“If I haven’t seen it, it’s new to me.” Well, this news is just a few weeks old, but it still begs a review from an enlightened POV. Remember AIG (American International Group), the name probably most closely associated with bitter feelings over the government bailout of financial institutions in the immediate wake of the financial collapse of last year? Well, the axed chair and CEO, Maurice Greenberg, is constructing what could turn into a new financial giant, and its recent progress is drawing some scowls.
Of particular irritation to some is that Greenberg is recruiting from among the ranks of current AIG workers. The restrictions which the Fed placed on AIG as terms for its bailout “loan” have strained payroll and reduced employee salaries. This may serve as an incentive for the talent to bail out of AIG and join Greenberg’s new crew. These developments inspire some concern that Greenberg is going to build an AIG 2, and it follows that AIG 2 would take business from AIG 1. In fact, a concern has been voiced that Greenberg’s new project could put AIG out of business, in which event, the billions it owes the Fed will never be repaid.
Well, obviously! Why should anyone have expected a business that’s run even in-part by the government to operate competitively (barring unethical practices like subsidy)? The direction of financial institutions by the government (remember Fannie Mae and Freddie Mac?) almost single-handedly precipitated the lending bubble that culminated in last year’s financial crash.
Need a fresher example? President Obama said his health plan, whose cost he estimated at nearly a trillion dollars, could be mostly paid for by cutting waste in the current government-run health programs Medicare and Medicaid. Excuse me? If there’s that much waste in the current government-run health programs, why would we let them arrogate the entire healthcare industry? (Why do we have a healthcare crisis in the first place? Because the entire industry is already heavily regulated by the government. Compare the healthcare industry to present-day AIG.)
So there’s the news in a nutshell: Maurice Greenberg still has the expertise (and perhaps the sleaze) to operate a business effectively enough to inspire fear in those who entered the field of politics because they lacked such real-world skills as economics and business management.
(I wrote this blurb for work, but they declined to post it, so I put it up here.)
