AIG wants to sue the US....for the bailout
- Thread starter Chris0nllyn
- Start date
itsbob
I bowl overhand
It sounds, again, like Obama overstepped his bounds, and seems to me this is a legitimate argument.
They did something similar to the car companies didn't they? Where stocks weren't honored, and contracts were nullified?
I would suggest they know this, and why they are trying to convince them NOT to pursue legal action.
Chris0nllyn
Well-Known Member
We should have NEVER bailed them out.
Our freaking tax money went to pay for their bad business practices, and huge bonuses.
Now they want to sue because it wasn't generous enough?
itsbob
I bowl overhand
Doesn't matter how generous Obama was, if he extorted them in taking the money it was wrong.
Chris0nllyn
Well-Known Member
Judging by the article, it seems they are suing because they need to make back money they lost during the deal.
:shrug:
AIG was bailed out in Sept 2008.
In Sept 2008, Mr. Bush (43) was President. Mr. Paulsen was Treasury Secretary. Mr. Bernanke was Chairman of the Federal Reserve.
In Sept 2008, Mr Obama was a Senator from Illinois and the Democratic Nominee for President. The election was not held for almost 2 months after the AIG decision and the inaugural was not held until more than 4 months later. But you contend that Mr. Obama, "overstepped his bounds"?
Mr. Bush, Mr. Paulsen and Mr. Bernanke made the only realistic choice that was available to them. The choice was terrible...but correct on the grounds of avoiding Great Depression 2.0. Even hindsight shows that decsision to be regrettable but correct.
itsbob
I bowl overhand
There is Absolutely NO way to say that. In fact I'd say just the opposite would be true. Let them fail, let them file bankruptcy and all this would be behind us already. The economy possibly recovered already.
Doesn't matter who "made the deal" illegal is illegal, and if it wasn't illegal the current Admin wouldn't be begging them NOT to go to court. If they had no legal standing why would they care if they sued or not?
Beta84
They're out to get us
For the sake of your argument, let's say the deal was illegal. The deal, as stated above, was made by Bush and his cronies. The current administration, who you say is begging AIG not to go to court, is Obama and his confederates. Why would the current President not want AIG to sue the federal government over a deal that's either legal, or illegal but hatched by Bush? Maybe because regardless of who hatched it, it's the current tax payers that would lose money and be responsible for paying AIG, should they win in court? How can that possibly be good news for Obama, his administration, or the country? If what you're saying is true, any reasonable citizen should be happy that Obama is trying to spare this country from a law suit that could cost additional millions or billions, like we have any money to spare.
Should Obama throw up his hands and say "I don't care if it's illegal, Bush made it happen so go ahead and sue us, what do I care?" How does that make any sense? Or should Obama somehow repeal the already agreed upon bailout? I don't see how that could happen either. Sometimes it seems like you guys just want to nail him because you don't like him instead of taking a second to think about his options.
itsbob
I bowl overhand
Obama isn't concerned about us so much as he is worried about the Pandora's Box being opened if AIG sues and wins..
Obama did almost the identical deals with the car companies.. If AIG takes the lead, sues and wins, you can bet Chrysler and GM will follow..
Granted it will cost the taxpayers Billions, but if it was wrong it was wrong, let the courts decide. Maybe prevent the same sort of crap happening again in the future.
philibusters
Active Member
I have trying to find something that goes into a little bit more detail to get a feel for the basic legal case and I cannot really find anything. Why do you think its a legitimate argument. By instinct is that AIG willing took the money. The mere fact that there was almost a 100% chance they would have gone bankrupt (and the shareholders would have been left with nothing) without the bailout does not mean the gov't exhorted them.
Since it sounds like Obama overstepped his boundaries and this is a legitimate argument, explain to me what is the argument. I looked through a couple pages of google search results without really getting any feel for the legal case.
itsbob
I bowl overhand
Well, that would be my point. If there was no legal case, why would they be concerned? Why would they be meeting with them pleading their case for them NOT to go to court?
Here again, a JUDGE and court decides what, if anything, stock holders get on the other side of a bankruptcy. Working the details out with shareholders, and bondholders they can actually make money coming out the other side of a bankruptcy and continue to receive dividends.
I don't believe a court made the determination of what the stock/share holders were going to get/ not get as they circumvented bankruptcy law and the stock/shareholders weren't represented. I think this is where the issue lies. Decisions were unilateral and made by the Executive Branch of the gov't without representation for the stock/bond holders.
philibusters
Active Member
Then AIG should have done bankruptcy rather than accept the bailout money.
I don't know the details or the specifics, so I am guessing a little bit, but impression is that the AIG board met and voted to accept the bailout money. There was probably some pressure by their creditors to accept the bailout (the creditors would get paid in full if the bailout money was accepted, whereas they would receive less than a dollar for dollar payment if AIG went into bankruptcy) and possibly their stock holders too, but I don't think the gov't strong armed AIG into voting to accept the deal.
I don't know the details or the specifics, so I am guessing a little bit, but impression is that the AIG board met and voted to accept the bailout money. There was probably some pressure by their creditors to accept the bailout (the creditors would get paid in full if the bailout money was accepted, whereas they would receive less than a dollar for dollar payment if AIG went into bankruptcy) and possibly their stock holders too, but I don't think the gov't strong armed AIG into voting to accept the deal.
itsboob,wasn't Obama ,it was Bush.They could have said no,when you buy a car or a house you might not like the terms ,you can walk away,well so can they.Move on.
mamatutu
mama to two
Hey, Blue! Why are you worried about what Bush did, or Buchanan, Garfield, or any other prez, for that matter? Obama's agenda is to change our country as we have known it for the last couple centuries. He is part of the New World Order. I am sorry you are blind, but we will take care of you, if we can. And, please, work on your sentence structure. I thought it was Lance at first glance.
Tilted
..
There's a decision that was handed down in one of these Starr / AIG cases a couple of months ago that lays out the legal / ethical argument fairly well. Google Starr v FRBNY and you'll probably find it.
There are a number of issues and it's a little complicated (with more multiple moving parts), but there is a strain of legitimate legal reasoning underlying the actions. I'd say there's an even stronger strain of ethical reasoning underlying them - i.e., even if the government's actions didn't touch the right technical bars to make it illegal (while possibly being injurious to AIG shareholders), those actions were wrong even with particular regard to AIG shareholders. The problem, as I see it, for Starr in making this claim - both the problem when thinking about it legally and when thinking about it ethically - is the question of what was the damage done to shareholders? Accepting arguendo that the government's behavior was illegal or unethical, what would have been their fate without it and how does that compare to their fate with it?
I may get a chance later to lay out the the legal argument a bit more thoroughly, but for now I'll just mention three basic notions that, among other things, are in play: (1) The Board of AIG (as it existed in late 2008) is not the same as the shareholders of AIG or even AIG itself, and it didn't necessarily act in the latter two's best interests in agreeing to allow the government to take over AIG - it may have acted in its own best interests and to their detriment. (2) Once the government took control of AIG, it had a fiduciary responsibility to AIG and its shareholders. The government as sovereign / regulator is not necessarily the same as the government as owner / controller of an otherwise privately owned business. (3) The government used AIG as a vehicle through which it could implement policy meant to help the nation (to include most all of its members) and save the nation's economy, not in a way meant to help / save AIG - rather, in a way that further injured AIG. That's understandable and as the government it should be more concerned with the fate of the nation than with AIG itself. But see (2), that dynamic makes the situation (and the government's use of AIG) legally and ethically iffy.
EDIT: Considering that I took the time to get into the issue a bit (which I hadn't intended to do until I started typing), it was silly of me to suggest you use google to find the opinion yourself when it would only take me a minute to do so: http://newsandinsight.thomsonreuter.../2013/01_-_January/starrvfrbny--mtdruling.pdf
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Larry Gude
Strung Out
Isn't there a principle that says, essentially, if a given law isn't readily and easily understood by the people then, it's not a good law?
I don't know you personally and what training and education you have but, suffice it to say, everyone on here thinks of you as a well above average person in terms of knowledge and understanding of the topics you comment on, especially the legal opinions. I would suggest everyone also thinks of you as rational and reasonable in your thoughts and most, if not all of us would say "If Tilted thinks this or that is a good idea, I'd probably agree." Unless it's about music.
Point being, that in laying out your thoughts on AIG, I think it reads like a chapter straight out of Orwell and in and of itself, not your opinions or thoughts of the events and issues, but, the very existence of such issues and events, are all the evidence needed to come to the conclusion that there is no law. The freak show that is TARP and everything surrounded it, AIG, the auto bailouts, the Stimulus, this new rationalization of the irrational, that we HAD to do this or HAD to do that, man, I mean, ready that;
Tilted
..
I'm sure such a notion exists among a fair number of people and it's one that I would generally agree with.
Please stop. I blush easily and I'm heading out soon and I don't want any cute ladies I may pass in my travels to think I'm enamored to the point of red-facedness with their mere presence. Also, I have very little education and almost no training.
Point being, that in laying out your thoughts on AIG, I think it reads like a chapter straight out of Orwell and in and of itself, not your opinions or thoughts of the events and issues, but, the very existence of such issues and events, are all the evidence needed to come to the conclusion that there is no law. The freak show that is TARP and everything surrounded it, AIG, the auto bailouts, the Stimulus, this new rationalization of the irrational, that we HAD to do this or HAD to do that, man, I mean, ready that;
So that we're clear, those were only my thoughts in the sense that my intention was to refer to some of the notions underlying Starr's legal arguments. I didn't mean to endorse them.
That said, and maybe this goes a little off-direction, one of my core beliefs about government is that once we agree or accede to organization as a society and in so doing empower government in some form to act on behalf of, and with the collective power of, that society, transgressions by that government are of more systemic concern than transgressions by individual members or groups of members within that society. So regardless of the fate of societal members (e.g. AIG, its shareholders), as being deserved or otherwise, I'm usually more viscerally concerned with the behavior of government in regard to that fate and in general. If our government violated the Constitution or our established laws in its handling of the AIG situation, I think it is important that it is punished for that violation (even though I realize that punishing the government means, in effect, punishing society's members - as it is those members that ultimately and collectively control government and use it, foolishly or wisely, negligently or intentionally, to whatever ends it effects). I believe that even if it means particular beneficiaries of that punishment are, reasonably considered, undeserving.
The beauty of the system that our forefathers aspired to is that it sought to constrain and improve the behavior of government more than it sought to constrain and improve the behavior of individual members of society, even if satisfactory performance regarding the former meant lackluster performance regarding the latter. Simply put, the notion of freedom they aspired to - the flavor which defines the American ideal - was one that valued righteousness on the part of government more than government enforced righteousness on the part of members of society. The Universe at large ultimately, more or less, rewards and punishes righteousness on the part of its inhabitants. To the extent that government is needed to fine tune that enforcement in the name of more effective cooperation between some of those inhabitants, it should do so beholden to a Hippocratic Oath of sorts - first do no harm. Government should seek to prevent harm between and among members of society, but only to the extent it can do so without itself doing unjustified harm to those members.
As for the rationalization of TARP and other various bailouts, it's warranted (i.e. not just rationalization for rationalization's sake) depending on what the goal was / should have been. If the goal was / should have been to preserve some semblance of the society (particularly the economic aspect of it) that we had and the prosperity that we had enjoyed, then the actions by our government - or some other similarly substantial actions - were 'needed'. I've little doubt about that. Though many people do doubt that, I think they do so with the benefit of not having had to endure, confront, or accept the fate which they personally - whether they shared significantly in the blame or not - would likely have met had the government not taken the actions it did. We were all saved from a situation that would almost surely have been far worse than what we have collectively endured. It's easy to say that you didn't need someone to violently pull you back from the roadway you were walking into after they did so and you thusly weren't run over by a 5-ton truck. For most people I suspect that their complaints about the government's actions during that time pale in comparison to the complaints they would have voiced in the wake of government inaction. Ignorance is sometimes bliss and, unfortunately, unhealthily emboldening.
The question remains whether that should have been the goal. I for one am a purist when it comes to government, and when it comes to the Universe's ultimate control of our fates - its ultimately unyielding intent to impose righteousness on the behavior of all its inhabitants. That being the case, I think the goal should have been otherwise and, thus, I don't think the government should have done the things that it did. It should have let the delusion crumble under its own weight, it should have let the devastating correction happen. It would have been painful - painful enough that most people, perhaps even purists such as myself (and yourself, as I take you), would have reconsidered their conclusions that inaction was proper. But the storm would have cleaned the air and the ground on which new, hopefully longer lasting, prosperity might be built.
But we've had this conversation about 3 thousand times...
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Larry Gude
Strung Out
Absolutely clear and I apologize if, in any way, it came off as me suggesting you did endorse them. My goal was to illustrate that the very fact that we have this issue, framed and clarified well by you, is defacto evidence of the lunacy we find we have put ourselves in.
Put another way, we're not discussing the relevancy of how many fairies one might fit on the head of a pin and how absurd the concept is to begin with. We have long accepted it matters and are now getting down into the nuts and bolts of how to go about it. We are normalizing distortion and absurdity. We are rationalizing lunacy.
It's very much like the gun debate where one side is saying "Things would be soooo much better if only 19 kids had been murdered before re-loading rather than 20. Or even 18. Call it 17.5?" And the other side, my side, says "What if we had a good guy with a gun who might be able to stop ANY kids from being murdered in the first place?" and we're looked at as the crazy people.
1984
Larry Gude
Strung Out
Far from being a little off direction, that is at core.
Brilliant. I can not give that paragraph greater praise. Outstanding. Damn, I wish I could express myself that well.
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