Rachel Maddow made in an interview with David Letterman made an an interesting point about AIG. Basically, she said that if they are so giant and important that we can’t afford to let them go under and we as tax payers have to support their company, then they should be socialized. Meaning they should be owned by the tax payers.
In essence they were a huge part of the enormous Wall Street scheme that brought down the economy. Once regulations were removed (or as I like to call them laws, or more aptly, legal boundaries meant to protect people from crooks, liars, thieves and murderers) bankers and Wall Street went crazy insuring bad loans, knowing damn well theses were crap loans, but not caring because they were selling these crap loans off to people who trusted their company and their company ratings.
Oh, yeah, and part of the math problem that ruined the world was that this formula (mentioned in the previous post) was applied in a way that made it look as if there was no risk to these insanely risky, often fudged (for the purpose of getting them through) loans. So in essence AIG did not directly have to take the risk, they covered the butts of the companies who were going nuts with the new scam of giving home loans to people who couldn’t afford them. The bankers, brokers and insurance companies knew full well it was going to implode, but they were betting on the other guy taking the hit while they pocketed the money.
This is some seriously disturbed behavior and just proves the stupidity of supposedly naive people like (and literally) Alan Greenspan who believe somehow business people are morally superior to the rest of humanity and thus don’t need things like laws (i.e. regulations) to keep their fingers out of other people’s cookie jars.
I will announce the winners of the competition later tonight.
Best to all,