more bailout money for AIG

boyohboyohboy wrote: where does this money keep coming from? and when they originally sat down and decided what to give to them the first time, didnt they consider what amount they needed? It just seems so fishy to me that they have had an additional two other pay outs now..especially after the press reported that they used the first set of funds so inappropriately and the employees spent it on spa treatments for one thing.

I know that the economy really cant handle for AIG to go under. my own parents get their pension thru them. this would really hit hard in my own family..
but I dont think they should get more money.

and I am just wondering where does it come from? do we just print more? and when the loans we have taken from china and other countries come due how are they paid out? I mean just saying the US owes money its not like that is actually a person...how and who is held accountable and what if it cant be paid, for a normal person it ruins their credit report and they go bankrupt but how does that affect a government?

mammag replied: I know, it's absolutely insane! The thing is, these companies don't even have to bother trying to find another way out of their troubles because they know they can get bailed out now. It's like the welfare system, if you know there is free money to be had, what is the motivation to provide for yourself, in this case what is the motivation for them to fix it themselves?

I caught the end of 60 minutes the other night and they were talking to Ted Turner. I'm not a big Ted Turner fan but one thing he was talking about struck me. He was saying how one of his business' was failing (I wasn't paying enough attention to remember what it was) and there was no government bailout at that time. He said something to the affect of making it by the scrape of their "chinny chin chins" (he actually said the chin thing ).

Now I certainly don't have the answers but I am so sick of the government thinking they can just throw money (OUR money) at any problem.

boyohboyohboy replied: I am just wondering what happens if we cant pay it back, other then the value of our dollar being worth nothing..
but if we cant pay it back would another country then have more say over our own government?

jcc64 replied: Yeah, how about somebody coming and paying off all of MY debt?????????

I heard a story on AM talk radio this morning, fwiw, about a lavish AIG party for executives at some swanky resort out in Arizona very recently, where everyone involved was instructed NOT to let on that they were from AIG. I'm sure some of you are familiar with conferences and corporate retreats- everyone wears name tags and there are signs and company logos everywhere. Not this time. They don't want anyone knowing they're partying on our dime. Totally infuriating. All I can think of is that they've gotten so accustomed to their shameless debauchery that they don't even realize how out of line it all is at this point. It's like their version of "Let them eat cake!" Well, the angry citizens are about to storm the Bastille, folks......

cameragirl21 replied: lol, where does it come from, you ask? You and me, Stacy...it's taxpayer money being used to bail out AIG. Idk about you but I didn't volunteer to bail them out with my money.
Meanwhile, I have a boatload of student loan debt...who's going to come and bail me out while my tax dollars are going to bail out large companies...?

Kaitlin'smom replied: I am sickend by this. I would rather use MY money to bail myself out. Its hard with one income. Now they are using MY money to bail out AIG. I just dont see anythign getting better any time soon.

lovemy2 replied: I think even beyond worrying about the billions and billions we are shelling out to them - which does concern me - I wonder why ONE company like AIG is holding so many eggs in their basket so to speak - why is ONE company linked to so many things that its own failure can ripple the way this could? That to me is what's fundamentally WRONG with the whole scenario....

boyohboyohboy replied:
christine thats a good point, why is one company so much more important then any other? why not just give the money to the auto industry and then the airlines?
and I guess I know that some of it comes from taxes, and that might mean that some of our other worthy programs are cut to pay for it...

I wonder if people complain to their congressmen about this? I wonder if enough people did what would happen, although I guess maybe so many peoples retirement is wrapped up in AIG, that not many are going to complain if they are given yet another hand out...

What about them keeps congress from investigating where the money is going? who keeps track of their books? you would think being given so many hand outs someone in the government would make them more accountable.

lovemy2 replied:
From what I understand and I admit its mostly what I hear in the media and conversations I have had with partners in my firm, etc. is that AIG is wrapped up in retirements, homeowner's insurance, life insurance - things that can affect billions and billions of people - it if I heard correctly insures Fannie Mae and Freddie Mac and if AIG were to fail it can put people like me or you who pay our mortgages on time, can afford them, etc. in jeopardy of losing our homes when we have done nothing wrong and have kept up our end of the bargain (mortgage) so it has major effects on many many things, that is why the gov't can't afford to let them fail - the fall out would be much more costly - THAT is what I don't get - why is ONE company in charge or in control of so many things....as for the books - they are a private company and they run their own books - but they are public record - take for instance Lehman Brothers - their financials are public knowledge but they know how to show them in such a way that people look at one thing (like their price per share for instance) and think WOW they are doing well but in all reality if you dug farther you would see that they had been in trouble for almost three years before they went under - this I know from my accounting classs - we examined their financial statements pretty closely - its a scary thing....all of it....

jcc64 replied:

There used to be rules put in place after the Great Depression to prevent any one company from getting too large or influential, such as AIG. But government safeguards have gradually become a casualty of de-regulation and the unremitting Republican campaign to dismantle "big government." I'm not trying to turn this into a debate, this is just a historical fact. Right here at PC, we've had MANY discussions where people have clearly expressed an aversion to "big government." Well, this is what happens when greedy corporations are left to their own devices, and now the taxpayers are stuck holding the bag, and I thoroughly resent it.

lisar replied:
AMEN to that. I dont need billions either or even millions. I just need a few hundred thousand and I will be happy. Heck if they would just make my car payment for me this month I would be happy.

jcc64 replied:

Me too, Lisa! But nobody really cares if we "go under," so I won't be holding my breath waiting for the check!

boyohboyohboy replied:
so are you saying there are no longer laws that prevent this type of thing from happening?
also I have posted in the last few months with the election being this year, that I have taken a bigger interest in government lately..
that being said. I have called myself a republican because they tend to agree with my ideas of no abortion, no gay marriage, more conservative behavior. more family first type thinking..
but I am starting to wonder with comments like the one you made, if that is true that maybe thats why so many people remain independant?

and I am also running thoughts thru my mind, that if we are really in a democracy, why are all these things done outside our control. I mean the election might have represented the majority as far as wanting one person to run the country, but now look, there are things going on that are not right...and you might come back at me with the fact that the neew administration hasnt taken over yet, but it would seem to me, that if people dont like whats going on, there should be more of a system check where there is a majority of people that can request an investigation into these things..especially since taxes are used for it.

where is the system to check to make sure AIG isnt using the money for their own person gain, and that they havent hidden it somewhere, or are using to gain even more control over smaller companies that are competing with them?

austins mom replied: In case anyone is interested AIG is the company that backs the insurance for alot of things.. such as mortgages, auto, life and others. Alot of the reason they needed to be bailed out is sue to foreclosure and issues like that. Due to banks loosing money over this they are too. Just think everytime you hear of a bank closing or a mortgage co closing or a car dealer or something like that it affects them even banks merging affects them.
The issues with freddie mac and fannie mae also affect them. The largest part of aig buisness is from banks.

Sorry everyone. I do mortgages loans... So i hear about this stuff alot.

lisar replied:

I would still like to get my hands on some of that money. Just a little. I am telling ya sis, get me a loan and then make it disappear and I will give you half........ J/K

jcc64 replied:

Yes, that's exactly what I'm saying. I have no stomach for a big huge debate about Democrats vs. Republicans--so if that's where this thread winds up, I'm out. I will simply respond to your comment as factually as I possibly can.
Historically, the Republicans have always been the party that promoted the interests of the wealthy, big business, and those who favor small government. In the past, all three of these constituencies complimented each other nicely; that is, people in business favored small government b/c it made it easier for them to do whatever they wanted to do w/o cumbersome government regulations, like anti-trust laws designed to prevent the whole AIG thing. A lot of wealthy business people got a whole lot wealthier as a result of deregulation and trickle-down economics, which posits that tax cuts for the wealthy will stimulate the economy by creating job growth. Wealthy people benefited enormously by these tax cuts, but the middle class has been hung out to dry, the economy is in the toilet, and by all accounts will remain there for some time to come. Lots of people will be out of work as a result of this crisis. (I happen to be one of them). In addition, the party once associated with fiscal responsibility began spending money like it was their last day on Earth, and stuck our children with an insurmountable debt they will be paying for generations to come.
Somewhere along the way, it became obvious that in order to win more elections, the Republicans had to find a way to appeal to the middle class whose economic well being was directly at odds with their policies. And so they actively courted people who found the liberal social policies of the Democratic party distasteful or immoral. It's worked brilliantly for them up until now, when everyone's starting to realize that no one is representing their economic interests in Washington. So basically, if you're a middle class voter, you have/had a choice to make. I guess you need to ask yourself what's a bigger priority--your economic well-being or social issues like abortion, gay marriage, etc...For a long time, people have been comfortable enough to ignore the fact that policy was being created that essentially took money out of their pockets and put it directly into the pockets of those who had more than enough to begin with. Everyone's been carrying on about socialism with this election cycle, and to me, it's been happening all along, but in the reverse order--via corporate welfare.
We have no choice but to bail them out now, b/c they've gotten so enormous that if they go down, they'll take all of us with them. But we need to ask how we got into this situation in the first place. I'm not suggesting that the Democrats hands are clean either, because they're not. But they do appear to be the lesser of two evils in this scenario.

boyohboyohboy replied:
I guess as a new voter, I never thought about the fact that I may have to chose between economics and my moral beliefs.
I was voting based on a plan that was about the majority of what I believed in.
I still feel I did vote based on what my faith told me to.

I am not tring to spark a debate, I honestly dont have opinions about rep.or dem. or favor any one party or person. I have just been learning as this whole thing enraveled. I never took an interest in school about this, and until I had kids, and things really started to affect out own household did I really start to look at it.

i dont own a business, and never had to think about how much government was involved in it before.

politics are not something my friends ever talked about. SO I am sure I am not in a minority. I dont think that the friends I had most of my life ever voted.

I am starting to doubt though the idea of a democracy. I see where we were able to vote the players into place, but everything seems so tainted now. I can see where voter fraud and mis use of power is taking a large seat here. so how do you ever feel like the peoples voice is really heard. I always just thought the people who felt conspiracy theories were just way out there. but maybe those things do happen more then we think. and it seems so unreal that no one really thinks it is happening.

I had this idea of how america worked, and now with this mess happening and more and more things coming to light I cant help but feel like government is just putting "paste" on everything to keep it hidden and functioning "As was" when they keep throwing money at things. the normal people in america, make a bad decision and their business doesnt do well, or they buy a home they cant afford, or use to much of their credit cards, and well, its to bad, you suffer the consequences, I am concerned that these people are not going to learn anything by what happened and think they can just keep doing it.

I am also wondering if the man that went to congress and asked for the original bailout asked for it for specific reasons, and they even made him ask twice to revamp what he wanted it for, is now after he got it, able to change how he is going to use it. that seems like an abuse of power.

everything about this seems so wrong. and if it has the attention of me the previously non voting, non-understanding lay person, why are the people who do this for a living not standing up and demanding more accountablility?
what do people need to do , write congress? complain?

thanks jcc for helping me understand

redchief replied:

Not a laughing matter I know. What's funny is that AIG merged in 1996. Anyone want to know who was controlling Congress then?

jcc64 replied:

Yes, yes and yes. I think it's great that you are starting to take an interest in what our representatives are up to, because the more aware and educated we all are, the less they will be able to get away with.
Imo, the main reason Obama was elected is because many people are feeling exactly as you are, and although he too is a politician, he ran on the promise of change. Even if many voters aren't exactly sure what should be changed, it's become blatantly obvious that the normal middle class person's interests haven't been on Washington's radar for a very long time, and only become important this year, in an election cycle.
There's a huge difference between being a conspiracy theorist and being cynically disenfranchised from years of disappointment. To construct a conspiracy theory there has to be a lot of missing information, which is not the case here. The facts are out there for everyone to see, it's part of the public record- people just haven't been paying attention because their lives have been relatively comfortable up until this point. Now we can no longer ignore an economic crisis that's been building up for a very long time as a result of reckless policy decisions.
An informed voter is an empowered voter, Republican or Democrat. Know what your representatives are up to, and breathe down their necks any way you can--write emails to your Congressional reps, stay informed, etc...If there was ever a time that we all need to be involved, it's now. We're the ones that are gonna be stuck paying for this mess. We should at the very least know what we're paying for.

And Ed, regardless of what was going on in Congress the year that AIG merged, the deregulation that made it possible started long before 1996, especially during the Reagan era.

boyohboyohboy replied: can you explain to me, didnt deregulation cause competition?
and isnt that a good thing, that should have kept AIG from getting so large?

and I have heard that the government told companies like AIG that they had to give more loans to people to stop turning them down or else they were going to start coming down on them.
(this was my interpretation of talk radio lately)

so if the government told them to do this, and it failed, why now are they acting like it was just the banks that did things out on their own?

so how do I find out what the addresses are of my own congressmen, and is it just senators that you start with or governors?

jcc64 replied: You can find the addresses, phone numbers, emails, etc... of your congressional reps online. This is not an issue over which your governor has any control, so I'd stick with your congressional reps and senators.
About deregulation, it's pretty complicated, but in a nutshell, there are two competing philosophies about gov't involvement in the affairs of business. Some people feel that business should be left completely alone to conduct its affairs how ever it sees fit. They are opposed to any laws or restrictions, seeing them as interfering with their ability to maximize profits. In short, they want to do whatever it is they need to do to make as much money as humanly possible. Nothing wrong with that- it's called capitalism, right? They make this philosophy look less self-interested and more palatable to the public by arguing that any gov't interference will compromise the health of their business, and may lead to lay-offs and other unpleasantries. I think most of the time, this piece of it is greatly distorted and exaggerated, but that's my opinion. This argument is also often used by people who do not want to take action to protect the health of the environment, as in global warming.
On the other side, there are people who believe that greed is an intrinsic part of human nature, and that if left unchecked, can lead to all sorts of catastrophic business practices, which is what we're dealing with right now. These people, of which I happen to be one, believe that there need to be safeguards, laws and limitations preventing any one company or person from becoming too big or powerful, such as AIG. There is a lot of historical precedent for this, mainly from the events that led up to the Great Depression, after which many governmental regulations were put in place to prevent it from happening again. However, people's memories fade, times change, and little by little, those safeguards have been chipped away by pro-business interests and politicians until they have very little standing in their way anymore. That's basically what's happening right now.
I would caution you from taking at face value what you hear discussed on AM talk radio. It's incredibly biased, and as you know, anyone can twist anything around to accomodate their own preconceived notions about the way things ought to be. We're all biased, I certainly am, but I don't have a radio show reaching millions of people. Fox News is biased in the same way as AM talk radio, CNN and MSNBC are biased in another way. I try to get my news from public sources--NPR or Public Television, mainly b/c they are not as beholden to the political perspectives of their corporate sponsors or owners.
I think you should talk to Ed, if you want a balanced perspective right here on PC. He's the conservative guy, he sees things much differently than I do, and if you listen to him and me, you'll wind up with both sides of the equation!

redchief replied: The anti-trust hearings that allowed AIG to merge were held 1995-96... with a Democratic Congress.

Don't get me wrong. There's plenty of blame to go around. The AIG mess isn't the problem though, it's a symptom. The problem is the epidemic of mortgage failures and the loss of consumer confidence that brought. That's why GM is looking for a assistance, too. The policy of selling mortgages to people who couldn't afford them has caused the near collapse of the world's financial system. That was a Clinton era policy.

We've already argued whether it's good for people to be able to purchase their own homes regardless of ability to pay, so I'm not going there again. I work 3 jobs to afford mine and my mortgage company was one of the first taken over by the Feds because of all of the junk mortgages they bought up (mine's not one of them... I have a traditional mortgage). If you stand on the side of "Yes, this was and is a good policy," then you must admit that there had to be a reckoning eventually. Eventually is now.

If you stand where I do, that people should be able to prove they can pay off their mortgage (principal and interest), then you knew when this policy was put in place that we were all going to wind up paying for it. I must admit, though, that I didn't realize the magnitude of the effect that a 20% loss in American real estate property values would do globally. This stupid, short-sighted policy has pushed the entire world to the brink of economic collapse. So, yes, we have to bail these big companies out. They were and are heavily invested in the failed program that our government set up... That's right, OUR government allowed this mess to happen. Cry corporate greed all you want, it was pushed and sponsored by the men and women we put into Congress and the White House in the mid-1990's. The system has been on the brink of failure for quite some time, and now we have to bail it out or the risk to our entire economic system is unthinkable.

Let's go back to deregulation. What that did was allow the creation of the mega-corporation. Even mega-corporations' goals are profit, though. Stockholders want to make money on their investments. If they don't, they get mad. So the big corporations have not asked for this... Their shortsightedness should indeed be called into question by the stockholders that are losing their shirts as I type this, but they didn't ask for the entire country to become devalued. Our government did that, and not in the last 8 years. I agree that the Bush administration has more than a few shortcomings, but the policy that is causing the financial collapse of America was put in place in the previous one.

jcc64 replied: Actually, a lot of it started under Reagan. Not the program that you are talking about specifically, but I know you're smart enough to realize there's much more involved in this calamity than one short-sighted program and poor people not paying their loans back. If our economy was THAT fragile to begin with, then we need to look much deeper into the whole idea of whether our particular version of capitalism is still sustainable in the global marketplace today.
I know companies want to make $$$, and I am aware that shareholders want a return on their investment, but they also don't want stupid risks taken with their money, and that is not the fault of the poor people that defaulted on their high-interest, predatory loans. These companies were making $$$ hand over fist, they knew it was bad, risky debt, and they were only too happy to look the other way as long as the cash kept pouring in.
Ed, there is no way that you will ever be able to convince me that Washington has been looking out for the interests of the average American middle class citizen, never in a million years.
I know you're working very hard to pin this on the Democrats, like a loyal Republican would, but I would implore you to get past the same tired partisan rhetoric and hold your own party accountable for the damage it's done. We all need to do that, both parties, because the stakes are just way too high at this point to keep lobbying divisive accusations back and forth.

Hillbilly Housewife replied: I think that if those companies wouldn't have loaned out money they didn't have in the first place, they wouldn't be where they are. They became big because they gambled so much more..smaller companies tended to only loan out money they actually had, which is why they're not going under like the big ones are.

It has nothing to do with people not paying back their loans.. because they're just giving money to a corporation that gave them virtual money. So people stop paying their loans.. the company still owes other companies the money that they loaned out.. which didn't physically exist.. so yes, people not paying back their 'loans' are what is bringing them down.. but the companies didn't have that $ inthe first place, so nobody to blame but themselves

jcc64 replied: Ed, here are a few links that speak to your assertion that the CRA and irresponsible poor people are the reason that our economy is in a nosedive:
http://www.slate.com/id/2204583/?from=rss
and
http://www.slate.com/id/2201641/