyer for Maurice R. “Hank” Greenberg, the former chief executive (and a major shareholder) of insurance giant AIG, who is suing the U.S. government on the grounds that its 2008 bailout of the firm violated his constitutional rights. Mr. Bernanke has said that the rescue of AIG, which ultimately involved $182 billion in government commitments, was a necessary evil that he and the Bush administration undertook only because AIG’s collapse would have imperiled the world economy. By his apparent demeanor in the courtroom, Mr. Bernanke communicated annoyance at Mr. Greenberg’s attempt to punish this good deed — and we don’t blame him.

    The AIG bailout was not only especially onerous for the government — and U.S. taxpayers — but also especially galling. AIG got into trouble by recklessly extending its guarantee to securities backed by sketchy subprime mortgages. Amid the panic of September 2008, it appeared headed for a bankruptcy that might be even more epic than the collapse of Lehman Brothers. Unwilling to risk that, Mr. Bernanke, then-Treasury Secretary Henry M. Paulson and New York Federal Reserve president Timothy F. Geithner crafted a financial lifeline for the company, swallowing their contempt for its irresponsibility. In the process, AIG’s creditors also got bailed out, including many European banks whose approach to risk wasn’t much more admirable than AIG’s.
    The federal government gets sued for saving AIG - The Washington Post
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    Re: The federal government gets sued for saving AIG

    The AIG bailout was onerous for taxpayers and the government? The government ended up taking control of 92 percent of the shares of AIG and made 14% interest on every dime loaned, all of which was paid back at a time when interest bearing investments were lucky to get 3.5% interest.

    AIG isn't suing the government for bailing them out. It's suing because they feel the terms were unfair. I'm not sympathetic to AIG over that, by the way. I'm just dealing with some of the dishonest hyperbole over this lawsuit like "government gets sued for saving AIG" or "The AIG bailout was especially onerous for the government and taxpayers". Neither statement is true.
    You can't reason anyone out of a position they didn't reason themselves into in the first place.

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    Re: The federal government gets sued for saving AIG

    There is no question that AIG got the pricing on insurance for ABS rather wrong. That was the responsibility of management and shareholders. But it would have been mad to let that company go belly up.

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    Re: The federal government gets sued for saving AIG

    here, watch this, where Jon Stewart more than competently explains the case
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    Re: The federal government gets sued for saving AIG

    Jon Stewart is very funny but it is a fool who confuses Jon Stewart's comedy skits with fact based reporting. I am not a fan of the bailouts but AIG may win this suit.
    You can't reason anyone out of a position they didn't reason themselves into in the first place.

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    Re: The federal government gets sued for saving AIG

    Quote Originally Posted by Papa bull View Post
    Jon Stewart is very funny but it is a fool who confuses Jon Stewart's comedy skits with fact based reporting. I am not a fan of the bailouts but AIG may win this suit.
    on what basis do you believe hank goldberg may prevail in court?
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    Re: The federal government gets sued for saving AIG

    Quote Originally Posted by justabubba View Post
    on what basis do you believe hank goldberg may prevail in court?
    Here are 5 reasons explained in some depth. 5 Reasons the Gov't Might Lose the AIG Lawsuit | National Review Online

    It's not a frivolous lawsuit even though it's one that makes AIG look like they have a ridiculous amount of audacity. We'll see how it works out for them. The interesting thing to me is that it would probably be a very good thing if AIG actually DID win this lawsuit because that would likely end the "too big to fail" meme in government once and for all. It could make any thought of bailouts in the future a political poison pill and that would be a very good outcome, indeed. As it stands, I think our politicians would make the same mistakes again if given the chance tomorrow.
    You can't reason anyone out of a position they didn't reason themselves into in the first place.

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    Re: The federal government gets sued for saving AIG

    Quote Originally Posted by Papa bull View Post
    Here are 5 reasons explained in some depth. 5 Reasons the Gov't Might Lose the AIG Lawsuit | National Review Online

    It's not a frivolous lawsuit even though it's one that makes AIG look like they have a ridiculous amount of audacity. We'll see how it works out for them. The interesting thing to me is that it would probably be a very good thing if AIG actually DID win this lawsuit because that would likely end the "too big to fail" meme in government once and for all. It could make any thought of bailouts in the future a political poison pill and that would be a very good outcome, indeed. As it stands, I think our politicians would make the same mistakes again if given the chance tomorrow.
    You literally just whined about Jon Stewart being not a good source of facts and then post National Review Online.
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    Re: The federal government gets sued for saving AIG

    Quote Originally Posted by Deuce View Post
    You literally just whined about Jon Stewart being not a good source of facts and then post National Review Online.
    My statement was that it is foolish to get your facts from comedy skits. And that's because it is. I am not arguing that whatever Jon Stewart says is wrong because he's a comedian. I'm saying that if you don't check the facts, you'll end up red faced a lot because comedians focus on funny, not facts.

    AIG didn't actually borrow 182 billion. What they actually borrowed was less than half that. And what they borrowed was paid back in 4 years at 14% interest, so complaints about how the taxpayer got screwed don't line up with the real facts.

    At any rate, this isn't a license for your logical fallacy ad hominem. If you want to argue content, argue content. If you want to argue logical fallacy ad hominem.... well, just don't bother. That's not debate.
    You can't reason anyone out of a position they didn't reason themselves into in the first place.

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