Sunday, July 14, 2013

Eliot's place in the financial crisis

Former Governor of New York, former Attorney General of same, failed cable television talking head, Eliot Spitzer emerges from under whatever cover he had, to tell the world that, Rule 1. Only government can ensure integrity, transparency, and fair dealing. That can be found on page 18 of, Government's Place In The Market.

And maybe he has a point, since private citizen (and Client #9) Spitzer is marketing (and Amazon is colluding with him in it) the product as a book. Let's evaluate that for fair dealing; the book has pages numbered to 83. Those pages are 4-1/2" by 7", with margins at top of 1"and bottom of 1-1/2", and 3/4" each on the left and right sides. Leaving us with textual areas of 2-3/4" x 4-1/2", on pages that are 'full'. Which not all the pages are.

Page 1, in its entirety, reads; Introduction. Page 2 is completely blank. Page 3 has two short paragraphs that require only 2-1/2" by 2-3/4" for the written words. Pages 11 and 12 are completely blank. Page 13, contains only; I. Government's Place in the Market. Page 14 is also completely blank. As are pages 55, 56, and 58. Page 57, reads merely; II Forum.

Dean Baker gets to write from page 59-65 (inclusive). Page 66 is blank, and Robert Johnson starts his contribution with a half page of text on 67, finishes with another half page on 74. Pages 75 and 76 are again, completely without any text, and page 77 reads; III Common Sense. Followed immediately by a blank page 78. Page 79 takes up less than half the space available to say:
ertarian ideology of the past 30 years a mere
façade behind which government actively
participated in the crafting of rules and
priorities that benefited specific groups--
banks, big pharma, certain land owners. I
surely do not believe that more than a few
intellectuals of the right actually subscribed
to the theory that a market could exist with-
Nice touch that last half word, with-. He probably couldn't have gotten it in like that if he'd earlier written '30' as 'thirty'.

Spitzer concludes with actual paragraphs on pages 80-83. Marcel Proust, he is not. A New York minute has lasted longer than this book. However, it was not too short for Spitzer to write (p. 37) this, Institutions the size of AIG underperform because they cannot be managed.

Can that assertion be ascribed to Princeton and Harvard Law School grad Spitzer's ignorance of the history of AIG? Not exactly.  As readers of the recently published The AIG Story know, that company was being managed quite competently by its founder Maurice (Hank) Greenberg. So competently it was one of the world's most solid financial services firms in existence.

So, how did AIG deteriorate into the over leveraged disaster it became after 2005, requiring a 90 billion dollar infusion of funds from the federal government in 2008?  Easy, it met with the mendacious, arrogant, politically ambitious and utterly ruthless...Attorney General of NY, Eliot Spitzer. It was Spitzer's meddling--probably illegal, certainly unethical--in the affairs of AIG. Specifically his pressuring accounting firm Price Waterhouse into withdrawing their certification of AIG's financials in spring 2005, which resulted in CEO Greenberg ouster by the Board, and the devastation of the firm's AAA credit rating.

If one wants to know what government's place in the market should not be, read The AIG Story.  Along the way, one will find out what Eliot Spitzer's place should be; as far from any position of authority as humanly possible. Something NYC's voters should know before they vote in the upcoming election for comptroller; the last time Spitzer had power, he abused it, helped to destroy one of the best managed insurance firms in the world, and made a major contribution to the 2008 financial crisis.

No comments:

Post a Comment