AIG secured our (bleak) financial future

December 13, 2009 | By | 2 Replies More

While looking through some older articles, I happened across a November 2005 edition of Natural Science.  An AIG ad decorates the back cover. Note the AIG claim that “You can count on us.”  Also note the claim that “50 million customers know the strength and experience of the AIG companies can help secure your financial future.”  AIG ad - 2005

None of this fluff was technically untrue. It turned out to be true in terrible way that will rob Americans of tax revenue for decades to come.  AIG has helped to secure a bleak financial future for most Americans, while securing a windfall for a well-connected group of elite executives.

But perhaps this tragedy and this should-be-crime needs to be quantified to be appreciated.  The AIG bailout followed AIG’s calculated decisions to gamble in a dangerous way in search of obscene profits, rather than to be content with its honest business of selling insurance.   Then, when the house of cards came crashing down, AIG somehow convinced our lawmakers to divert our precious tax dollars to preserve AIG, which responded by trying to pay out $165 million in bonuses to its employees for a job well done.

How much federal tax money has gone to AIG to date?   The latest count is $30 billion dollars.  To put that in perspective, note that there are approximately 112,000,000 American households.   If each American household were to each bear the same share of this $30B bailout of AIG, they would each pay more than $250.  $250 is considerably more than the price of a Nintendo Wii. Can you imagine the outcry if Congress had approved buying a Wii for every household in America?  What a horrific and irresponsible waste of money that would have been, especially when that money is desperately needed for education, infrastructure and alternative energy, to name only a few things.

AIG is the poster boy of why we cannot have “too big to fail,” yet it is not on President Obama’s agenda to break up the big financial corporations that still sit there like huge ticking time bombs.

It turns out that in the process of “saving” AIG, Treasury Secretary Tim Geithner (then acting as president of the New York Fed) hammered American taxpayers.  If you Google “AIG criminal,” you’ll find almost nothing of note in recent months.   Apparently, intentionally threatening the entire American economy in the pursuit of greed is not a criminal issue. Ruining the national economy is not as serious as stealing bread from a grocery store or smoking a joint.


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Category: Economy

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (2)

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  1. Alison says:

    Kinda makes you nostalgic for Enron, doesn't it?

  2. Erich Vieth says:

    The AIG numbers are a bit hard to determine, based on various accounts, which is amazing given who was on the hook.

    Assuming that the recent NYT article is correct that the number is 180 billion, then the burden per U.S. household was actually more like $1,500.

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