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Wednesday Morning Quarterback: AIG

By David Evans.

We are the beneficiaries of an $85 billion  investment in American General Insurance’s parent company. We are also two weeks from the beginning of fiscal year 2009. It may be a good time to look at the investments made on our behalf since 2001. Perhaps we can do better now that all the same old mistakes have been tried again.

First, this administration inherited surpluses as far as the eye can see. They were halved to give the wealthiest Americans a tax break. This looting was justified by the usual doubletalk. We were investing in the job creators, the story went. Sure enough, 300 million people got jobbed. The NAIRU was okay then, but now it fits like any other retro jacket. There is room for public works projects in the next budget, provided they work. and provided that they are public. We won’t need to monetarize the debt, provided we get the current crop of chimps out of the control room.

The secret Enron energy policy meetings probably didn’t cost much when they happened. Remember that Enron accounting rules require booking the lifetime profits of a deal when it is signed, or when something is needed to impress the investment banks. Of course there were five of them then. In the interim, three have been as impressed as any hand on a privateer or mercenary fleet.

Equally impressed were the victims of the standardized testing regime. In the next administration, no one will be allowed to pass educational policy prescriptions if they have thrice failed critical thinking. What is the plural of moose? (Hint: Reagan’s AG)

Meanwhile back at the rancho arbusto, the “appointed one” rode around the country with a list of Democratic Senators (on the ballot at midterm) until opportunity presented itself. In short order, no-bid contracts aplenty were being quietly let, often to Tajiks and Uzbeks. We saw the pallets of cash in Iraq, but we haven’t seen how the invasion investment was good for body or soul. Arbusto is southwestern for a plant, especially an ornamental, also (colloquially) a minor-leaguer.

Then more tax cuts were needed. Then we needed to spend more on the occupation. Then the “appointed one” tried to save Social Security by privatizing it. Then the Republican Congress realized tax cuts were needed. Almost every social or political challenge could be solved by more tax cuts, the story went.

Then we had an ownership society. Then we needed to plan a trip to Mars instead of regulating greenhouse gases. Then it was time for tax cuts. No Congress can bind a future Congress, but it has been an article of faith that the tax cuts must be made permanent. It is a curious faith that has the unitary executive reciting an almost familiar mantra: my kingdom come, my will be done.

Shall we take a moment to look at the balance sheet? Let’s do it now before we invest in more banks, brokerage houses, or insurance companies. Or should we make it a very cursory glance at the financial facts of the unitary executive? If we skip the parts written in red, it won’t take long.

This is not to infer that previous administrations always got it right.
We’re still funding that star wars thing. The Sandinista foreign minister of Nicaragua is now president of the UN General Assembly. The eighties demanded tax cut after defense buildup after tax cut as well. The tax cuts of Kennedy, Reagan, Bush are history, tragedy, farce.

Of course hindsight is 20-20. Who could have guessed that of all the political dynasties involved in the presidential election of 1968, the one related to the Treasury Secretary may have the most lasting influence. The Smothers Brothers were way ahead of their time.

Thursday’s campaign event at Espanola is sure to present some contrasts in the candidates’ economic plans. Espanola expanded for workers at Los Alamos who couldn’t afford to live where they worked. If the lab rats come out, let us promise them continued funding if they will focus like a laser beam on green breakthroughs. We need sufficient economies of scale such as to allow a rapid and affordable transformation away from the drill, drill, drill culture.

The research triangle might be a good place for a similar proposal, given that a progressive voice in the Senate will fill Jesse Helms’ old seat.

Construction continues on the border fence/wall, although no one really knows why, except the contractor. The contractor knows that the Republican legislation calling for secure fences will be revisited. The contractor also knows that all the money for the debacle has flown, probably related to tax cuts. And we don’t really ned the fence/wall to be secure. Now we’ve got insurance.

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