The head of AIG’s Financial Products submitted his resignation letter yesterday. After governmental harassment and extortion by both congress and 2 state Attorney Generals (Nancy Pelosi, Barney Frank, Andrew Cuomo, Richard Blumenthal) who can blame him? I realize there’s little sympathy for someone who has made so much money from a firm that is one of the lynchpins in the global economic meltdown. But there are still limits to what government can do to a private citizen.
Just to lay out few of the facts: the mastermind behind the “great global meltdown” was one Joseph Cassano, head of AIG’s Financial Products unit (AIGFP). In essence he set up a huge, legal –in so far as it wasn’t illegal – gambling hall that created their own chips (credit default swaps) which they then sold to gamblers to play with. Every time they wanted to play, they bought more chips. As we know, gambling is addictive and the endgame inevitable.
If you are looking for a scapegoat, start with Cassano. Unfortunately, he is no longer employed by AIG. Secondly, look to the people he worked for: Hank Greenberg, Martin Sullivan, Robert Willumstad (Greenberg’s successors) and the entire AIG Board of Directors - supposedly responsible for oversight of the company. These idiots let Cassano run his casino without comprehending either the operation or the risk. Therefore there was no way to calculate the exposure. If you’re just looking for villains at AIG, these are your guys.
But our grandstanding politicians – anxious to deflect criticism – have scapegoated and vilified not just Edward Liddy, the guy brought in from outside the company for $1 a year to oversee his predecessors mess, but all the people in the AIGFP unit who are trying to unwind the bets, identify assets tied to the bets, and otherwise squeeze blood from a turnip.
But because the crowd has called for blood, New York Attorney General, Andrew Cuomo, threatened to release the names of anyone who wouldn’t give back their bonuses. And he did this even knowing that the angry mob mentality had already resulted in death threats to them and their families (warning, this link is nasty). The grandstanding Barney Frank didn't feel they deserve any confidentiality either. After all, they are criminals aren’t they?(How’s that class war working out so far?).
This sounds like nothing short of extortion; and make no mistake, extortion of a private citizen by the government is the worst kind, as there is no recourse. It is the definition of abuse of governmental power, and cannot be tolerated. I don’t care how you feel about these people – most of whom were not the ones responsible for the creation of the credit default market mess – the government does not have the right to harass its citizens. Every citizen should be outraged by this overreaching authority.