Tuesday, January 8, 2013

Privatization of Profit, Socialization of Loss: AIG to Sue Government for Bigger Bailout

By Jack Gerson

It doesn't get much better than this. According to the NY Times's "Dealbook" section, AIG, the giant insurance group that was bailed out with a huge amount of public money four years ago, is considering joining a lawsuit claiming the handout wasn't big enough. The lead plaintiff in the lawsuit, Maurice ("Hank") Greenberg, is a former AIG CEO who was forced to resign in disgrace in a share-price-inflation scandal more than a decade ago.

Greenberg is still one of AIG's biggest shareholders, and is a long-time ally of Los Angeles billionaire Eli Broad, former CEO of AIG Retirement and the leading U.S. proponent of the "business model" for public education. Although the Dealbook article (below) doesn't mention Broad, I'm pretty sure that he is also a plaintiff: four years ago, Greenberg and Broad led a group of investors (including several big-time Wall Street investment bankers) to protest the paltry $182 billion in taxpayer money being shoveled to AIG in the government bailout.

Eli Broad and "Hank" Greenberg are big on demanding accountability from public schools, from workers, from unions. But when it comes to themselves, their businesses, and their money -- well, that's another story altogether. They claim that they deserve big salaries, huge bonuses, and gigantic returns on investment because of the "risks" they take. But when their investments don't pan out, they demand to be bailed out and insist that they're entitled to profit at the public's expense anyway. And meanwhile, they insist that the rest of us -- the 99% -- pay for all of this through harsh austerity cuts to jobs, pensions, social security, health benefits and Medicare, essential services for children, the elderly, and the disabled.

Shared sacrifice indeed.  There's another term for this: Privatization of profit, socialization of loss.

Or: They got bailed out. We got sold out.

Here's a link to that New York Times Dealbook article:


1 comment:

Anonymous said...

Neither Broad nor Greenberg worked for AIG when the financial crisis happened. They hadn't been at the company for years. When govt interferes ala Elliot Spitzer (client #9), you can see what happens. Those gentlemen had their nest eggs in AIG. Had they been steering the ship, instead of the govt, AIG probably wouldn't of been in the mess at all. You'd be concerned about your nest egg, so were they.