Stop Calling It the $85 Billion Bailout!

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It’s more than that already. Edward Liddy, chairman and CEO of AIG:

“I think it was a wise decision on the part of the Federal Reserve and Treasury to throw that lifeline to A.I.G. so that we could emerge from this crisis in an orderly way,” Mr. Liddy told “The NewsHour With Jim Lehrer” on PBS Wednesday night.

Would anyone say it was unwise for someone to give them free money so they can continue to carry on and party on? Isn’t that like asking a car thief if he would like unimpeded access to a parking lot full of unlocked Mercedes and BMW cars?

Liddy refers to the government’s redistribution package – from Mom and Pop to Wall Street millionaires – as “lubricating the markets.” Isn’t it great to see millionaire Wall Street executives being bailed out and happily keeping their jobs? Shortly after the AIG bailout was announced, executives and insurance representatives from AIG subsidiaries partied down at a swank resort in Southern California.

Here’s the tab: $139,375.30 for rooms. $147, 301.71 for “banquets.” $1,488 for the Vogue Salon, which features manicures, pedicures and hairstyling. $6,939.09 on golf. $2,949 for tips. $5,016.32 at the Stonehill Tavern. $3,064.71 for in-room dining and the lobby lounge. That’s part of the $440,000 bill from a recent weekend bash that an American International Group Inc. subsidiary threw for its top performers at the posh St. Regis resort, on a bluff overlooking the Pacific Ocean. Sounds like they had fun.

Their timing was exquisite. The AIG folks and their guests hit the spa just days after the insurance behemoth grabbed an $85 billion bailout package from U.S. taxpayers. They needed it because AIG piled up net losses of $18.5 billion in the past three quarters on write-downs tied to the collapse of the U.S. subprime mortgage market.

So now, Liddy is telling the media that the company needs more money. And this is in addition to the fact that AIG has already exceeded the initial $85 billion credit line. This is like renovating your entire house just before you throw gasoline and matches at it. But at least Paulson’s chums will have had a good run before retiring to their stockpile of penthouses and beach homes.

Read this Bloomberg story for some gruesome details of how AIG’s marauding executives are lined up at the trough.

5:09 am on October 25, 2008
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