18 March 2009

My last word on AIG

I feel sorry for people who work for AIG, not the hedge fund in London, but the real company... they've been left holding the bag of a failed company ruined by gambling gangsters. These guys played a game where they had incentives to gamble someone else's money with the rules being heads I win, tails you lose. I.e., prices up, I get a lot of money, no one loses. Prices down, all hell breaks loose, but I've taken no risk... YOU have as a taxpayer after the government has to step in to prevent global meltdown... and I make a lot of money anyway.

Investment banks used to be partnerships, where if serious risk taking went wrong, the partners had to bear the costs. But since they all went public and the regulatory environment was changed to not only allow but incentivize the most destructive kind of double-dealing and leveraging, there has been total irresponsibility and havoc. Bear Stearns and Lehmann did the same thing, and the real pisser is that people like Phil Gramm deliberately changed the law precisely to make this possible. Heads must roll. Maybe RICO can be used to prosecute some people, as Josh Marshall suggests. And Congress just HAS to change these rules so that this kind of thing never, ever happens again.

No comments:

Post a Comment

Gyromantic Informicon. Comments are not moderated. If you encounter a problem, please go to home page and follow directions to send me an e-mail.