The WSJ published an article last weekend which details a little bit more on the so-called AIG bailout where in reality AIG is nothing more than a conduit to both foreign and domestic banks. So far that sum given to “AIG” is $173 billion since last September.

James Piererson at The Corner shines some light on this article and unless you have a subscription service to WSJ you will only get the first couple paragraphs. This article also pretty much explains why the Treasury and Federal Reserve have been so closed on any information. Wouldn’t surprise me if TARP has the same implications since Congress totally abdicated their job to Paulson and now Geithner. What Congress did is actually worse, they gave total power to the Secretary of the Treasury. Even though most Republicans also voted for this massive failure, the responsibility is on the heads of Pelosi and Reid. Idiots. All of them.

The Journal has been able to identify several of the recipient banks, in addition to Goldman Sachs and Deutsche Bank — Merrill Lynch, Barclays, HSBC, Royal Bank of Scotland, Morgan Stanley, Wachovia, Bank of America, Lloyds, Banco Santander, Societie Generale, and several others. In other words, several of the world’s largest banking institutions.

The article raises the question as to why American taxpayers — factory workers, school teachers, small business owners — are being asked to bail out international banks whose executives received extravagant bonuses in years one, two, and three for decisions that banrupted their institutions in year four? The answer given by the Treasury and the Fed is that the banks, unless they are paid, will collapse like falling dominoes and thereby bring down the entire financial system with them. This appears more and more to be an exaggerated proposition as the crisis intensifies while the bailouts accumulate. There is also the question as to why the public cannot be told who is receiving checks courtesy of the taxpayers.

snip….When the history of this crisis is written, we may well conclude that the the bailouts were a mistake — that from the beginning the architects badly underestimated how much trouble the banks were in, that they prolonged the crisis by throwing good money after bad, that they rewarded the people responsible for it, and established a terrible precedent requiring ever more bailouts of auto companies, state and local governments, insolvent mortgage holders, and still others until we exhausted our resources on bad debts and had little left over to make provision for the future.

I remember arguing vehemently against TARP and the AIG bailout at varying times last September and  October with supposed financial experts, real estate and mortgage professionals and was always told I was just wrong and didn’t understand the true situation. When you believe in the US Constitution and free markets none of that matters. To think that AIG may be given additional funds to siphon off to more global banking institutions makes me want to blow up something, it’ll probably be my head exploding from anger.

WSJ – Top U.S., European Banks Got $50 Billion in AIG Aid

AIG bailout, TARP, Paulson, Geithner, Bernanke, Federal Reserve