Wednesday, May 23 , 2018, 12:48 pm | Overcast 63º


Jim Hightower: Wall Street Arrogance Meets Washington Meekness

There are amoebas with more backbone than this when it comes to blocking unethical behavior

Citigroup, once the world’s largest financial conglomerate, has fallen so far down that you can buy a share of its stock today for less than it costs to use one of its ATM machines.

Last week, however, Citi caused investors’ hearts to go pitter-patter with joy when it loudly trumpeted that it had operated at a profit in January and February. It just goes to show you what enterprising Wall Street financiers can achieve through hard work, creativity, perseverance — and about $45 billion in taxpayer bailout funds. Think how much larger the profit could’ve been if only taxpayers had done more!

Jim Hightower
Jim Hightower

Well, for that, look to American Insurance Group. AIG, the global insurance colossus, is the reigning King of Bailout Nation, having pocketed four bailouts in the past six months, totaling $170 billion.

This was necessary, we’re told, because the insurer’s cocky, unrestrained “financial products” division provided trillions of dollars worth of exotic insurance policies to cover even more exotic investments being made by big banking houses. AIG’s assumption in writing these policies was that there’d be few if any claims made on them. Whoops. Last year, as banks began crashing, the claims started pouring into AIG, which didn’t have the money to pay them off.

The insurer instantly became the poster boy of Wall Street’s “Too Big to Fail” movement, and Washington started shoveling on the cash. Where are our billions going? That’s “proprietary information,” AIG execs told Congress, the media and taxpayers. Excuse me, hotshot, but our bailout money gives the American public 80 percent ownership of your company. As Rep. Carolyn Maloney, D-N.Y.,, told New York Times columnist Gretchen Morgenson: “We are the proprietors now. Taxpayers own the store, and we should be able to see the books.”

Right she is! But both AIG and its federal overseers in the Obama administration are stingy with such details, stiffing the paying public’s obvious right to know. On March 15, We the People were slapped again with AIG arrogance, learning after the fact that top executives were paying about $100 million in bonuses to the very same geniuses in the financial products division who broke the company. Without awarding bonus pay, explained the honchos, some of “the best and brightest talent” might leave. You don’t need a big nose to smell that garbage, do you?

Worse than missing a golden opportunity to say adios to such destructive “talent,” however, was the response by President Obama’s bailout shovel crew. Larry Summers, Obama’s chief economic adviser, trotted out to decry the bonuses as “most outrageous.” But, he wailed, there simply was nothing the White House could do to stop them.

Why? Because, said Summers, the bonus payments were included in the executives’ 2008 contracts, so AIG is contractually obligated to pay them.

Obligated? Ask the United Auto Workers how serious corporations are about honoring employee contracts. Indeed, Washington is demanding that auto companies abrogate wage, health care and pension contracts they signed with workers.

But suddenly we’re to believe that AIG’s executive contracts are so sacred that they trump sanity? So sacrosanct that even the president of the United States must stand meekly by while our public treasury is robbed? Come on, there are amoebas with more backbone than this!

Meanwhile, AIG refuses to divulge the names of any of its “best and brightest,” who’re drawing up to $6.5 million each from us in bonus pay. The company says it must honor “privacy obligations” to these talented ones.

Here’s my question: What kind of people are these? Why has not one of them had the integrity to step forward and say, “You know, I don’t deserve this, so I’ll just move on and make room for others”? Now that might be an employee worth keeping!

Wall Street’s problems don’t stem from a lack of expertise, but a lack of ethics.

Jim Hightower is a national radio commentator, writer, public speaker and author of Swim Against The Current: Even A Dead Fish Can Go With The Flow. Click here for more information, or click here to contact him.

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made through PayPal below, or click here for information on recurring credit-card payments.

Thank you for your vital support.

Become a Supporter

Enter your email
Select your membership level

Payment Information

You are purchasing:

Payment Method

Pay by Credit Card:

Mastercard, Visa, American Express, Discover

Pay with Apple Pay or Google Pay:

Noozhawk partners with Stripe to provide secure invoicing and payments processing.

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.

Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >