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Friday, March 20, 2009

AIG


If it wasn't so tragic, it would be funny.

AIG got hauled before congress this week, to be spanked for using government bail out money to pay fat bonuses to its executives.

During the grandstanding, and early campaigning for re-election, by members of the house, at least one of whom knows a lot about questionable and shady finances, the essence of the story got lost.

Don't blame AIG. Blame the system that allowed AIG to get away with it. Congress is going after the symptom, not the disease.

AIG is like many other banks, financial institutions, and insurance companies. They got too big, too fast. Deregulation allowed abuses. We keep hearing how AIG and the others are "too big to be allowed to fail." Why did they get too big? Congress asleep at the switch.

Keep your eye on the ball and follow the money. Going nuts on AIG, which clearly did wrong, diverts attention from the real problem.