Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Tuesday, September 24, 2013

AIG CEO Robert Benmosche: 'Too Big To Fail Has Been Solved'

Americans shouldn’t be worried about the nation’s biggest financial institutions sinking the economy any more, according to Robert Benmosche, the CEO of bailed-out insurance giant AIG.

“I believe 'too big to fail' has been solved,” Benmosche told the Wall Street Journal in a wide-ranging interview published Friday. He said that's because regulators and the financial firms themselves have put controls in place to prevent bankers and traders from taking the same types of risks they took in the lead-up to the financial crisis.

Despite Benmosche’s confidence, a variety of factors indicate that the problem isn’t over yet. The country's largest banks are bigger than they were before the crisis. Some senators, including Sen. Elizabeth Warren (D-Mass.), are so concerned that banks are still receiving government subsidies because of the perception that the government won’t let them fail that they're urging the Treasury Department to study the issue, according to Bloomberg.

Even Treasury Secretary Jack Lew acknowledged in July that the belief remains prevalent when he said, "If we get to the end of this year and we cannot, with an honest, straight face, say that we have ended too-big-to-fail, we are going to have to look at other options.”

Benmosche’s comments are interesting given that his firm was one of the major beneficiaries of the "too big to fail" mentality during the crisis. The government bailed out AIG to the tune of $182 billion at the height of the crash in September 2008, as deteriorating mortgage-backed securities threatened to take the firm down, and the economy with it.

But Benmosche wasn’t heading AIG during the bailout, and under his leadership the company has since paid back taxpayers' money. For his troubles, Benmosche got a 24 percent pay boost, pushing his take to $13 million this year, according to a separate Bloomberg report.

Original Article
Source: huffingtonpost.com
Author: --

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