Trying To Understand The AIG Crisis 

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Who is AIG?  American International Group was started in 1919 and its headquarters are in New York, New York. AIG offers commercial insurance, as well as personal insurance.

AIG has bases in Europe and Asia. AIG was the 18th largest public company in the world in 2008, according to Forbes.

AIG was hit in 2008 with a liquidity crisis. The U.S. government has given AIG $170 billion, which is 80% debt forwarded to U.S. taxpayers.

AIG reported losses  (PDF files) of $61.7 billion in the last 3 months of 2008.

Now AIG is dishing out huge bonuses to employees, which amounts to $165 million. President Obama is very disappointed with the reckless manner that AIG is handling business during a global economic crisis.

The theory is this– AIG is intertwined in a global economy. So if the global economy is to be rescued, AIG must keep its head above water until the crisis is solved. The government is almost left with no choice but to pick up the tab.

But, possibly some good things may come out of this mishandling of money. The public is outraged at big business in general. There is much anger directed toward big business not paying taxes. And, the overall lack of regulation in the finance business has angered many.

The deregulation of the financial industry doesn’t seem to be working. The public is now taking notice and realizes that something needs to be done immediately.