Today's Outrage: No Forgiveness for AIG

You can be darn sure that AIG would forcibly insist on repayment of debt it is owed. The insurer should expect the U.S. government to do the same.
Publish date:

How stupid does AIG (AIG) - Get Report think taxpayers are?

Do they really think we are going to just let them off the hook for billions and billions of dollars worth of loans?

That's apparently the offer AIG is presenting the government. The company is reportedly trying to get the U.S. to cancel a big chunk of loans provided to AIG and convert the preferred shares into common shares, according to the

Financial Times

. This follows the model of

Citigroup's (C) - Get Report worthless offer

to the government earlier this week.

But AIG's plan is even more sneaky. The company also wants to

split itself into three divisions

and convert the government's 80% ownership of the whole business into large stakes in the new divisions -- an Asian unit, an international life insurance unit and a U.S. unit, according to the

Financial Times


It's the old divide and conquer plan -- they'll split up the big U.S. loans among smaller divisions that can then lobby individually for the loans to be canceled. This will make each division's request seem more reasonable because it won't look like such a huge amount of money.

Let's be clear about what AIG and Citi are trying to do -- they want to take taxpayers for a ride. They want something for nothing. They shouldn't get it.

You can be darn sure that AIG and Citi will forcibly insist on repayment of any loans they make to individual taxpayers.

Therefore, they should expect the same treatment for the loans they received


taxpayers. That goes for

Bank of America

(BAC) - Get Report


Wells Fargo

(WFC) - Get Report


Goldman Sachs

(GS) - Get Report

and any other bank that took federal bailout money.

The government should forcibly insist upon repayment.

Hall is the editor of

. Previously, he served as deputy editor and chief innovation officer at

The Orange County Register

and as a news manager at

Bloomberg News

in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at

The Journal-Gazette

in Fort Wayne, Ind. His work also has been published in a variety of newspapers including

The Wall Street Journal


The New York Times


International Herald Tribune

. Hall received a bachelor�s degree in journalism and political science from The Ohio State University and has taken graduate management science courses at Boston University.