- However, Judge Wheeler had a more sympathetic ear than his peers. He determined that the takeover of A.I.G. was orchestrated to “maximize the benefits to the government and to the taxpaying public.” Contrary to the conventional wisdom — and common sense — he said that goal was troubling. “The government’s unduly harsh treatment of A.I.G. in comparison to other institutions seemingly was misguided and had no legitimate purpose,” he wrote.
Holy shit.
Hooray, I won! I was actually a plaintiff in this case. In the aftermath of the crash, I bought a bit of AIG in a cynical bout of investing, thinking: Well fuck, if they are going to bail these crooks out at my expense, I am going to get my money back by becoming a beneficiary instead of just an involuntary donor. When I got the class action notice and realized that I qualified to sue the US government for helping the bunch of crooks that I took refuge amongst, it was too fucked up a proposal for me to pass up. I'd never sued the US government before, and suing them for helping me with my money seemed a good place to start. Seeing that I won and lost, and that I'll probably lose bigger next time around, I'd say things have worked out just perfectly. Eat that, Damien Hirst.
That's the general idea of a class-action suit. Get as many people hurt by even a little amount as you can to make the total amount of damages as big as you can. In that process you get a hold of people and tell them what you're doing to recruit them into your camp.
This is actually a good ruling as it limits the Fed's abilities to bailout large banks. The main crux of the argument is that the Fed treated AIG (insurance) in a tougher manner than Morgan Stanley (finance), etc. and that, with other things, is illegal (basically, the Fed unjustly favored the banks with the bailout. It demonstrates how the Fed is more beholden to Wall Street). This ruling makes it much riskier to depend on receiving a bailout from the Fed in order to publicly subsidize risky activities. Here's some brief analysis. It's also pushing back on Wall Street's encroachment into monetary policy.
I agree and I disagree. For instance, I do think the judge was making it fairly clear it was a "statement" ruling and not one meant to dish out actual justice -- else he would have awarded monetary damages. Nonetheless it's a bit naive. History will out, I guess.
the key here is that AIG has already been awarded monetary damages several years ago in the form of a bailout (although with harsher terms, hence the lawsuit). Why would you give them more? The judge is reprimanding both plaintiff and defendant in this ruling, which is appropriate given the situation
Indeed. And I am happy to agree with anyone who is worried about the government stepping and controlling a company. Obama famously fired the CEO of General Motors. However, I've spent a good bit of time examining the economics of the bailout and my conclusion is: it had to happen, and while there are steps available to curtail its happening again, this ruling is not the best of them.