I refer to his latest at CounterPunch. Witness:
AIG, perhaps the most recklessly managed company in the world, was so thoroughly enmeshed in nearly every sector of the American—and even global—economy that to let it sunder would be to risk the crash of the nation.Wrong, Jeffy.
AIG was actually the most aggressively conservative, self-protecting insurance entity on earth. And I know this because I used to work for them. Here is the AIG model of growth and stability:
1) price policies for maximum profit
2) aggressively deny and defend all claims
3) aggressively push state regulatory entities for leniency whenever AIG breached a state regulatory provision
4) invest premium income conservatively, on the whole -- meaning, any risky investments are countered with loss-proof stable positions in excess of the possible loss on any risky investment
5) thanks to Hank Greenberg's connections in US intelligence (primarily CIA), AIG got a lot of secure, replicating (renewing and expanding) business writing commercial coverages for CIA front companies
This is how it went from being a small brokerage under Cornelius VanderStarr to the international powerhouse it became under Maurice ("Hank") Greenberg.
If AIG ever got into any form of "financial trouble" then that trouble was fabricated as an accounting exercise, with actual profits being sent to offshore accounts where they'd remain safe for Hank Greenberg and the other major shareholders.
Here's St Clair again, stepping in a big pile of horse-shit:
All through the high-flying 90s, the AIG risk-swallowing business continued to defy gravity, posting amazing profits on ever more opaque financial confabulations. Then in 2002 came the first whiff of rot. AIG insiders told Michael Lewis that the decomposition began to gnaw away at the FP Division the very moment Cassano replaced his mentor Tom Savage as CEO of the subsidiary. Of course, this retrospective was almost certainly motivated in large measure by post-fall ass-covering. But there’s no question that Cassano was an abrasive personality and not, like many of the traders, an Ivy Leaguer with a DNA profile shaped by generations of old money.I'm sure it feels good for St Clair, an aging "activist" lefty who despises all things that have a whiff of the GOP, to talk so condescendingly and informedly. But where is St Clair's insight here? He has deferred to Michael Lewis, a man who --like another fraud, Naomi Klein-- has built a profitable book-writing career on talking about his own favorite economic practices as if they are evil, but never renouncing those practices or overtly stating that the practices should be ended. Like Naomi Klein, Michael Lewis loves the money he makes from these nefarious practices and so he cannot bring himself to actually tell the truth about them. Why would he? His font of funds would cease to spring greenbacks!
The structure of AIG was one which would not allow the "financial products division" to destroy the whole company. Hank Greenberg would never allow such a thing to happen. Go back to the 5-point formula above, and then tell me where a greedy high-risk go-for-broke strategy in the FP division would be allowed. Please.
I'm sure Lewis & St Clair will counter this assertion by saying that New York's Atty Gen'l, Eliot Spitzer, had Hank Greenberg "removed from power" at AIG. This notion is comical. Hank Greenberg is the sort of tyrant who would not be removed from practical power no matter what on-paper happenings transpire. So if Spitzer had Greenberg removed on paper, you can be sure that Greenberg's power and influence remained in place. It's not hard to imagine. We all know that Mafia bosses can run their enterprises from prison cells. Dick Cheney and Dubya Bush ran operations in Iraq from Washington DC. Et cetera, et cetera.
The truth about AIG is a whole lot different than St Clair and Lewis would have us believe. The truth about AIG is this.
Hank Greenberg is the emperor of AIG. And he's old. And his sons wouldn't be suitable for running the company as he was doing, so he needed to find a buyer.
Unfortunately, AIG is an American company whose operations are premised on the strength of the American dollar. And the US Dollar has been tanking. So Hank couldn't get optimum acquisition pricing from the likely buyers -- Swiss and other European insurance conglomerates.
Luckily for Hank, AIG insured a lot of CIA front businesses, which means that Uncle Sam would hate to see the details of those businesses in the hands of a foreign insurance conglomerate. And those details would surely pass to whomever bought AIG.
But if Hank Greenberg could orchestrate a reason for Uncle Sam to "bail out" AIG, then what a coup! Hank would get high dollar pricing for his company if Uncle Sam was buying it. Uncle Sam wants to keep the CIA details hush-hush, of course.
So, like many of the other recipients of the Fed "bailout" money, AIG created a fraudulent set of books to make it appear as though "unexpected losses" dragged the company to fatal depths.
If Jeff St Clair had half a notion of how to do investigative journalism, he could have uncovered this shit.
But his writing is just to fan the flames of anger and antipathy in a prurient partisan pissing match between Democrats and Republicans.
Fuck Jeffrey St Clair, that fucking fraudulent phony.
Insurance is the economic lubricant of all global transactions. Commercial liability insurance policies gather all sorts of information on the commercial entity being insured. This information includes what types of risks the entity creates through its operations, and includes past legal and regulatory problems. Any entity writing commercial liability policies is in a position to see the dirt on whatever entity it either underwrites and insures, or at least provides a detailed quote for coverage.
This means AIG has a lot of dirt on a lot of commercial enterprises around the world. A lot of dirt. A phenomenal amount of dirt. And that dirt is valuable as "intelligence" -- valuable to entities like the CIA, the NSA, and all the military and quasi-military intel entities that operate on behalf of the USA and/or its most powerful individual and corporate citizens.
For Uncle Sam to now have possession of that information... well, I leave that to you, reader, to understand why that would be something that would make Uncle Sam salivate.
If Jeff St Clair knew anything about insurance, he could have sniffed this out quickly. But he doesn't know insurance. He knows only partisan pissing, and inflaming the Eternal Death Match of Donkey vs Elephant. In the case of AIG, he's trying to paste this one on Bush/Cheney. Or Geithner. Will we see St Clair lambaste the Saintly, Noble Democrats?
This is what Jeff St Clair does. He writes not to tell the truth, but to keep his income flowing. And that's why I say,
fuck Jeff St Clair.