AIG the next Enron?

[The Straight Story]

Taxpayers Will Get Hosed By The Collapse Of AIG's Insurance Business

AIG was once an ultra-reputable insurance company. But its fantastic losses have now more or less ruined the company and the brand. Already there are rumors that AIG's insurance customers are fleeing. And now CEI's insurance expert says AIG may be the next Enron.

From CEI (no link yet):

The collapse of state-regulated insurance subsidiaries could result in a significant tax hike for nearly all Americans, warns an insurance policy expert with the Competitive Enterprise Institute.

Eli Lehrer, who first warned about potential problems with AIG’s US-based insurance subsidiaries in September of 2008, warns that a second scandal appears to be brewing with regard to the insurance giant.

“AIG subsidiaries are likely in worse shape than appeared at first blush,” Lehrer explained. So far, AIG has sold only one of its 72 subsidiaries that sell insurance in the U.S.

Past collapses have not been a big deal because they have been small; but an AIG collapse would not be small. “In the past, when insurers have collapsed, it has meant that people in a few states have seen surcharges of a few dollars on their insurance policies—annoying, but not a big deal,” said Lehrer. “A bailout of AIG’s insurance businesses could mean enormous new taxes for just about everyone. Some people might see a very unwelcome surprise in their insurance bill.”

...
The consequences for the collapse of any one of AIG’s sizeable insurance subsidiaries would result in significant taxes—called “assessments” —on homeowners, automobile, life insurance, and other policies. These assessments would be decided at the state level.

http://www.businessinsider.com/taxpayers-will-get-hosed-by-the-collapse-of-aigs-insurance-business-2009-3

[FreakinDJ]

1. Neither of which possible without DeRegulation

Banking
Financial Markets
Media

Re-Regulating these should be our priorities

[JDPriestly]

2. The bail-out is a big ball of inflation.

It's going to hit the entire country with the fury of Hurricane Katrina. That will be step two.

And then, interest rates will go up to control the inflation, and the cycle starts again. The only answer is to tax the rich and let the banks go belly up.

[prairie2]

3. We are way beyond spending taxpayer money

Alan Greenspan's Fed created Trillions out of thin air. The only way to keep everything from falling in on itself is pump in massive amounts of money as needed until regulations can be put in place to dismantle it completely. Geithner was in front of Congress with a laundry list of things that need to be done.

Hedge funds, private equity groups and venture capitalists amount to little more than pirate ship operations. If you made illegal again what was until Reagan, Bush, Clinton and Phil Graham legalized it all of it would basically cease to exist.

Then these bloated parasites like AIG need to broken up. Rate payers don't have to take the hit on this, there needs to be a new sort of Bankrupcty for oversized companies like this similar to what is done with banks and I think this is what Geithner has in mind.

And yeah; there will be inflation; but prudent and aggressive taxation on the top margin can keep it from getting out of control.