AIG: American International Gangstas

If you have watched TV in the last 6 months, I'm sure you have heard about the debacle going on at AIG. AIG (American International Group) is one of the largest American based insurance companies around. Back in September, when the recession really started hitting home, AIG was one of the first to ask for government bailout funds. Their credit rating was downgraded, and in turn AIG faced a large liquidity crisis because this downgraded rating forced them to put up collateral with their trading counter-parties. So what did the government do? They gave AIG $85 billion fearing that the collapse of this enormous corporation would negatively effect investor confidence and deepen the recession we were entering. The government in turn took an equity stake in AIG, and in reality the U.S. tax-payers became the shareholders...woopdedoo.

In October 2008, AIG received another $37.8 billion in aid money. The company had over $13 billion in losses from January-June 2008, and their stock had dropped from $70 down to a measly $1.25. Then in November, another $40 billion worth of equity was purchased in AIG by the government. Needless to say, this pumping in of cash was just a means of stalling the inevitable. Point of the story is, AIG received over $150 billion in "bailout money", and what are they spending it on you ask? Well it seems the priority for AIG executives is to pay out $165 million in bonuses for themselves. Yes, you heard right, AIG executives will be receiving millions of dollars in bonus.

See, I thought one receives a bonus in turn for doing something good, or performing well over the course of the year. If this was the case, how in God's name are AIG executives deserving of bonuses. It is absolutely enraging to have to hear about this kind of situation. Here we have this corporate giant begging for money in order to run day-to-day operations (or so we thought), and they go off spending our (tax-payer) money in the form of bonuses? Its sickening. And I am glad to see Obama and his administration attempt to block this from happening. I think the New York District Attorneys office, in coordinated efforts with the U.S. Attorney Generals office, should prosecute any of these executives who received the money as well as the genius' behind the whole plan.

We have pumped billions into this company, and it seems that the end is near. AIG continues to post losses, pay off bonuses and high salaries, and then turn around and ask for more. I think we need to let the cycle of free market capitalism take effect, and next time these bastards ask for more money we should give them a bag of coal. I hope some regulation takes effect on this matter, and the people responsible are suitably punished.