Looking at things from the other side…AIG.

Not saying that this op-ed in the NYT has made me believe that finance guys deserve the money they make, but admittedly I didn’t think about the story from their side as much as I should have.  The letter is a resignation letter from one VP to the CEO.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

Click it and it all makes sense: Geithner plan.

Every once in a while some article comes across my computer screen and makes everything I’ve been hearing about a particular political controversy click.  This FAQ style explanation of Geithner’s plan did just that…check it out and hope it ‘clicks’ for you too!

AIG chieftain representin’ Che.

The fascination with Che in the US is hilarious.  I, along with many of my peers, own a silk screened Che shirt.  I feel a bit ashamed wearing it seeing as if I’m 99.9% pacifist and Che…well, was not.   But, I do consider myself a lover of many things ‘marxist’ and  ‘socialist’ and therefore wear the shirt as an unabashed criticism of capitalism.  So, that is my excuse.  What is the excuse of this AIG big-wig in charge of financial products?  I’m guessing he’s a pretty big fan of capitalism. 

Bad Banks

If you are a 20something I hope you’ve gotten over thinking NPR is lame.  If you are at all concerned about being informed, I’m going to assume you have.  But I was once among the NPR haters.  I vividly remember the days that I would beg my mom to let me change the station on the 45 minute ride home from school.  I was the lame kid in carpool who’s mom wouldn’t let us listen to Kiss 97.3, now I’m kind of embarrassed I ever listened to Kiss and I can’t get enough NPR.  Ah, how things have changed.  It is one of the only sources of news that I trust implicitly, and not just because they cover both sides of a story – which they do.  It is the way they discuss hard topics, they make them accessible and humanize them.  A great example of this is the most recent “This American Life” from Chicago public radio.

It is called “Bad Bank,” listen online or download as a podcast and listen on your commute.  After listening to this, I feel like I would be able to explain the banking crisis to a 5 year old.  Before, I understood what was going on but I wouldn’t have been able to explain what was going on to someone else.  This particular show also put me in the know about an important statistic.  Debt to GDP ratio.  Here is what David Beim, a Columbia finance professor, says about what is really wrong right now.

The problem is us. The problem is not the banks, greedy though they may be, overpaid though they may be. The problem is us… We’ve been living very high on the hog. Our living standard has been rising dramatically in the last 25 years. And we have been borrowing much of the money to make that prosperity happen.

And this is why he says this.  Notice the similarity between today and 1929?  Not good.  Listen to the podcast to learn more.

On a semi-related note.  If you’ve graduated to a more jargon-filled explanation then check out the blog Baseline Scenario.  One of the guests on “Bad Banks,” Simon Johnson, writes it and as a past employee of the IMF — he kind of knows what he is talking about.