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April 18, 2009

Where Is Anger Over AIG Tax Scam?

-- by Dave Johnson

Does everyone have bailout fatigue? Are we burned out from being angry about our tax dollars being used to help a few "too big to fail" operations?

How else can we explain that almost nothing is being said about revelations that AIG -- one of the biggest recipients of tax dollars in history -- was helping big corporations and the wealthy avoid paying their taxes?

WE - the ones who did pay our taxes - are bailing out a huge operation that got rich partly from helping the rich and big corporations avoid paying their taxes.

A few days back I wrote about AIG's Tax Dodge Business,

AIG FP was one of the biggest players in the business of engineering offshore tax shelters for corporate and private clients that resembled a multibillion dollar tax evasion scheme called Son of Boss (we don't have time to figure out why) that thousands of corporations and wealthy individuals used to book phony capital gains losses and evade most or all of their income taxes in the late nineties and early 00s.

When are we going to start talking about getting the money back? When are we going to start talking about accountability for the people responsible for all of this?

Why is Obama surrounding himself with people who come from Wall Street - Goldman Sachs in particular - whose solution is to pump all of our money into the Wall Street they come from and not even tell us how it is being used? When are we going to start demanding that Obama bring in people who will hold people accountable? (That applies to holding torturers accountable, as well.)

Posted by Dave Johnson at April 18, 2009 8:30 AM


Comments

Krugman agrees that Treasury plan will not work.

Nobel prize winner Stiglitz says it will not work:
http://www.bloomberg.com/apps/news?pid=20601087&sid=afYsmJyngAXQ&

Actual investor, top left-center blogger, Ritholtz says Geithner will fail:
http://www.ritholtz.com/blog/2009/04/why-creditors-must-suffer/

Dr John Hussman, top investor, says the plan will not work:
http://hussmanfunds.com/wmc/wmc090406.htm

And who understands why Geithner 'approved' the new AIG chief who is the BOARD of Goldman while AIG passes tax money back to Goldman?

This is big. Not just a few political points scored for the opposition. No, instead a HUGE gap down for employment, markets, confidence. A huge gap UP in TURMOIL.

Posted by: Mace [TypeKey Profile Page] at April 18, 2009 9:33 AM

i dont know which is worse - the torture "free pass" or the bailout "free pass" -- it is hard to believe sometimes that we have gone this far down the road to hell.....

Posted by: distributorcap [TypeKey Profile Page] at April 18, 2009 10:17 AM

One wonders what, exactly, AIG as a company is still doing well?

To be more precise, how much better are they doing whatever they are doing than if the government were to take them over? As taxpayers, are we making a sound investment, or should we cut our losses?

Posted by: Dan [TypeKey Profile Page] at April 18, 2009 7:47 PM

Dan,

AIG companies could be a huge asset to us but the gov't, the media, and the public have caused a precarious situation. Sure, AIG-Financial Products Corporation (one of AIG's 200 plus companies) caused the mess with AIG. The other companies are strong. Problem is:
would-be-buyers that were lined up in the fall weren't sure of their own balance sheets and the credit wasn't available to them right then--thus why AIG needed time (AIG companies were that lucrative--and I'm speaking of the regulated ones with oversight. AIG-FP was not regulated--thanks to the Commodities Futures Modernization Act slipped in the Spending Bill by Phil Gramm--ie, no one read it, evidently--but voted anyway and Pres. Clinton signed it in Dec. 2000. This allowed no oversight by the SEC for AIG-FP and any Wall Street Companies. Back to the backroom bucket-shop gambling shops--pre-Great Depression--all courtesy of our government. Who knew it?--we were all focused on hanging chads in Florida (Bush vs. Gore)--perhaps Congress was too, but that's no excuse. Clinton was battered (no excuse either.) Bush would have signed the bill anyway once in office and I'd rather that than know that Bill Clinton signed it.
Gambling basically was legal then on Wall Street and deregulation has continued over the past 8 years. Didn't take long to crash and burn. Even Greenspan was shocked.
But AIG-FP is only a small company (amazing that it dealt in enough money to bring an entity of 200 strong companies to its knees.)
What is stupid and sad is that following the loan to AIG-- the gov't, the media and public have acted so badly that it's been the equivalent of trashing our own company. If we own it, we better treat it right.
There are too many excellent companies that should have already been sold (if the PR had not devalued these companies--it's irresponsible of Americans--any of us.) The AIG loan could have been paid off by now and with hefty interest.
The regulated companies (and, for example, there are 71 life insurance companies in the US) are OK, but the problem is that they are not being allowed to do business. If they try to, they get yelled at or get plastered all over the news. They are so large that to compete with Prudential, The Hartford, MetLife, Lincoln, etc., they can't do shoddy business (if we want our money back.) At present they are not allowed to fly to see their clients, not allowed to show up at conventions where the other large insurance companies are (that we do NOT own), etc. Not allowed to compete with Prudential, Metlife, etc. So guess where the business is now going? We need to wake up and see this. American taxpayers' anger has not been managed well at all. The situation hasn't been explained to the American people by anyone although AIG has tried, but gets slammed every time, plus the language is not in story form, it's too legalize-ish for the average person.
I don't understand why Obama has not pushed hard to have the CFMA (look it up on Wikipedia or other sources) repealed. To have Glass Steagall put back in place. Those are no-brainers. Should have been done lst day Obama was in office.
There will always be those who have more money or who take money and who find loopholes, etc. Think, though, when the economy was sailing along, no one with a 401K or a 403B was complaining as their portfolio grew. The laws that are on our federal books actually allow the stuff that happened to happen. That's what's so stupid. Write (letters) to Obama and to Congress, call, etc. and ask for these safeguards to be put back in place immediately. And for gosh sakes, don't slam the good companies (and there are many) in AIG--we need them and they had zero to do with AIG-FP's mess--we own these good companies. We can still get money out of them. The employees are standing strong (and they aren't AIG-FP salaried/bonused people either); they want their companies to be sold even if it means their jobs are lost. Perhaps all jobs won't be with mergers. We don't need more people on unemployment.

Posted by: Sam [TypeKey Profile Page] at April 18, 2009 10:56 PM

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