AIG: Thank you, America -- and see you in court
Commentary:
(MoneyWatch) American International Group's (AIG) board of directors is meeting today to decide whether it should join a lawsuit against the U.S. government over the $182.5 billion infused into the insurance giant in 2008 and 2009. Meanwhile, AIG is running an advertising campaign it dubs "thank you, America,"
In my view, this may yet turn out to be the best example of "no good deed goes unpunished."
Let me take you back to AIG's 2008 annual report, where it posted a $99 billion loss. This is not a typo -- that's nearly a tenth of a trillion dollars. How did such brilliant minds lose such a staggering amount? They bet the farm on insuring a kind of financial derivative called credit default swaps. By September 2008, AIG's stock had plummeted 95 percent, and its credit rating had plunged.
- Bailout out AIG considers joining lawsuit against U.S.
- 10 lessons from the great stock crash and recovery
- 3predictions for 2013
AIG's access to capital had dried up, and I happen to agree with the Bush Administration's decision to inject taxpayer dollars into the company. Without TARP, we may be using the bartering system today.
AIG is not a victim of the financial crisis. To the contrary, they were perhaps the largest player in the short-term greed that created the crisis. As the financial crisis was worsening, I pointed out that my dog Max, awarded a plaque as America's top financial planner, made $99 billion more than the geniuses of AIG in 2008.
While I'm glad AIG repaid us taxpayers with a profit, let's put it in perspective. A $22 billion profit on a $182.5 billion investments amounts to a 12 percent rate over about a four-year period. In my book, that's a pretty good rate for a company that would have gone bankrupt without it.
In my view, we taxpayers should be the ones suing the AIG management that led us to the near financial collapse. Let there be no doubt, I will not be starting a marketing campaign saying "thank you, AIG."