Saturday, January 12, 2013

AIG: Biting the Hand that Saved Them

I am happy that insurance giant AIG has opted out of a lawsuit against the US Government for lost revenue for its shareholders.

I have noticed a great number of television commercials promoting how good AIG is and how it has fully repaid, with interest, the bailout monies.

The article I referenced writes about the lawsuit as follows:

The board of AIG decided on Wednesday not to join a lawsuit against the U.S. government over the terms of the company's bailout, following two days of fevered backlash from Congress and the public over the prospect. 
AIG had been weighing whether to join a lawsuit filed by its former chief executive, Hank Greenberg, and his company Starr International, which owned 12 percent of the insurer before its 2008 rescue.

It seems that some at AIG feel that the bailout was unfair to shareholders.

Reality check!

If there had not been a bailout, the shareholders holdings would have been worthless--or at best worth pennies. That the shareholders still have shares, still have investments, and still have a company which is making a return on their investment is due to the overly generous bailout provided by the people of the U.S.

And if that is how major corporations and businesses in America say thank you, we are really in trouble!

I am reminded of the Aesop fable about the scorpion and the frog.

They should have been left to go bankrupt for their unfair and ill advised investment strategy.

Just saying!

-- Bob Doan, Elkridge, MD
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