U.S. Drops Case Against AIG

The Department of Justice declined to comment.

I guess it was just too much of a can of worms for Holder and company.

Backdoor socialism - ask Rick

Is this Government as investor or is it backdoor socialism?

NEW YORK (AP) -- American International Group Inc. completed a sale of preferred stock and issued warrants to the Treasury Department as part of a previously announced plan to receive additional financial support from the government according to a regulatory filing submitted Monday.

New York-based AIG said in the Securities and Exchange Commission filing that it sold preferred stock and issued warrants to the government on Friday in exchange for $29.84 billion. The new funds are now immediately available for AIG's use.

The additional funding was announced last month when AIG disclosed a fourth-quarter loss of $61.7 billion, the largest ever quarterly corporate loss in U.S. history.

As part of the deal, AIG must avoid bankruptcy and the government must remain the majority owner of the insurer. The agreement also restricts AIG's ability to
repurchase stock and requires limits on corporate expenses, lobbying and
executive compensation.

Government investment, backdoor socialism? That depends. Ask Rick Wagoner and see what sort of answer you get.

Obama thugs out Wagoner.

Politico: The first paragraph says it all:

The Obama administration asked Rick Wagoner, the chairman and CEO of General
Motors, to step down and he agreed, a White House official said.

This is not America.

True, Wagoner left a lot to be desired. But the government should NEVER be in the business of telling companies who to hire and fire. That decision belongs in the hands of the shareholders. Just as the shares do not belong in the hands of the government.

Obama can claim he is simply following Paulson's lead where Paulson had asked for the head of AIG CEO Robert Willumstad as part of that bailout. But if Paulson had decided to jump off a bridge... In a sense that is exactly what is happening here - they've decided to jump of the bridge of capitalism into the frozen waters of socialism.

Yesterday, I called it bizarre. Today, I'm calling it frightening.

A different take on the banking crisis

A thought occurred to me yesterday regarding the AIG bonus kerfuffle, if I may be so bold as to call it a kerfuffle. What the Democrats are doing regarding taxing back the 'talent' at AIG is in a weird way, analogous to allowing the bankruptcies to happen.

True, the bailouts are spreading the pain from those stupid enough to make bad decisions to the taxpayers as a whole. Bankruptcy would allow the taxpayers to escape the financial impact because only those invested in the specific at risk institution(s) would be impacted. However, looking at it from a personnel perspective, the result may end up being the same as a bankruptcy.

In the case of a bankruptcy the 'brain trust' of the banking institutions would be out of work. In the case of the bailouts, you'd assume the same people would still be working. However, given that the claw back of 90% of the agreed upon bonuses is occurring, many of these people while not yet out of work, are most likely looking for alternative work. And by alternative, I mean outside of the financial services industry, which apparently is subject to imperial whim at this point.

So the net effect of either approach is that there will likely be a talent drain away from the financial services sector, given that at least some of the talent has skills transferable across other industries (project management, mergers, acquisitions, legal, marketing are some examples).

This may be a good thing for the economy. If the true talent shoe horns it's way into manufacturing or technology industries, then that can only be a boon to those industries, and potentially for American manufacturing. There's no guarantee of that happening of course. But while the financial sector is key to a prosperous economy, manufacturing is still arguably the backbone of any nation.

On the other hand, it may speed the nationalization of the banking industry. This would definitely start a downward spiral of American economic power, and start the thought process of "what else can we nationalize?" Both of those things are bad, and both can be brought on by the same symptom - exodus of talent from the industry.

Conversely perhaps Democrats believe that these people are trapped - their skills are too specific to change industries and they are too American to go work in Hong Kong or London. If that's the case their cynicism and antipathy towards those affected is pretty harsh.

Overall, losing executive talent in the financial industry nets out as a bad thing. While creating a climate where executive resources are self-diverted to manufacturing, creating American jobs in the process would be a good thing, it's not being done that way, and there are just too many down sides to letting or causing it to happen.

Dick Morris was on Sean Hannity's show this week arguing that the Obama administration, by offering a hand to the industry and then using the same hand to slap the people in the industry, is complicit in trying to drive the failure of the banking industry precisely so that it can be socialized. At first I thought Dick Morris was being over the top to help flog his latest book, but on reflection, there may be some truisms in his points.

The Epic Failures of Barney Frank

Barney Frank has assaulted AIG over it's handling of it's finances, given the bailout money provided the federal government to combat the financial crisis. To be sure AIG, granted billions by the federal government with apparently very little in the way of oversight, doesn't seem to feel like it needs to be held accountable to generations of American taxpayers. It's a scandal. Or perhaps it just feels like it is meeting contractual obligations. Nevertheless, at least optically it looks bad.

Upon closer inspection, what looks worse are the failures of Barney Frank in his responsibilities to the American taxpayers. While his actions have not been directly responsible for the poor allocations of billions of taxpayer dollars...wait, they have been.

Example 1: The Housing Bubble and Credit Crisis news video




Example 2: Spend, spend, spend (on CNBC business segment)




Example 3: Decriminalizing Marijuana



Just a sample of the Barney Frank train wreck. Why this guy is not run out of office is beyond understanding.

Top 10 Obama Quotes

The Top 10 Barack Obama Quotes caught on video.

[Note to Feed subscribers - please visit the site for videos]

#10 My Uncle Liberated Auschwitz: Was your uncle a Russian?



#9 Clinging To Guns and Religion: The TelePrompter is the real brains of the operation.



#8 57 States: Isn't that supposed to be Heinz 57 Varieties Steak Sauce?



#7 Health Care For Veterans: Dumber than soup.



#6 Spread the Wealth: You get what you vote for.



#5 Selma Marches: Faulty Memory or prenatal memory?



#4 On AIG, pre-election: All over the place except specifics



#3 Various Babblings: Just slow down and catch your breath.



#2 Fallen Heroes in the Audience: Obama Sees Dead People



#1 Bank of China Credit Card: Brutal hypocrisy.

Classless Warfare on AIG

Democrats have always used class warfare as a vote getting method. Class warfare in this sense meaning play off the poor and the middle class against the rich. Blame the rich, promise to punish the rich and watch the votes from the poor and middle class flood in. But while the mentality of "hang the rich" may have made sense in Marie Antoinette's France, in modern day America it is a baseless notion and a base instinct.

After all, the United States has a welfare system, as imperfect as it is. No one should be going hungry. No one should be homeless. True there are people who do, either by choice or by neglect. That is why it is an imperfect system. That and the fact that the welfare structure creates and reinforces a cycle of dependence.

More importantly though, those who create wealth for themselves, through the truism of Adam Smith's Invisible Hand, also create wealth for others by creating jobs. To punish them is to punish millions who depend on them for jobs or for products as cheaply and freely available as possible (with quality as another important factor). They are not saints nor are they martyrs. But they do help the economy.

It is against this backdrop that the AIG bonus scandal unfolds and the Doomocrats reveal their unrepentant classless warfare in order to maintain their supposed claim as champion of the little guy, as well as their hypocrisy with respect to the details of the controversy.

Consider the following;

-$20 billion of the AIG bailout went to European banks - talk about a lack of oversight.

-Chris Dodd hypocritically wants to get the bonus money back from these executives;

While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law.

-These bonuses were paid to employees (often executives) - people who worked in good faith towards a contractual obligation. Was it a poorly written contract that was set up to reward failure? Yes. Was it a legal and binding contract? Yes.

-Geithner knew about this issue as far back as last week or he was clued out about it when he should have been paying attention. Either way, it doesn't look good on him. Hiding from the fact to 'champion' the little guy, is more evidence of hypocrisy and deceit. What's worse - the Feds knew for months about it. There's a disconnect. So why the sudden fury over the bonuses weeks after the administration parceled out another $30 Billion for AIG?

-Chuck Schumer and Nancy Pelosi (among others) want to claw it back using the intimidation of the state. That is taxation without representation and truly institutionalized theft. It also smacks of Democrats refusing to admit to an error in oversight or in judgement.

-Finally President Obama is going on the tonight show because he is still either in campaign mode or in calm-and-trick-the-proletariat mode.

Given all that, what can we call the Dems except cynical vote hungry politicians without a conscience? Unfortunately the MSM won't get that point across to the public, it doesn't fit with their objectives. But if the shoe fits, wear it.