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When do we draw the limit on providing cash to AIG?
AIG just got another $125 billion and changed the terms on what was left of the original 485 billion. How much oversight is there by our representatives on what they do with the money? Can we/are we ensuring that they don't go on executive retreats as they did after the first installment? Apparently, there was a freeze on executive compensation and limits on severance pay. Is that enough?
Answers
2183 points
ChaosNantuko answered one year ago …
The thing about AIG (this also applies to Fannie and Freddie) is the company provides a critical service. However expensive it becomes, it would create large problems if the company went bankrupt. The company is economic infastructure. If an important bridge needed fixing, we would spend as much as required in fixing it, because its necessary infrastructure. Similarly, now that this company - an integral piece of economic infrastructure - is facing insolvency, it must be saved, regardless of the cost. As for executive retreats/compensation/limits on severance pay, while those are things that are extremely relevant from an ethics and doing whats right standpoint, i don't think they change the overall economics of the situation (even though i do believe those things are a bit over the top).
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