In 2008 the entire world was on the brink of collapse. The financial markets were frozen. No one was lending. This was not caused by the average middle class Americans or for that matter any average citizens of the world. It was caused by the titans of finance, the people at the top of the entire world’s financial structure. They created a house of cards that collapsed.
These are the characters that created unregulated financial structures called Credit Default Swaps that in effect allowed them to insure investments with no collateral backing the insurance. With many investors buying these swaps to make their investments “risk free” when the real investment collapse (mortgage paper, high risk bonds, etc), there was no money to make the failed investments whole.
AIG was one of the firms participating in this legal “fraud”. When investors came a calling, AIG was left without the assets to make them whole. There was no entity available to lend them money. Their only choice was bankruptcy.
They came begging to the government, “we the people”, and “we the people” made them whole. The government invested in AIG and saved the company and its shareholders. The government recently sold enough shares of AIG and has made a profit in the deal. Commercials are starting to appear on TV where AIG is thanking America for “saving” them and attempting to rebuild a positive image.
At the same time however, AIG is considering suing the government, “we the people”, alleging the terms of the deal were unfair. Ex-CEO Greenberg called the Fed a ‘loan shark"’.
Could this potential lawsuit be an attempt to recover the profits made by the government for saving the company because of the disdain the financial sector has for government until they are the last resort? Is this the classic case of privatized profits and socialized losses? It really does not matter. That the titans of finance continue to live in an alternate state of reality where they are unable to see the optics and destructive results of their actions will be their ultimate undoing.
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This attitude of corporate entitlement is what got us into the mess in the first place. The government bailed them out. The governement did not bail out those defrauded in the process. What kind of “we the people” government is this? The right wing tries to tell us we need more of this instead of less and that the wealthiest need more breaks, not less.