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If AIG Were Moby Dick, Who Would be Ahab?
The answer, of course, is fallen-from-grace New York Gov. Eliot Spitzer (D).
His pursuit of alleged wrongdoing at AIG was so relentless that some conservative-leaning commentators attempted to pin the company's downfall on Spitzer ... who had his own downfall to deal with by then.
But for no other reason than his insider's knowledge of AIG, it's worth reading Spitzer's take on the troubled company. The ex-governor agrees with Rep. Brad Sherman (D-CA), who told TPMDC yesterday that the brouhaha over bonuses is a "red herring" of sorts that distracts attention from the truth of the AIG bailout: $100 billion of the taxpayers' $170 billion went not to bonuses, but to bailing out AIG's counterparties.
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Josh
Matt
Eric
As has been pointed out elsewhere, ain't it more than a little fishy that the FBI was all over Spitzer's penny ante hooker transactions, but yet Bernie Madoff's billions totally escaped them?
Nothing like a little morality tale to throw the hounds off, eh? As i've said before, watch your back Andrew Cuomo.
March 17, 2009 5:18 PM | Reply | Permalink
You might be right. Or, hubris combined with his general support for illegal activity might have been the issue.
March 17, 2009 10:57 PM | Reply | Permalink
Sorry, but it's much more likely that the long list of shady corporate enemies Spitzer acquired as Attorney General of New York State brought him down. Suggesting that his affection for pro-immigrant policies brought him down seems kind of far-fetched to those of us who actually live in New York.
March 18, 2009 11:47 AM | Reply | Permalink
Of course the talk of retention bonus payouts is a red herring. . .it's just "pitchfork and torches" populist bullshit that will disappear in a week or so even though the fundamental problems remain.
If I worked for this unit of AIG, just did my job as a structurer, analyst, lawyer, etc. and then was asked to stay on through a retention bonus contract to help wind things down, I'd turn to Mr. Cuomo and all the rest of the headline grabbers and say F You.
March 17, 2009 5:20 PM | Reply | Permalink
Sorry, but that's nonsense.
Every one of these people should be thanking God that they're still employed, not whining that they were entitled to bonuses before their company tanked.
If they don't like it, they can go look for work, because in this case, the 'populace' in 'populist bullshit' is supporting these people with our money.
It's sick that the same people who will whine loudest about "welfare queens" and "out-of-control entitlements" see these corporate welfare queens as some-how entitled to remuneration from an insolvent company and a soon-to-be insolvent nation.
March 18, 2009 11:56 AM | Reply | Permalink
If I were a Detroit autoworker who just got dumped on to give back wages to make the Auto Makers deal work, I'd be pretty pissed off at all these macho financial types defending bonuses for employees of a failed business. If we hadn't bailed their asses out, want kind of freakin bonuses would they be getting? The pink slip kind.
March 17, 2009 5:39 PM | Reply | Permalink
As I understand it, by bailing out the counterparties we are avoiding further economic turmoil. In other words, that is what the bailout money is supposed to be used for.
How is the fact that, instead of being used for legitimate bailout purposes, goverment money is lining the pockets of the big swinging dicks at AIG, a "red herring?"
March 17, 2009 6:01 PM | Reply | Permalink
BTW, I agree with every word of Spitzer's piece in Slate. But the retention bonus is $170 million of salt in a $170 billion wound, and there is no reason to say that the AIG traders and executives will not get a dime of the bailout fund paid to them directly. This mentaility of risk-free profiteering is what caused most of these problems anyway.
March 17, 2009 6:07 PM | Reply | Permalink
What people have to realize is that if, God forbid, even more bailing out of big financial companies should become an unpleasant necessity, stuff like these bonuses could make it politically impossible for Congress to go along. It's not just about the amount of money involved.
One may look down one's nose at purely political theatrics if one likes, but they're still important for getting real stuff done.
March 18, 2009 8:40 AM | Reply | Permalink
Eliot Spitzer fell from grace but noone can deny he was crazy good as an AG. Almost scary good.
March 17, 2009 7:30 PM | Reply | Permalink