Why the AIG Contracts were Okay

Discalimer: This is based on stuff I know and not facts.

AIG is/was? the world's largest insurance company. Insurance companies sell insurance policies for all kinds of things but one thing is critical they have to take the premiums in and invest the money so that they will have enough to pay all the claims as well as pay all their costs (including employee salaries) and make money for their shareholders.

AIG like a lot of people invested in these so called subprime mortgage securities and when the market melted down (caused IMHO by $4/gas but that is another subject) they found themselves in a heap of trouble.

The government (which at the time happened to be the Bush Administration) decided that allowing AIG to fail was a bad idea. You can argue with that decision but it is a fact that they did.

Now here's the thing. If it becomes known that an organization is either going to disappear for sure or maybe disappear or maybe just become a lousy place to be, the best and brightest people leave. Sometimes the people on top who want the place to run at some level of performance for some amount of time will say to these people. Look, we know you want to look out for yourself and get out but we are asking you to stay. Stay, do your job and help us keep the place running. If you do, we will give you some money for your trouble. Contracts are drawn up, hands are shaken and life goes on.

So, I think that is precisely what happened. If you stay for a long as the contract stipulates you get the money. You can quit one day after the contract period and that is really fine. If they wanted you longer they would have given you more money and a longer contract.

The people who inherited this debacle (the Obama administration) were probably not really in a position to say: Oh, the Bush people were just kidding when they gave you all this money and told you to operate the company. Let 'er fail!

So they wrote the law and allowed these contracts to take place because it was the right thing to do. I'm not saying keeping AIG afloat was right. I am saying that once you make the decision to do so those contracts make all the sense in the world.

Now apparently if you go against public opinion, in the heat of the moment the government can just come in and take stuff from people who signed contracts and did the work!

And I swear this has spun so far out of control that a reporter almost said: We want to know what the president knew and when he knew it.

When a decision that was probably correct (despite the current blast of public opinion against it) starts sounding like a conspiracy to hide a felony something is out of whack.

Isn't there anyone who can stand up and explain why screwing these people is going to create a simply horrible mess and set a terrible precedent? (Yes, even more of a mess than we have now.)

What's more if the government takes 90% of 163 million dollars that means that there will be lots of lawyers that will want to fight to get it back cause they would stand to make like $40 million bucks. And if they do we, the taxpayers, will spend a pile of dough fighting it.

I've never seen or been in a lynch mob but I feel at this moment like congress is the next closest thing.

"You've done enough. Have you no sense of decency, sir, at long last? Have you left no sense of decency?"