Wednesday, October 8, 2008

Fed Lends AIG Additional $38 Billion, No Pedicures Allowed

Undeterred by the discovery that AIG executives spent $440,000 partying at the St. Regis just a few days after being bailed out by the US taxpayer, the Fed has granted AIG an additional $37.8 billion in loans secured by investment-grade fixed income securities.  You would think that this loan comes with the caveat that executives can no longer spend money frivolously on parties aimed at "boosting morale," or put fired executives on $1 million-per-month retainers but unfortunately that doesn't appear to be the case.  A spokesman for AIG told the Washington Post's Investigations Blog that several AIG subsidiaries are going ahead with social and business events that were scheduled before the bailout.  For example, later this month, an estimated 15o brokers and 50 AIG employees are attending a get-together for the company's high-end insurance "private-client group" at the Ritz Carlton in Half Moon Bay, California.  Honestly, boondoggles like this are great fun.  I've been lucky enough to attend a few in my time.  Are they really necessary, or do they actually facilitate business?  Absolutely not.  A good boondoggle should be used sparingly.  For example, 1999 would've been a great year to have plenty of golf outings with some spa treatments and hefty bar tabs thrown in for good measure.  But maybe, just maybe, you want to lay off on the unnecessary trips to the Ritz when the FEDERAL GOVERNMENT HAS TO LEND YOU $100 BILLION DOLLARS TO STAY AFLOAT. Okay?  I rarely use all-caps, but I feel much better now.  

Update:  Apparently the Ritz Carlton Half Moon Bay boondoggle has been cancelled due to an uproar of moral indignation on behalf of US taxpayers.    


underdog said...

I think AIG brass read Mock the Market and cancelled their outing. Good work, K10! It was either cancel or invite all taxpayers.

K10 said...

Too bad. I had already packed my bags to go!