Fireworks Over the AIG Bailout and Cover-up!
By Greg Hunter’s USAWatchdog.com
U.S. lawmakers in the House of Representative skewered Treasury Secretary Timothy Geithner in a hearing over the $180 billion bailout of insurance giant AIG. Geithner’s credibility was repeatedly questioned by both Democrats and Republicans over the Treasury Secretary’s claim of complete ignorance of the Federal Reserve’s efforts to cover-up details of the bailout. At the heart of the criticism was AIG’s decision to keep secret $62 billion that was paid directly to banks to keep them from taking a loss. Banks, such as Goldman Sachs, were paid 100 cents on the dollar, while other financial players were asked to take what is called a “haircut” and paid pennies on the dollar. Listen to Representative Stephen Lynch rail on Secretary Geithner over the bad deal taxpayers got:
Geithner took exception to the criticism. He held his ground by saying he and others did what they thought was right. Geithner said the decision to bailout AIG was “the best of a terrible set of choices … There was a basic calamitous breakdown in the fabric of our system.”
Geithner’s predecessor at Treasury, Hank Paulson, fared a little better in the hearing. Paulson contends that saving AIG was a Fed operation, and he had nothing to do with it. Paulson did admit that at least some of the money for the bailout of AIG came from the printing press. Listen to Paulson’s testimony closely as he is pressed by Representative John Tierney.
There will be more to come on the AIG bailout. In the meantime, look at the pattern of secrecy that has been happening since the financial crisis started. The Federal Reserve is involved in secret bailouts of the banks, both domestic and foreign. The details of the shotgun marriage of Bank of America and Merrill Lynch were also hidden from the public. AIG is just another in a string of secrets kept from the taxpayer. Let’s hope the taxpayer gets transparency.
What happened to a free society!
Compounding the financial market corruption concerning AIG, allowing financial advisors of trusts and pension funds to purchase AIG stock after disclosure of its melt down was publicized is nothing short of demonstrable negligence, and financial audactiy cultivated by a market with little or no self regulation, the failure of FINRA to provide proper oversight, and allow captive plan participants and beneficiaries as designated losers is outrageous.
Let’s see if I can make this simple so even I get it.
Timothy Geithner conspires to conceal an act such that the coverup likely rises to obstruction of justice at a minimum. His defense is interesting, “If we didn’t do it and deny it; the world as we knew it would have ended.”
Kinda like if the cops in the OJ murder case admitted, “If we didn’t tamper with the evidence OJ might have got away with murder.”
Was it Mark Twain who said, “I’m never sure if we are governed by really smart people who are just putting us on or complete idiots.”
AIG, Goldman, the banks and Insurance companies need to be broken up into small mainstreet sized busineses so this will not repeat.
I would like to see my neighbors own and run these companies in smaller entities not work for these giant pigs.
I have heard that the secrecy around AIG relates to their real owners, a three letter entity of the US. Play with the letters and see what you come up with.