A final chapter ended on Tuesday. The U.S. Treasury Department announced that it had sold all of its remaining shares in American International Group, closing the government’s massive 2008 bailout of the troubled insurance company. AIG, which became a symbol for risky and excessive betting by the titans of Big Finance, nearly collapsed during the financial crisis. Congress controversially stepped in, and the federal government eventually pumped $182 billion into AIG to keep the company afloat. “Today warrants a celebration like no other in AIG’s history and places well in the past a crisis none of us will ever forget,” AIG Chief Executive Robert Benmosche wrote to his staff.
Now that the company is being restored to full private ownership, the government is touting a $22.7 billion profit off the investment.
But even though AIG is on solid footing, many ordinary Americans are still struggling, and even years later, wonder where their bailout is. John Coleman, a professor of economics at Duke’s Fuqua School of Business, told msnbc.com that there’s certainly a “sense that the government cannot bailout everybody. They’ve allocated whatever resources it has–the lion’s share–to the financial sector, and many [ordinary] people meanwhile have been struggling for quite some time.”
Coleman, who served as an economist on the Federal Reserve System’s Board of Governors, said that while the government made money from the AIG investment, it’s not the case with other bailouts. He warned that a bailout “sets a bad precedent going forward” and “lays the seed for [future] financial crisis.” Continued bonuses for AIG execs have remained a sore point. “It really stuck in the public’s craw that trillions of dollars of financial support were being provided to the commanding heights of the American financial system, and those guys were still paying themselves huge bonuses,” Jim Millstein, a former Treasury chief restructuring officer, told Bloomberg. “I have real sympathy with the public in this regard.”Recommended
