A.I.G.

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Remembering a time when life wasn’t all that good for me, and I found myself staring into the mirror, and the guy on the other side said to me, “Baby, you aint much, but you are all I got.”

Kind of stayed with me a long time, that thought or that moment.  If all of this comes crashing down on America, all we are going to have left is each other, that is a sobering thought.

Where are we going to meet, what is going to happen to the majority of folks left over in the ruble of what was once a mighty industrial power?

Where do we meet to discuss things, all of the Starbucks and the local coffee shops, donut shops, all of them are struggling to keep the doors open, what happens when they like the rest of it, fail?  We need some place, those of us in the larger community of citizens with who we actually do share a common fate to meet and discuss issues.

I always believed that Federal Intervention in the marketplace should be essential, that there should be a series of checks and balances in place, to make it all flow, to allow it to work.  The first priorities of any intervention should be to preserve jobs and protect American taxpayers.  That is how, I believed it should work.  But it didn’t, not this time.

Under the deal that government gave A.I.G. which was buckling under by demands for cash from its trading partners, A.I.G was supposed to fare well.  It didn’t.  The government gave them $85 billion dollars on a line of credit.  Which at that time, I thought was a staggering amount of money, but it turns out, this was just pocket change.

So we “bailed out A.I.G.” which was supposed to work.

At the same time however, the government also saddled this outfit with a high excessive interest rate of more than 14%.  Now I know, a lot of you are smiling right now and saying to yourself, “Aw, that aint nothing, you ought to see what I have to pay MasterCard.”  But 14% for a business, is high, it is not astronomical in number, but yet, it is still high.

This is where the government, our government, blew it.

The high rate the government said “was to insure that A.I.G. would pay back the loan quickly” by selling off some business units.  But all it really did was protect A.I.G.’s business and/or trading partners.  It did this at the expense of A.I.G. employee’s and at the expense of taxpayers.

Now A.I.G. so burdened by interest payments will more than likely have to liquidate itself making jobs impossible to keep and decreasing any real likelihood that tax payers will ever be repaid this enormous sum of money owed them.

The insurance giant now in Federal receivership, this week sold A.I.G. Private Bank, which caters to wealthy individuals around the world.  Dubai-based Aabar Investments paid $254 million for the bank.  Investors were not impressed, with A.I.G. shares falling some 7.5% to just $1.86 a share.

A.I.G. has kept taxpayers and shareholders “largely in the dark” since receiving a $152 billion federal lifeline, and its promise to repay the government seems to be losing credibility.”

The company itself was more useful as an employer and a tax payer than it is as a failed business venture.  Its attempted rescue, this hastily thrown together bad deal should have reflected this truth.  Looks like we got the short-end of the stick again.

So it appears the party is over, and it is time to pay for the band.  Bailout recipients are not new to this idea or practice; they do it all of the time.  Struggling companies that have sought bailout money from the federal government this fall were among some of the biggest sponsors of the Democratic and Republican political conventions held in late August and early September.

Politics as usual, when companies such as A.I.G. and CitiGroup helped underwrite the conventions.  In total, private interests donated $118 million for the conventions, more than three times the amount that was used in public money (some $16 million) that was received.

These are the same wonderful people who are now calling for the dismantling of the UAW and demanding the head of the union’s president.  Republicans.  Who have a tried and proven track record of business practice in place for all of America.  Slave wages, total domination of your day to day life and their hand in your pocket each and every time you look the other way.  The band played, the crowd locked arms and swayed, all the time chanting USA! USA! USA! …

Conventions are events where people of the same interests or from the same corporation or political party, get together to exchange pertinent information.  Discuss past activities, evaluate performances, formulate new and improved policies, set short and long range goals, meet important people, and appoint committee members who will be effective in carrying out directives.

That is why they all bring their golf clubs, why they always have plenty of pencils and paper, but are constantly out of swizzle sticks.  But all good things eventually have to wind down and it comes time to settle up.  You can bet your last dollar it won’t be coming out of their pocket.  I mean hell … Someone has to pay for it all … Why not you?

For the better part of the year, this year, I have had very little money in my pocket.  Next year isn’t really looking all that good either, about the only good thing I can find in all of this, is I have the wallet paid for.

See you at the Do-nut shop, providing they can find a way to come out the other side and walk out into the sunshine of what some are referring to as Mr. Obama’s New Deal.

But … Before you decide to leave the house to head out on this new journey in January … I would grab a light jacket just in case.

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4 thoughts on “A.I.G.

  1. The $85 billion bailout of AIG was just the first payment. Later, they said then needed an additional $75 billion, and promptly received it. No Republican senators in Congress rose to demand that employees of AIG make concessions to keep the company afloat. While there is some weak language barring bonuses to management while the loans remain unpaid, but no Republican senators have risen to demand that the “retention fees” being paid to the same managers who broke the company be stopped.

    These “retention fees” range up to one million dollars each. The reason given for these payments is to retain the management of the company. These are the same guys who brought the company to financial ruin to begin with. You would think that the $400,000 parties AIG throws for its management all around the country would be an incentive to stay on the job, but I guess it is not enough.

    Where is the outrage from the Republican senators about this? We throw $150 billion dollars to a company simply because they ask and watch as they throw parties and millions in retention fees to management, but nothing is said. However, when three auto makers request a loan totalling $14 billion, the senators from Tennessee and Alabama block passage of the bill unless workers make huge concessions.

    The UAW has been making concessions for 20 years to these companies, while their management has wallowed in multi-million dollar bonuses. More concessions are already negotiated to take effect in 2010. The senators from these two states have several foreign companies making cars in their states without union labor. Taxpayers in those states paid about $180,000 PER J0B in incentives to those foreign manufacturers. The states also agreed to buy a certain number of the cars made there.

    It is obvious that these two Republican senators were doing nothing but trying to break the union. To take away the strength of workers who united in a common cause. For those who own manufacturing companies, I’m sure the southern senators are heroes. To those of us who work for a living they should be seen as what they are–anti-labor, pro business shills for foreign corporations.
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    It is curious that the bankers got what they wanted, right up front, with very little in the way of strings attached, but the same rule doesn’t apply with the automakers. Kind of like one giant soap opera, you never know who is sleeping with who, until the writers go on strike.

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  2. One glimmer of hope is that communications companies are seeming to tread water.

    It may change the venue for the coffee-house chats or donut shop caucuses. But we still have great outlets (like this one right here), where we can have conversations, share ideas and swap stories.

    Another great one, Don. You’re closing in on that 1 million milestone!
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    Like most American’s I continue to struggle with it, but I have the coping skills to deal with it, it is just that I seem to be out of rolling papers right now and ……. Naw, that isn’t right. I just want to be able to hold my head above water sister, that is all.

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  3. Man I am with you on this one.

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  4. Love your blog!

    Care to exchange reciprocal links?

    We think alike, see my thoughts on this
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    We do not do blog rolls thanks. Good luck on your site.

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