# Rolling Stones article about what happened at AIG **URL:** \ **Category:** Great Debates\ **Created:** [March 22, 2009, 12:39am UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304 "2009-03-22T00:39:22Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [March 23, 2009, 5:03pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/41 "2009-03-23T17:03:53Z")
> [@Magiver](#): > > I understand where you’re trying to go with this but greed as you’re using the word is in the eye of the beholder. I’m trying to point out that we are all greedy by definition and that this root human condition is normal, healthy and productive. I don’t believe we are all greedy, and results I’ve read in behavioral economics (namely the experiments outlined in the book “Predictably Irrational”[sup]\*[/sup]) seem to suggest this, under normal conditions. I believe that certain setups may breed a culture of greed, and that we, as a society, may tolerate this, if the net benefit to the rest of us is warranted. But it is tolerance, not acceptance, and we reserve the right to change our minds. > [@](#): > > To say that AIG executives do not deserve the bonus’s they got for meeting specific goals (in this case generating over a trillion dollars) because of past corporate sins is a dangerous road to walk down. Perhaps. To suggest that bailing out a company with taxpayer dollars means we have no options open to us but to hand over money as if we were held hostage is _also_ a dangerous road to walk down. > [@](#): > > The current talk is to limit pay for ALL bank executives, regardless of financial condition. That is not the function of government. I agree. I believe making CEO pay less conspicuous and more tightly regulating bank behavior will accomplish this quite naturally. In fact, I wish I remember where I read it, but the author or authors showed that making CEO compensation public caused compensation to skyrocket, rather than to control it, as was expected. And honestly, I’m not sure you can put that genie back in the bottle, anyway. \*[sub]Unfortunately I think the author was largely too overreaching in most of the conclusions he drew for what I suppose was an easily-digestable popularization. Nevertheless, the studies spoke well enough for themselves, and not all conclusions were so sloppy.[/sub] ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [March 23, 2009, 5:44pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/42 "2009-03-23T17:44:24Z")
> [@erislover](#): > > Perhaps. To suggest that bailing out a company with taxpayer dollars means we have no options open to us but to hand over money as if we were held hostage is _also_ a dangerous road to walk down. I think people lose site of the fact that AIG has already been fined close to $2 billion dollars plus the executives getting the bonus have recovered over a trillion dollars so I don’t think it’s fair to say that tax payers have paid the bonus. I’m worried that other companies will lose the people needed in the short term to fix the problem. AIG still needs to recover another 1.7 trillion and if Congress pitchforks this because of public anger then we stand to loose the money poured into AIG. I’m angry too but I want the Cassono’s of the world taken down, not the mess they left behind. I personally have no way of knowing if a million dollar bonus is a lot of money compared to the job involved but I do know that it was calculated by a committee specifically charged with the task. What Congress did by trying to tax it was a publicity stunt at best. > [@erislover](#): > > I agree. I believe making CEO pay less conspicuous and more tightly regulating bank behavior will accomplish this quite naturally. In fact, I wish I remember where I read it, but the author or authors showed that making CEO compensation public caused compensation to skyrocket, rather than to control it, as was expected. And honestly, I’m not sure you can put that genie back in the bottle, anyway. I think we’re in agreement that better oversight is needed in business (auditing standards) as well as better government oversight on insurance standards. The whole problem in this situation was a lack of principle offset to cover risk. That’s where all the profit came from to pay the huge salaries. As people in the business have pointed out, it’s not an exact science. Sometimes your projections make money, sometimes they lose money. However, I personally feel that the housing bubble was guaranteed to happen at some point and the risk was calculable. Bells should have gone off almost from the get-go from both the insurance industry, the accounting firms that audited them, and the government agencies that regulate them. ---
**Author:** ![buttonjockey308](https://avatars.discourse-cdn.com/v4/letter/b/bcef8e/32.png) [@buttonjockey308](https://boards.straightdope.com/u/buttonjockey308)\ **Post date:** [March 23, 2009, 6:06pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/43 "2009-03-23T18:06:35Z")
The cross-section of replies in this thread alone reveals the lack of the single most important element in the entire financial bailout, no, not regulation, but the transparency of the regulation. Do we need more regulation? Yup, but what does regulation mean if only a handful of people understand it and no body sees or know what’s being regulated? It’s not enough to say that the wall streeters used default swaps like the Parimutuel window at Pimlico and through their own desire, nay, outright lust for easy money with very little to no work other than crafting the derivatives and selling them to some sucker managed to start the dominoes a-fallin. Once the truth is uncovered, people need to know what the people who are hired by the people we elect to keep watch on this kind of outright fu@kery are allowing to go on. Failure to regulate CDS are a problem, failing to let Joe Six Pack know that his financial future is resting on this pile of soggy paper is the reason this will never truly be fixed. We will never learn the lessons our fathers and grandfathers taught us because everything in their worlds took FOREVER to get done and we wanna be rich TODAY! Ironically though, the things they built manage to stick around a long time because they were built on something real, as opposed to this mound of papier mache and dreams we call an economy. Imagine your father, a factory worker or your grandfather a plumber striving to build his business or grow in the company just so he could buy a $100,000 car and leave your mother or grandma for a 23 year old stripper. It’s all bullshit. We’ve decided to ignore what we know works and chase after the lies these men tell. It’s way past time to deconstruct this mess and start again. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [March 23, 2009, 6:38pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/44 "2009-03-23T18:38:47Z")
You’re making it sound like everyone at AIG and Lehman brothers were out to pillage the land. This is a case of poor regulation, and a couple of computer-based wonderfucks doing a LOT of damage. I have no idea if Cassano wanted to rape my ass (like Madoff did) but I do know it was ultimately underfunded because the 10,000 year financial scenario was more like a 25 year risk. That should have been easy to calculate soon into the venture. It’s a simple matter of accounting review to identify bad loans made by business A and weigh it against the money backing up the risk from insurance company B. Both businesses were out of control. Enter HUD who is dumping Fanny Mae backed crappy loans on banks supported by the FDIC and you’ve got a complete set of government and private sector assmonkeys creating havoc. ---
**Author:** ![buttonjockey308](https://avatars.discourse-cdn.com/v4/letter/b/bcef8e/32.png) [@buttonjockey308](https://boards.straightdope.com/u/buttonjockey308)\ **Post date:** [March 23, 2009, 8:47pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/45 "2009-03-23T20:47:04Z")
> [@Magiver](#): > > You’re making it sound like everyone at AIG and Lehman brothers were out to pillage the land. This is a case of poor regulation, and a couple of computer-based wonderfucks doing a LOT of damage. I have no idea if Cassano wanted to rape my ass (like Madoff did) but I do know it was ultimately underfunded because the 10,000 year financial scenario was more like a 25 year risk. That should have been easy to calculate soon into the venture. It’s a simple matter of accounting review to identify bad loans made by business A and weigh it against the money backing up the risk from insurance company B. Both businesses were out of control. Enter HUD who is dumping Fanny Mae backed crappy loans on banks supported by the FDIC and you’ve got a complete set of government and private sector assmonkeys creating havoc. It’s not as bad as all that, but it’s a severe case, perhaps the most severe case of unregulated recklessness that Wall Street has ever seen. I doubt Joey had designs on your hindquarters, but he was certianly over-concerned with his own interests. At a million dollars a month, that mutt should have been doling out fiftys and handjobs in the company cafeteria. The only thing we’ve learned here is that there is no once-in-a-lifetime scenario and that any and everything is possible. Sure, it should have been easy to calculate, if someone would have given it a second thought, but like you say, they were and in my opinion still are out of control. All of that underscores my point that not only regulation but transparency is necessary. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [March 23, 2009, 9:15pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/46 "2009-03-23T21:15:02Z")
> [@Magiver](#): > > You’re making it sound like everyone at AIG and Lehman brothers were out to pillage the land. This is a case of poor regulation, and a couple of computer-based wonderfucks doing a LOT of damage. I have no idea if Cassano wanted to rape my ass (like Madoff did) but I do know it was ultimately underfunded because the 10,000 year financial scenario was more like a 25 year risk. That should have been easy to calculate soon into the venture. It’s a simple matter of accounting review to identify bad loans made by business A and weigh it against the money backing up the risk from insurance company B. Both businesses were out of control. Enter HUD who is dumping Fanny Mae backed crappy loans on banks supported by the FDIC and you’ve got a complete set of government and private sector assmonkeys creating havoc. AIG had no CFO for at least 6 months before what they were doing came out. They had no Risk Assessment Officer . Who is responsible for that? The Financial Products division had bosses . What did they do? The margins were 30 to 1 and more. What does it require to figure out that was dangerous? AIG upper management enjoyed great profits and bonuses along with the Financial Products Division. They did not oversee their divisions. They did not do their jobs. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 23, 2009, 10:08pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/47 "2009-03-23T22:08:55Z")
> [@The\_Tao\_s\_Revenge](#): > > Hate to break to you sparky but the internet was established first for the military then as a tool of research and collaboration between universities. > > So guess science \> greed. Just to nitpick, the net was designed originally as a survivable network for defense, but universities were using it long before the military, as far as I can tell. I used it in 1974, when there were a few universities and industries on it. This was before the actual Internet. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 23, 2009, 10:18pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/48 "2009-03-23T22:18:15Z")
> [@GIGObuster](#): > > Bill Gates in favor of “open architecture”? BWA HA HA HA! > > Once IBM started down the road of a published open architecture. Bill Gates could not monopolize his wish to keep things proprietary. Only later was Microsoft forced to accept some openness. > > Really, greed was good for some things, but the internet and good chunk of the software software used today (Linux) was influenced by the progress made from “socialistic” nations like France. Not to mention that some things like the USB were defined by consortia of companies working together, and others were defined by IEEE standards bodies, which are non-profit. I don’t think open means what **Magiver** seems to think it means. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [March 23, 2009, 11:06pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/49 "2009-03-23T23:06:36Z")
> [@Voyager](#): > > Not to mention that some things like the USB were defined by consortia of companies working together, and others were defined by IEEE standards bodies, which are non-profit. > > I don’t think open means what **Magiver** seems to think it means. That’s what I was referring to. My commercial use of computers started with the IBM Display Writer and my first PC was an IBM clone running DOS. Every new piece of software or hardware was an adventure. Today’s computers are a marvel of standardization. When I said the “likes of Bill Gates” I wasn’t laying it all at his feet. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [March 23, 2009, 11:52pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/50 "2009-03-23T23:52:39Z")
> [@Voyager](#): > > .. in 1974, when there were a few universities and industries on it. This was before the actual Internet. You were downloading porn in 1974? Dude! But, from where? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 24, 2009, 1:25am UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/51 "2009-03-24T01:25:49Z")
> [@elucidator](#): > > You were downloading porn in 1974? Dude! But, from where? Not in '74, but there was this interesting instructional lesson on PLATO in 1977 …😛 (Smiley chosen for appropriateness to the subject of the lesson.) ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 24, 2009, 1:30am UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/52 "2009-03-24T01:30:53Z")
> [@Magiver](#): > > That’s what I was referring to. My commercial use of computers started with the IBM Display Writer and my first PC was an IBM clone running DOS. Every new piece of software or hardware was an adventure. > > Today’s computers are a marvel of standardization. When I said the “likes of Bill Gates” I wasn’t laying it all at his feet. Open but imposed standardization occurs when there is a de facto monopoly (even if not a legal one.) Examples are IBM mainframes, the original IBM PC, and yes Windows. Whether or not others are allowed in is a business decision. I’m not sure Gates is any less greedy than Jobs. But an awful lot of standardization is done by standards bodies or pre-competitive consortia. In IEEE standards, you specifically represent yourself and not your company, though no one forgets where you come from. Anyhow, an awful lot of the good stuff you mention comes from places where greed and profit play no role. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [March 25, 2009, 9:32pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/53 "2009-03-25T21:32:09Z")
> [@Voyager](#): > > Open but imposed standardization occurs when there is a de facto monopoly (even if not a legal one.) Examples are IBM mainframes, the original IBM PC, and yes Windows. Whether or not others are allowed in is a business decision. I’m not sure Gates is any less greedy than Jobs. But an awful lot of standardization is done by standards bodies or pre-competitive consortia. In IEEE standards, you specifically represent yourself and not your company, though no one forgets where you come from. Anyhow, an awful lot of the good stuff you mention comes from places where greed and profit play no role. You can’t standardize something unless it’s exists. Edison didn’t invent the lightbulb, he invented the industry behind it (yes Westinghouse won out with A/C). The desire to succeed (and reap the rewards) has driven the bulk of technological advancement. ---
**Author:** ![Love\_Rhombus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/love_rhombus/32/10694_2.png) [@Love\_Rhombus](https://boards.straightdope.com/u/Love_Rhombus)\ **Post date:** [March 26, 2009, 5:52am UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/54 "2009-03-26T05:52:50Z")
> [@buttonjockey308](#): > > We will never learn the lessons our fathers and grandfathers taught us because everything in their worlds took FOREVER to get done and we wanna be rich TODAY! Ironically though, the things they built manage to stick around a long time because they were built on something real, as opposed to this mound of papier mache and dreams we call an economy. > > Imagine your father, a factory worker or your grandfather a plumber striving to build his business or grow in the company just so he could buy a $100,000 car and leave your mother or grandma for a 23 year old stripper. It’s all bullshit. We’ve decided to ignore what we know works and chase after the lies these men tell. It’s way past time to deconstruct this mess and start again. Or your grandfather who was part of the cause for the Great Depression. Or who ran booze for Capone. Spare us the Golden Age BS. Greed’s been around as long as man has, and it will always be thus. You want to change things? Make sure it doesn’t happen again? Then you’re gonna have to change _people_, and that is pretty close to impossible. Only solution I can think of is to somehow make sure the gains of acting in a way that benefits people outweighs the gains from acting like financial pirates. Sure, you could depend on virtue or morality guiding them, but that’s not something I’d want to bet my life savings on. Would you? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [March 26, 2009, 3:32pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/55 "2009-03-26T15:32:44Z")
> [@Magiver](#): > > The person you’re referring too is [Joseph Cassano](http://en.wikipedia.org/wiki/Joseph_Cassano) and he is responsible for the lions share of the mess. He got $349 million and the consulting contract was terminated in Sept of 2008 after Congressional inquiries (hey they did something right). > > I would add that he is under investigation. I would add he moved to London. ---
**Author:** ![buttonjockey308](https://avatars.discourse-cdn.com/v4/letter/b/bcef8e/32.png) [@buttonjockey308](https://boards.straightdope.com/u/buttonjockey308)\ **Post date:** [March 26, 2009, 5:11pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/56 "2009-03-26T17:11:08Z")
> [@Love\_Rhombus](#): > > Or your grandfather who was part of the cause for the Great Depression. Or who ran booze for Capone. Spare us the Golden Age BS. Greed’s been around as long as man has, and it will always be thus. > > You want to change things? Make sure it doesn’t happen again? Then you’re gonna have to change _people_, and that is pretty close to impossible. Only solution I can think of is to somehow make sure the gains of acting in a way that benefits people outweighs the gains from acting like financial pirates. Sure, you could depend on virtue or morality guiding them, but that’s not something I’d want to bet my life savings on. Would you? There’s a difference between golden age bullshit and timeless principles that ought to guide these malcontents. Because the morality and principles are defunct in the minds and hearts of these greedy shits, then must come the regulation that needs ultimately to tie them down, restrict what they can do and how they can do it and through that regulation create a stable, gradual growth instead of the rocketship rise followed by the meteoric fall ad nauseum. ---
**Author:** ![ShibbOleth](https://avatars.discourse-cdn.com/v4/letter/s/848f3c/32.png) [@ShibbOleth](https://boards.straightdope.com/u/ShibbOleth)\ **Post date:** [March 26, 2009, 5:23pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/57 "2009-03-26T17:23:54Z")
> [@Gozu](#): > > Now I have no clue as to the reputability of **RS** magazine am hoping that I am wrong. I hope that someone will post here and assure me that the article is just an inflammatory piece that grossly exaggerates what happened and that I shouldn’t feel as angry as I do, even after waiting a couple of days before posting this. I’m hardly a fan of AIG, but Mike Taibbi has not exactly had a reputation for pristine journalism. He seems to be following somewhat in Hunter S. Thompson’s footsteps. Doesn’t mean that the conclusions of the article are wrong. > [@](#): > > Late last week I was in Santa Maria, California, covering the Michael Jackson trial for a magazine, when I got an email from Press editor Jeff Koyen: > > The shit has hit the fan. Going on NY1 tonight to respond to Congressman Weiner’s press release, wherein he urges people to throw our paper out. > > Nice. > > JK. > > My first thought was—Why? I’d been on the road, hadn’t had a chance to look at the new issue online, so I could only imagine. But clearly it must have been something terrible, if a goddamn congressman was making noise about it in public. > > I called Jeff. We exchanged pleasantries. He had just come back from the NY1 interview. I asked him about his pet fish, his vacation plans. It was about four minutes into the phone call before I realized the fuss was over my column, the one about the pope, which I had written in the waning hours of a Vicodin haze the previous Saturday morning. > > “You’re kidding,” I said, laughing. > > “No, I’m definitely not kidding,” he said. He wasn’t laughing. “It was linked on Matt Drudge this morning—something about it being an outrage. Chuck Schumer said something about how it was the most appalling thing he’d seen in 30 years.” > > “That’s hilarious!” I said, still not getting it. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [March 26, 2009, 5:55pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/58 "2009-03-26T17:55:27Z")
Coulda had a tooth ache, ya know? There are legitimate uses for pain killers. Killing pain, for instance. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [March 26, 2009, 6:40pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/59 "2009-03-26T18:40:51Z")
> [@gonzomax](#): > > I would add he moved to London. Brits want a piece of him too. He’s a popular guy. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [March 27, 2009, 2:19pm UTC](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304/60 "2009-03-27T14:19:44Z")
> [@Magiver](#): > > Brits want a piece of him too. He’s a popular guy. I am sure he has a few houses around the world. He is outside our jurisdiction, but if he senses a pending lynch mob ,he may be hard to find. [Previous page](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304.md?page=2) [Next page](https://boards.straightdope.com/t/rolling-stones-article-about-what-happened-at-aig/490304.md?page=4)