Was it AIG’s Joe Cassano’s Fault?
I have argued previously that there is not one person to blame for this economic and financial fiasco. There may be some with more responsibility than others, from Alan Greenspan down to a shortlist of the greediest subprime mortgage broker CEO’s. However, I believe just as much that individuals are responsible for themselves and that purchasing a house that you cannot afford and not reading the details of the mortgage contract distribute the responsibility more broadly than most will argue.
I have also argued previously that while Wall Street firms are not entirely to blame, I do continue to point my finger in the direction of AIG.
Well, Michael Lewis helps explain the AIG fiasco even better this week by pointing the finger within AIG to the leader of the AIG FP unit, Joe Cassano. Reading the article, I couldn’t agree more. The blame is not entirely his, but considering his role within this unit, and the explained mentality he had for running it, I begin to place him up there with people such as Alan Greenspan.
They may not have understood the trouble they were creating at the time, and thus I do not think of them as criminals, but that does not change the fact that the decisions made by them helped inflate the bubble.
The article is quite a fascinating look into AIG’s history and there a few great lessons learned from it. One I found interesting is that as Elliot Spitzer was heralded for forcing executives such as Hank Greenberg out, he made no effort to replace or correct the problem afterward. I realize this is not his job, but there probably needs to be a clean-up crew following around Attorney Generals.
No related posts.
Popular Posts