The fate of the giant insurance company AIG is a tale with a clear moral. Over a period of 40 years, Hank Greenberg built this company up from a storefront, turning it into the greatest insurer in the world, doing business successfully, and often as a pioneer, all over the globe.
Eliot Spitzer, as New York attorney general, said on television that he thought Greenberg had violated criminal statutes (which has never been alleged since, formally or otherwise, though the same can’t be said of Spitzer), and threatened prosecution of AIG directors if they did not remove Greenberg as chairman — despite the fact he was the company’s controlling shareholder and founder. Greenberg left, and now the State of New York, of which Spitzer was briefly the governor, and the U.S. Federal Reserve, have had to organize an $85-billion rescue package, for a company at which government meddling had already been instrumental in vapourizing $40-billion of shareholders’ money. Government took away, and has tried belatedly to give back. The moral: Best not to take away in the first place.
