I found this article in New York Times when I researched about AIG bail out and its consequences, and lack of regulation over non-bank institutions. The article is called “Geithner Seeks Broader Powers Over Financial Firms” . As we may know that companies such as AIG or Lehman Brothers are very low regulated even I would say don’t regulated. These companies can do what they want with money and than as we see can be bailed out by government. But who is taking a price for that? Whose money comes it from? Of course ours, taxpayers.
“(…) Financial crises like those caused by the recklessness of A.I.G. “contains a basic and tragic unfairness – that those who were prudent and responsible in their personal and professional judgments are harmed by the actions of those who were less careful and less prudent.”
People’s hard earn money were lost because someone – kind of smart investors – made wrong choice based on what they will get from it which is money. Why government didn’t stop them when there was time to do it? Now, because of lack of control of these institutions we, honest people, are harm. Executives from AIG got bonuses from bail out for good work. It doesn’t make sense for me to give company money to recover it losses and save economy. However, this company instead used it to pay executives who get it in this bad situation.
“(…) the government been able to assume control of AIG in that fashion there never would have been seven-figure bonuses paid to executives, a total of about $165 million over all, even while the company was receiving some $170 billion in government backing.”
Nevertheless, government got these information and asked AIG executives to return money given from bail out. Who is going to give money back? That is so funny. Government should more control AIG’s actions and use of money. It should send someone inside the company and check how money is going to help to get out from foreseen bankruptcy. “The government now owns almost 80 percent of AIG.” Does it make sense how much it owns? I believe that AIG will not pay back so huge amount. In the future, the ones that will lose will be government and taxpayers. I learned that rich people get more money and hard workers lose their jobs and get poorer.
