Why Are You Reading This Junk?

The above video displays U.S. Senator Ron Wyden (D-OR) grilling Treasury Secretary Tim Geithner about how the AIG situation is being handled and why the names of their counter-parties receiving bailout money are not being released to the public. To my understanding, technically several counter-parties are being propped up with the bailout money going to AIG to prevent a Lehman-like shock to the economic system should they go down like dominoes.

Geithner's responses show his grasp of the situation, ability to respond under pressure, and understanding that he has to work within a legal framework and with the set of tools available to him through the government. That last point that I made gives me confidence in Geithner and the Obama administration as a whole. The bubbling populist rage has rightly called for "off with their heads" concerning AIG executives, bankers, etc. I'm glad that my government isn't acting out of vengeance and doing anything reactionary that could further screw things up.

Geithner's introduction to the Treasury may have been marred with tax problems and a dud of a "save the economy plan" speech, but I trusted Obama's judgment then, and so far he hasn't let me down.

Vilifying AIG is a fun past-time, but let's not forget how many other "too big to fail" businesses were involved in Credit Default Swaps and taking unbelievable risks. Their activities were focused on fast money and short-term profit, and what they were doing was legal thanks to deregulation. Who cares about the long-term health of your company when the whole idea is to make big money NOW?

Rewarding failure is another fun thing to talk about, especially with today's CNN article: AIG's insistence on bonuses raises ire in Washington. Here's the quote of the year taken from the article from AIG Chairman and CEO Edward Liddy:

Liddy, however, makes clear in the letter that he took steps to limit his employees' compensation with trepidation. He said the company will have trouble attracting and retaining "the best and the brightest ... if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."

If your ultimate goal is to retain those that you call "the best and the brightest" who helped drive your company into a ditch and onto the receiving line of corporate welfare, then I want to know what you're smoking so that I can get some. The rationale of calling the reasonable action of not giving out huge bonuses when your company is on life support "an arbitrary adjustment by the U.S. Treasury" comes from an awfully deluded mind.

AIG is not alone. There are plenty of others like this in big business. Laws of the land are set to curb the worst traits in human nature, greed in this case. When the laws set during the Great Depression to prevent another one from happening are repealed, what the heck do you expect?

I hope this gets resolved sooner than later, after swallowing many more bitter pills, of course.