$70 Bil Piece of Advice

We tax all the others and pass the revenue on to you

Here's a piece of advice that will retrieve $70,000,000,000, the amount of AIG bailout that went to its trading partners. No, really, $70 bil or whatever the amount was that went out AIG's back door to those guys.

Put AIG in an operating liquidating bankruptcy (as I mentioned before) then force their trading partners to return all preferential payments.

That's what you do when a bankrupt pays his brother-in-law the day before he declares bankruptcy and that's what we need to do. Everyone shares the pain, everyone including the trading partners gets their pro rata distribution. It's the same "fair share" concept that we believe in when we pay our taxes.

This plan is available, it works and it's fair. If we don't do it, then one group of creditors (the trading partners) is favored over all other groups of creditors. If you don't think there are mobs of other disadvantaged creditors then you just haven't been paying attention. We have plenty of leverage, even with foreign banks, and nothing to lose. We could even tie it in with the new asset purchase plan.

Still reading? Yes, this might also apply to the bonuses but it's less clear there.

You heard it here first.

Sing it, Danny O'Keefe:

Some got to win
Some got to lose
Good time Charlie's got the blues

(Does anyone remember Danny O'Keefe or this wonderful melancholy song? Raise your hands.)

* * * * *

The new plan is to buy toxic assets from banks. Wait a minute. Wasn't that the old plan? TARP, where we overpaid by 22% for $350 bil of toxic assets?

Yep, sure was. The difference is that this time we're organizing a committee first. Because of our faith in the committee process? Don't be silly. So there will more people to blame. The committee will include the Fed, TreasDept and private sector investors. The latter will be largely indemnified from loss, at your expense. You, however, will generally be indemnified from profit.

These are the same guys who got us into this mess. No one has told us how we're going to be protected from our protectors. The tease (again) is that we will all benefit from the upside. You know, the upside. Where government makes money on its investments. Like, say, Social Security and Medicare. Oh, that's right. They used that money for something else.

This is like buying something on eBay from someone who has all negative feedbacks but you buy anyway because it's cheap.

This just in: There is no upside when you loan someone money to buy a bunch of someone else's bad debt.

We're going to buy a lot of diminished-value (not supposed to say toxic any more, the T word, but that's what we're buying) assets but now... ta da!... the market will set the value of what we're buying. That's the same market that Congress and TimmyG ignored to the tune of the $78 bil overpayment. The market is our friend now. It was our friend back then too, but we threw it over for the hoodlum with the hot car that our moms told us not to hang out with.

Good time Charlie's got the blues

There is no distinctly native criminal class except Congress.
Mark Twain