Tuesday, March 24, 2009

Making sense of the mess

Some worthwhile reading on AIG and the wider political and economic issues at stake.

Is Physiognomy Destiny?
Last fall I thought Jamie Gorelick was emblematic of the disaster. Lawrence Summers is another poster boy for the flawed system that created the crisis and now prolongs it. David Warsh hits the gruesome highlights in a fair but tough-minded article.

Despite all his baggage, The New Republic thinks it is time to “unleash” Larry Summers. That is how our mediated democracy works. Those inside the charmed circle take care of one another. Once inside, no number of blunders, policy mistakes, or acts of dishonesty can undermine one’s standing.

In an honest, reality-based community, The New Republic would be interred next to the Weekly World News and Larry Summers would be fenced off from the levers of power.

The American Spectator zeroes in on another member of the Beltway elect.

Plenty of Rahm at the AIG Table

Why is the press so uncurious about Rahm Emanuel’s role in protecting the AIG bonuses?

Another hidden tidbit. The maneuvering around AIG was an all Democrat production. Pelosi and Reid excluded Republicans from the conference committee negotiations.

Maybe someone will ask President Obama how that fits into his efforts to transcend partisan bickering.

Edward Jay Epstein explains why AIG had to offer those retention bonues.

Sympathy For The Devil: Why AIG Had No Choice But To Pay

Joe Nocera provides a welcome level-headed assessment of the state of play and outlines the danger of mindless AIG bashing. (Hint: it costs the taxpayers money.)
The Problem With Flogging A.I.G

Nocera also makes a the point that much of the taxpayer money propping up AIG is immediately passed on to other financial institutions. One of the leading recipients is Goldman Sachs which is sitting on a cool $100 BILLION in cash as it collects your tax dollars through AIG.

Seems outrageous. Actually it stinks to high heaven when you remember that Goldman is the former employer of Clinton’s Treasury Secretary Rubin and Bush’s last Treasury Secretary Paulson. (Not to mention Chris Dodd’s colleague John Corzine.)

Finally, my own snarky little contribution. Several of these stories note that people who created the mess at AIG are no longer on the payroll. Joseph J. Cassano, for instance, no longer heads the financial products division that wrote and traded all those toxic credit default swaps. BTW, anybody want to guess whose campaigns Mr. Cassano contributed to?

If you said Chris Dodd and Barak Obama, you are a winner.

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