Wednesday, September 24, 2014

Starr vs US regarding AIG

Article in the NYT about the Starr suit against the federal government.

It would truly be wonderful if we saw some evenhanded coverage that showed exactly what the government did and did wrong when it used AIG's value to bail-out much of wall street.  Even if the actions were necessary to preserve the financial system, it doesn't mean that AIG shareholders should have uniquely borne so much of the burden of those actions.

The use of AIG as a conduit to make other parts of the financial system whole was a panicked reaction by the government to the crisis.  Taking the government at face value that there was no malice does not justify the use of government powers to act so inequitably.  Some recompense is appropriate.

The following statement from the NYT article captures what I have been writing for years

The decision to use taxpayer and A.I.G. money to repurchase soured mortgage deals that the company insured for big banks in the form of credit-default swaps amounted to a “backdoor bailout” of Wall Street, the lawsuit says.

No comments: