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Calabria: Should Have Let AIG Fail

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    The Cato Institute’s Mark Calabria on recent comments made by AIG CEO Robert Benmosche.

  • Duration 4:30
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The president and CEO of insurance giant AIG Robert O'Shea -- O'Shea that is.

Is -- he never got -- thank you note for paying back the bailout loan his company received from taxpayers.

AIG took in nearly 68 billion for taxpayers.

And in a recent New York magazine article AIG CEO was quoted as saying the AIG bailout wasn't a free lunch.

AIG is now succeeded in getting the Fed back all of its money we're getting close -- paying the treasury back.

He's calling out the Fed and -- you and the taxpayer -- here to weigh in mark Calabria.

Stricter financial regulation studies at the Cato Institute.

So here's the real detail mark okay because that -- They got 68 billion dollars the amount returned with 65 point one billion they still alleged two point six billion.

Why should I be on my knees in front of -- -- that just sounds crazy to make.

It it does sound crazy but I could give the president must keep in mind he didn't come on until a year after AIG was taken over -- he came in late 2009.

I think he's turned around I think he sold off a lot of assets I think the company to get a lot worse shape if he wasn't there.

I think some of the reaction against his colleagues are really -- -- Wayman it's not just me calling him out it's also the New York Post that wrote.

The AIG chief is an arrogant bail out -- -- Iraq.

Arrogant yes but you know he -- for the bailout he wasn't there when it happened it is you know Jerry I was against the -- then I'm against the bail out now.

But if you're going to bail out companies which again you should do what you're going to you want management.

That is gonna make tough choices -- guy came in shook up the management sold off assets slim down the company and got them back on the right track.

Again we should have taken the company through bankruptcy we should have paid off the counter parties we should have bailed out the wall Wall Street that process.

But again if you're gonna get on this rod you have to have a strong CEO in this.

Bring my idea in this reminds me when the car CEOs came down to Washington for -- hearing on what was going on with them.

In their private jets at a time but -- companies were crumbling.

And everybody said what's former lucky that don't you see the problem here that's reminds me of -- my Shays saying you should be thankful to me.

It's just a messy it's not a good PR message is -- values and taxpayers wanna hear.

-- I think the optics of this horrible even even I agree with that I think I -- I think he deserves to thank you because I think he has turned the company around.

But I do think there's a difference because he came on after the -- he's not the guy -- this company that was before him.

-- -- 100% -- the optics of this.

Look horrible the way he put this across a horrible now -- were saying this was a interview that the magazine New York magazine came to him.

He didn't do a lot publish an op Ed saying why -- everybody thanking me so you know I'm -- a kind of a little bit of slack.

-- a -- little bit of slack we can make Hillary supporter -- knew he was being quoted.

I don't know about that you know what's interesting now is we are seeing things come full circle the companies that were -- that he look at Citigroup.

They -- CEO last week.

Big changes for that company that was the guy who was in charge when they were going through their troubles when they got their bailout.

You know nobody may have gone to jail but we're seeing the fallout even now.

And -- And I think that's agreed but you know I would look at some of the other companies -- -- look at Fannie Mae or Freddie Mac these companies have seen lots of leadership changeover.

That are still in horrible shape.

And so one of the reasons that I think AIG needed a strong personality is he constantly push back attempts to politicize.

You know we every day re read about some but some politician when he being made -- forgive mortgage debt.

This in that.

If you wanna protect the taxpayer investment you've got to have somebody who's a little -- -- who's a little abrasive.

If they rollover every time Washington says you know why did she do this want to do that -- you're never gonna bring those companies you.

Really -- a really good point which is Fannie and Freddie.

Which are the institutions that what's the most money now and in the as a legacy -- out of all these bailout out target -- X cataract.

There's we're still -- on the hook for billions and billion dollar got to get a Barack.

-- will we ever mark.

Well you know I think -- choice because we either get rid of them and if we get rid of them were unlikely to get the money back or stop with them because you have to keep them around you -- I want my back so.

I miss a hobson's source here I'm not happy with -- either option.

Mark thanks for coming on -- illustrate body really appreciate -- thank you.

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