Free money from the government, no strings attached
Glad to see that the Senate and financial journalists at the Wall Street Journal and Fortune have picked up on the questions some of us out here in the blogosphere raised about where the money being channeled through AIG was ending up. The list Fortune published of the 15 top recipients included 10 foreign banks. One, the ...
Glad to see that the Senate and financial journalists at the Wall Street Journal and Fortune have picked up on the questions some of us out here in the blogosphere raised about where the money being channeled through AIG was ending up. The list Fortune published of the 15 top recipients included 10 foreign banks. One, the Royal Bank of Scotland, is now pretty much owned by the U.K. government...so Gordon Brown can complain as much as he wants about the DVDs Obama gave him, this one was worth billions. Say "thank you" Gordon. Of course, I'm not sure whether we should be more pissed off about that or about the five U.S. banks on the list (and let's remember this was only a partial list...the Journal had a list of 25) all of which got no-strings money from the government on this deal even as the government was demanding tough conditions on the rest of the bailouts they were devising. In other words, they knew they were snookering their own government and they went along with it. And perhaps worse, the government knew and let it happen. What could have been the alternative? If AIG had gone belly up these counterparties would have gotten a few pennies on each dollar that was owed to them...if they were lucky. So, perhaps a deal could have been struck in everyone's interest in which they got more than that but substantially less than the 100 cents on the dollar they ended up with.
Glad to see that the Senate and financial journalists at the Wall Street Journal and Fortune have picked up on the questions some of us out here in the blogosphere raised about where the money being channeled through AIG was ending up. The list Fortune published of the 15 top recipients included 10 foreign banks. One, the Royal Bank of Scotland, is now pretty much owned by the U.K. government…so Gordon Brown can complain as much as he wants about the DVDs Obama gave him, this one was worth billions. Say "thank you" Gordon. Of course, I’m not sure whether we should be more pissed off about that or about the five U.S. banks on the list (and let’s remember this was only a partial list…the Journal had a list of 25) all of which got no-strings money from the government on this deal even as the government was demanding tough conditions on the rest of the bailouts they were devising. In other words, they knew they were snookering their own government and they went along with it. And perhaps worse, the government knew and let it happen. What could have been the alternative? If AIG had gone belly up these counterparties would have gotten a few pennies on each dollar that was owed to them…if they were lucky. So, perhaps a deal could have been struck in everyone’s interest in which they got more than that but substantially less than the 100 cents on the dollar they ended up with.
All that said, my question of the day on all this is: how many people and other precious resources were siphoned away from performing fundamental market oversight during the Bush years in order to comb through bank records to find terrorist fund transfers? Seems in retrospect that financial oversight failure has done vastly more damage to the United States than all the terrorists in history could ever muster. It reminds me of invading Iraq to quash a nonexistent WMD threat when next door, Syria and Iran both had programs percolating along that we ignored (it took the Israelis to point out the Syrian program to us even though they were utilizing a North Korean design that presumably we were rather familiar with and whose keepers we should have been watching pretty closely.) In other words: eye meet ball. Now stay there.
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