The news today that yet another American finance giant, AIG, has been bailed out by their “capitalist” government, led me to wonder how much their “leaders” made out of their destruction.
Martin J. Sullivan, their former CEO (he was fired last June), took home nearly $40 million dollars in compensation in the last five years according to Forbes. He had only been in the job three years. The previous CEO, Maurice R. Greenberg, was asked to resign by the Board in 2005 due to “accounting irregularities”. Charges were brought against him by Eliot Spitzer, then attorney general of New York State, who later became Governor of New York but had to resign when his penchant for high-class hookers hit the press.
Greenberg, by the way, still has a job (currently chairman and CEO of C.V. Starr and Company, a diversified financial services firm) and Business Week said of him in 2002 “But few run their business better than Maurice R. Greenberg of American International Group Inc.”.
This is the reality of American-style capitalism. Fat rich white guys milking the system for their own profit. Then, when their greed leads to the failure of the company, and taxpayers’ money is used to bail the company (and the company’s investors) out of the shit, nobody does a damn thing about it. Will Sullivan or Greenberg face charges? I doubt it.
How long are we going to let it continue?
“Will Sullivan or Greenberg face charges?”
Have you heard something I haven’t heard? McCain used the F word (fraud) but I haven’t heard it in any other news sources.
This is just a business failure as far as I can see. Businesses fail all the time. Being shit at business isn’t a crime.
For 40 years in the insurance and reinsurance industry I have observed this a solution needs to come. Who put Martin Sullivan in charge? How do you handle $460 Billion in credit default swaps?US Total P/C market share puts AIG 2nd with 7.5%.Liberty Mutual, Travelers, CNA, Berkshire, and CV STARR will make their move now on AIG.
I was talking to one of the guys at work about this and they were saying that every dollar that goes into an american bank gets leveraged on 8 times !!
its simply Not sustainable
The truth is that this was not possible back in the good old days when the american dollar was tied to the gold standard.
The fat white rich guys were’nt not making enough money so they changed the rules.
The problem for us is that AIG’s ‘business failure’ is going to going to cause problems with our economy.
The dow fell 450 points yesterday, who knows what effect that is going to have on the all ords today. I would hate to think what would have happened if the fed didnt bail AIG out.
They reckon all parts of the australian economy are going to be affected with the exception of mining (phew)
They should have returned to the gold standard as goldspan suggested in 03
J