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The Chutzpah of It

ChutzpahOh boy! The chutzpah of it. I read an article earlier in the week about two financiers who are suing the government for illegal seizure (I think. The article also mentioned they were suing because they were not benefiting enough.) One was a former CEO of AIG who was indicted for playing a role in setting up the culture that led to fraudulent accounting and possibly the kind of financial shennigans that brought down the company. The other is a hedge fund manager who invested in Fannie Mae and Freddie Mac. Now, both are suing the government because they are either not benefiting enough from their investments or their properties were improperly seized.

On the face of it, the suit is galling for some already sickeningly rich men, who probably played a part in the 2008 financial stress, and who are still rather well off today, to be claiming that they are financially hurt by the deals. Instead of being hurt, they may have benefited from the government saving the entities, especially since they didn’t have to pony up the money to save the companies. No, those companies had to go to the government to be saved. And by indirect association, the investors were saved.

One of the cases, though, talks about indefinite profit sweeps where the government sweeps up all of the profits indefinitely. This is the troublesome part and could cause the government problems in defending itself from the lawsuit.

But still, those guys should not get $100 billion in compensation. They did not help save the companies; instead, by use of proxy they came with their hands out, asking for help. They are already rich, the government probably saved their neck and they probably played an indirect role in the debacle.

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