Thursday, September 18, 2008

Wondering About Aiding AIG

Watching Wall Street has not been pleasant for anyone the last few days ... but if you run the State of New York, you have a real case of agida. The chickens of your policies for the last 30 years have finally come home to roost: You've driven so much business off Main Street that you now depend on Wall Street to finance your operations.

A fiscal crisis comes along and what do you do? You "bend the rules." At least that's what this story sounds like. "State to aid AIG"
American International Group, the world's largest insurance group, is getting help from New York state by letting the troubled firm use $20 billion of its subsidiary assets to stay in business. . . .

Paterson stressed that the state is not bailing out AIG and "not exposing taxpayer money" for the transaction. He said the state Insurance Department is agreeing to let AIG access some of it assets so it can get a loan to keep operating.
You have to wonder, if the Insurance Department is making some kind of "exception" to help AIG, what is going to be unprotected by the rule that is being bent? You also have to wonder if "exposure of taxpayer money" can be far behind.

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