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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Tuesday, January 08, 2013

Chutzpah

Let me get this straight: Taxpayers who bailed out a moribund AIG cheated the shareholders who ran the company into the ground?

That is the essence of pending legal action that would enrich attorneys -- not to mention an irresponsible CEO who led the company until he was forced out in 2005 amid a fraud probe by then-New York Attorney General Eliot Spitzer.

Maurice "Hank" Greenberg's successor Martin Sullivan then ran the company -- and the world economy -- into the ground in the sub-prime mortgage debacle, necessitating a $182 billion taxpayer bailout to prevent the world economy from crumbling.

Greenberg says the deal "cheated" shareholders --because the 92 percent taxpayer stake in the company deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”

He is trying to convince current corporate honchos to sign onto a $25 billion shareholder lawsuit against the federal government.

In a gift of understatement, the New York Times notes:
... such a move would almost certainly be widely seen as an audacious display of ingratitude. The action would also threaten to inflame tensions in Washington, where the company has become a byword for excessive risk-taking on Wall Street.
Ya think?

Five decades ago, John F. Kennedy faced off against the steel industry, which jacked up prices in unison. The president famously declared:
"My father always told me that all businessmen were sons of bitches, but I never believed it until now."
The Greenberg lawsuit, particularly if it is joined by the company, offers gold-plated confirmation of the observation -- and why Americans are still upset that no one on Wall Street has been made to pay for the outrageous irresponsibility that fattened bankers' wallets  before wrecking the worldwide economy.

A suggestion to the AIG board: for the good of the millions of Americans who ponied up as 92 percent of the company, just say no. If not for us, Greenberg and your current shareholders would be holding worthless paper.

Oh, and it would be a good idea to pull your TV spots thanking America. On behalf of my fellow citizens, allow me to say "you're not welcome."

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1 Comments:

Anonymous Anonymous said...

But they paid us back with interest, right? So isn't this just like the govt investing in GM government motors. And like investing in Solydra, oh wait we never got our money back on that one.

January 08, 2013 12:46 PM  

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