George S. May Business Blog

AIG recieves $30 billion more – Where does it end?

“CHARLOTTE, N.C. (AP) – Embattled insurer American International Group Inc. will receive up to $30 billion in additional federal assistance as part of a revamped government bailout plan that will see the Federal Reserve take stakes in two international units, a person familiar with the matter says.

The new deal calls for the Treasury and the Federal Reserve to provide fresh capital from the government’s Troubled Assets Relief Program, or TARP, the source said, asking not to be named because the discussions are still ongoing.

The new funding marks the fourth government rescue of AIG since September. It is intended to further support the New York-based insurer, which is expected to announce $60 billion in quarterly losses early Monday. ”

Why don’t we just call it what it is? AIG is a government agency. AIG is a Socialist government agency, until otherwise noted.

And while we are led to believe that this is an interim program, that AIG is working en route to being not owned by the government, I ask: Where’s the exit strategy? You can only call something an interim program when there are solid plans for change. Who is to say that AIG won’t comeback after this $30 billion is spent and ask for more? Oh wait, I apologize, they have already openly admitted to the likelihood that they’ll be back with their hands extended.

Furthermore, where the heck is Geithner? Seriously. He comes out with one, half-cheeked, ambiguous plan that does nothing except spread worry on Wall Street and cause the market to plummet and then we never hear from him again. Where was Geithner post-Citi and where is Geithner now? $30 billion of government money and not even a chirp from our Treasury Secretary, Timothy Geithner? Wall Street needs clarity, even if it is bad news.

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