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Bernanke wades further into the AIG mess
Tuesday, January 19, 2010
The Associated Press reports that Fed Chief Ben Bernanke is warming up to the whole idea of allowing a little more light to shine on the AIG bailout that was foist upon the country back in late-2008, going so far as to pen this letter to the GAO requesting an investigation.
In the letter, Bernanke states that the government will be paid back in full by September 2013, five years after the bail-out. If I were Congress or the GAO, that's the first piece of data I'd ask to see - how could they possibly pay back everything by then?Federal Reserve Chairman Ben Bernanke took the unusual step Tuesday of asking Congress' investigative arm to conduct a "full review" of the Fed's role in bailing out insurance giant American International Group.
The Fed chief's move is aimed at defusing criticism of the government's $182 billion rescue. The bailout sparked public outrage and demands in Congress for more information, especially after it was revealed that millions in bonuses would go to employees in the AIG division most responsible for the company's need for a bailout.
The House Committee on Oversight and Government Reform has a probe under way that seeks to provide a fuller picture of the AIG bailout. Those lawmakers are especially interested in details involving billions in payments AIG made to Goldman Sachs and other Wall Street firms that did business with the insurer. Some lawmakers want to know why those firms were fully paid and why concessions weren't demanded.
"To provide a comprehensive response to questions that have been raised by members of Congress, the Federal Reserve would welcome a full review by GAO of all aspects of our involvement" in the AIG bailout," Bernanke wrote in a letter to the Government Accountability Office, the investigative arm of Congress.
Isn't AIG just like GM? A big black hole into which the government pours money?
2 comments:
This is just a delay tactic. They will not give them all the info.
The investigation is just PR designed to get the guy reappointed.
The timetable means that once reappointed he plans to kick the printing presses into overdrive, so that the hidden bailout is complete by the time reappointment comes around again. That is, confiscate pensions/savings via the printing press faster, and give the booty to financial firms in a hidden fashion that the public won't notice.
He's learned not to do things that the public can figure out. The thief of the year will steal pensions even faster, when he no longer has to lobby for reappointment. The booty will be distributed in the hidden form of managed interest rate spreads, and centrally planned asset prices. That way well connected financial firms will be able to make leveraged bets, knowing the outcome of the bets in advance.
The public will never figure this out, so they won't be outraged. The public will also never figure out why their standard of living is getting lower, especially retirees. Central bank propaganda will blame greedy corporations, foreign trade, or some other scapegoat for the increased cost of living. The CPI may even be fudged some more, but in a hidden fashion.
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