White House: 4th AIG Bailout Better Than the Alternative

At his briefing today, White House press secretary Robert Gibbs was asked a number of questions about the government's latest bailout of AIG. "The Treasury Department and others felt that the systemic risk of doing nothing was simply unacceptable," Gibbs said. "Today's actions further continue allowing the process of...the orderly restructuring of AIG. Their management, as you all know, was replaced in November. We're focused on taking the steps necessary to restructure AIG so that it, in the long run, no longer poses the type of systemic threat that it poses right now. And I think today's actions...were critical in that restructuring." The steps that the Department of Treasury "and others took," Gibbs asserted, "were to ensure a larger systemic problem wasn't one that we had to deal with here today in letting something just die." Pondered the press secretary: "I wonder what we'd be talking about today if we get something like an AIG default on the massive amount of debt that it has and what that might do to the economy and to the markets? The president and his team would rather certainly not have to deal with these questions." Would this latest infusion of $30 billion be the end? "We certainly hope...that it is the end," Gibbs said, "but understand that Treasury is undergoing the process of evaluations to bank health. You know, I think one of the things that's important is to adequately diagnose and understand what risks are out there and the size and the scope of those risks." Gibbs said the administration was confident that the previous $150 billion had been spent in the proper way by AIG executives. "Yes," he said, when asked. - jpt

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