IN OTHER WORDS
After four bailouts totalling some $170 billion, the AIG has finally answered some of the questions about where the money went. Unfortunately, the answers have only succeeded in raising many more questions. On Saturday, the word came out that AIG planned to pay $165 million in bonuses to executives and employees in the very division that caused the problems that led to the federal bailouts. Obama was right to acknowledge his outrage, when he vowed to try to stop the payments.
Obama’s top economic adviser, Lawrence Summers, however, said that legally they could do nothing to stop the bonuses. Taxpayers also need to be told the precise nature of the banks’ dealings with AIG. Appearing on “60 Minutes” on Sunday, Ben Bernanke, the Federal Reserve chairman, described AIG as a company “that made all kinds of unconscionable bets.” Well, on the other side of those bets are the banks that received the bailout money. Is it possible that both sides are trying to play an unseemly game to their own advantage?
Congress must investigate, and the new disclosures give them enough to get started. Untangling all the entanglements is not only essential to understanding how the system became so broken, but also to restoring faith that government is up to the task of fixing it. — International Herald Tribune