Saturday, April 11, 2009
"New officials in Washington are commonly warned not to say or do anything that they would not like to see on the front pages of the Washington Post and the New York Times. An older authority--the gospel of Luke--had it: 'What ever you have said in the dark will be heard in the light, and what you have whispered in the inner rooms will be proclaimed upon the housetops.' ... 'Secrecy is the first essential in affairs of state,' declared Cardinal Richelieu. His conduct as first minister of France easily explains his insight. Those who lie constantly must avoid being found out. ... The US government has been a secrecy addict for decades. In 2007, the agencies of government made 23 million classification decisions, up from eight million in 2001. Financial secrets rarely get into the government's formal classification system, and classification isn't what is cloaking today's most harmful secrets. Treasury, the [Fed] and the regulatory agencies are hiding information by classifying it in an even more insidious way--by saying it is too complicated for us to understand. ... Consider [AIG], the giant insurance company that did not go bankrupt a few months ago, thanks to injections of debt and equity capital from the government. AIG is now a money addict, and 80% owned by the people of the US, for whatever that is worth. ... But goverment agents, supported AIG's every effort to avoid coming clear about its counterparties--the banks and institutions that received payments funded by the government's money. AIG recently published a list to deflect public fury about a trivial side issue--the much-denounced bonuses--but disclosure has been grudging and still seems incomplete. From the presidents on down, two adminstrations have said that if the government didn't help AIG pay its obligations, the world financial system would be threatened. ... The government has instead--at a very high cost--tried to give itself plausible deniability. But the furtive payment of bounses is just a signpost of further trouble at AIG, Fannie Mae and Freddie Mac, and probably at other bailout buddies, yet to be named. ... The Treasury should drive a hard bargain with AIG--taking it into bankruptcy now and appointing a trustee to supervise orderly dissolution of its untenable obligations. The second argument, about the ironclad contracts, has a simple answer: 'So sue me.' Treasury should be asserting that the bonus contracts were fradulent, rooted as they were in rewards for disguising sewage as single-malt whiskey. ... Bankruptcy would have been far preferable to the current mess", my emphasis, Thomas Donlan (TD) at Barron's, 23 March 2009.
As one wag noted, the Godfather of old made you an offer you couldn't refuse. Today's banksters make you an offer you can't understand. How times change. I agree with TD, AIG should have been forced into bankruptcy months ago. As for the lawsuits, they'll never happen once the AIG "bonus babies" (AIGBB) see some Wall Street capos indicted for securities fraud and Lev Dassin (LD) discreetly lets them know one thing which would militate against their indictments is not having received any purloined funds. Talk of painting a target on your back! Suing for an AIG bonus. If LD convicts enough of these AIG fools, he could run for New York Governor. And win! Would anyone in his right mind sue for an AIG bonus? The complaint is a public record. Within ten minutes of filing it will be all over the internet. Within ten more minutes any dirt available on the AIGBB will surface. Good luck AIGBB. Within ten more minutes 100 protestors will arrive at the AIGBB's house demanding LD indict him and that he drop his suit. His kids will ask him, "Daddy is it true what they say? Are you a crook"?