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Wall Street Arrogance Meets Washington Meekness
Citigroup, once the world's largest financial conglomerate, has fallen so far down that you can buy a share of its stock today for less than it costs to use one of its ATM machines.
A few days ago, however, Citi caused investors' hearts to go pitter-patter with joy when it loudly trumpeted that it had operated at a profit in January and February. It just goes to show you what enterprising Wall Street financiers can achieve through hard work, creativity, perseverance -- and about $45 billion in taxpayer bailout funds. Think how much larger the profit could've been if only taxpayers had done more!
Well, for that, look to American Insurance Group. AIG, the global insurance colossus, is the reigning King of Bailout Nation, having pocketed four bailouts in the past six months, totaling $170 billion.
This was necessary, we're told, because the insurer's cocky, unrestrained "financial products" division provided trillions of dollars worth of exotic insurance policies to cover even more exotic investments being made by big banking houses. AIG's assumption in writing these policies was that there'd be few if any claims made on them. Whoops. Last year, as banks began crashing, the claims started pouring into AIG, which didn't have the money to pay them off.
The insurer instantly became the poster boy of Wall Street's "Too Big to Fail" movement, and Washington started shoveling on the cash. Where are our billions going? That's "proprietary information," AIG execs told Congress, the media and the taxpayers. Excuse me, hotshot, but our bailout money gives the American public 80 percent ownership of your company. As Rep. Carolyn Maloney told New York Times columnist Gretchen Morgenson: "We are the proprietors now. Taxpayers own the store, and we should be able to see the books."
Right she is! But both AIG and its federal overseers in the Obama administration are stingy with such details, stiffing the paying public's obvious right to know.
On March 15, We the People were slapped again with AIG arrogance, learning after the fact that top executives were paying about $100 million in bonuses to the very same geniuses in the financial products division who broke the company. Without awarding bonus pay, explained the honchos, some of "the best and brightest talent" might leave. You don't need a big nose to smell that garbage, do you?
Please contact your local newspaper editor if you want to read Jim Hightower's column in your hometown paper.