The Continuing AIG Hellstorm: Jihad Bailout and Money Laundering

By Thersites, on February 4th, 2010

Pamela over at Atlas Shrugs has been doing an exceptional job exposing the Jihad bailout of AIG.  To go along with being a terrible hedge fund manager in AIGFP, it just so happens that “AIG was (and still is) the world leader in promoting Sharia-compliant insurance products.”  The problem?  As noted in the press release on attorney David Yerushalmi’s site, “By propping up AIG with tax payer funds, the U.S. government is directly and indirectly promoting Islam and, more troubling, Sharia.“  The crux of the court case is below:

David Yerushalmi, who is co-counsel with Robert Muise, laid out the grounds for the motion:

At the time of the takeover decision, Secretary Geithner was the head of the Federal Reserve Bank of New York and he was the leading advocate of the AIG takeover. Moreover, he designed how the U.S. government would not only bail out AIG with taxpayer dollars, but how the government would illegally take control of 80% of the voting shares through what was patently an illegal and invalid trust arrangement. It is apparent from the discovery we’ve conducted to date that this was done purposefully and with an intent to conceal the illegal takeover with a fraudulent trust.

Attorneys Yerushalmi and Muise want to ask Secretary Geithner:

· Why he forced AIG to take on so much debt that AIG’s credit rating, already in peril, was sure to collapse without yet additional government funds, essentially guaranteeing AIG would remain a ward of the state?
· Why he imposed such Draconian terms on AIG that there was no way it could survive without additional billions from U.S. taxpayers?
· Why he then used AIG to secretly funnel 100% payoffs to AIG’s counterparties, including his colleagues and friends at Goldman Sachs, Merrill Lynch, and the European giant, Société Générale.  In other words, why did Geithner decide to destroy AIG’s chances of survival as a private entity while surreptitiously saving and preserving private ownership of other domestic and foreign financial companies? And,
· Why he took control of 80% of AIG’s voting shares without legal authority to do so and used a fraudulent trust arrangement to conceal the illegal takeover?

For more on the matter check out (via Big Government) this transcript from 2008 in which Yerushalmi gives a detailed explanation on the problems regarding taxpayer dollars and Shariah and this interview from yesterday between Frank Gaffney and Yerushalmi on this landmark case of Murray v. Geithner.

On Shariah, Yerushalmi’s moral if not legal argument is well taken:

FrontPage Mag: Why do we care if AIG is offering a Muslim-friendly insurance product as just another way to make money even if the USG is now a shareholder? Doesn’t the USG invest in other companies that might offer religious consumers unique products? For example, what if the USG invests federal employee pension plan funds in a company that publishes books, including a line of religious books?

Yerushalmi: We should care a great deal. First, when the USG invests federal employee pension plans it is acting as an employer, not a government agency per se. In fact, the investment has nothing to do with the government’s tax and spending authority. Second, the investment in such plans is generally through an intermediary investment fund which in turn only invests passively and through minority holdings. In this case, we have the USG acting not as an employer but expressly through its tax and spending authority and taking an absolute controlling position. AIG is in effect nationalized. It is a government company.

But, beyond these strictly legal arguments, there is an overarching concern. Can it really be the case that we want the USG involved in a theologically based legal doctrine that calls for our conversion, subjugation or murder? Have we abdicated even the rudiments of good sense in the name of a PC-driven, non-judgmental multi-culturalism? If we have, we have abdicated our very right to exist as a nation.



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Dominant Economic Views in Western Society, Part II

By Stephan Zimmermann, on September 4th, 2008

It would be (or maybe is?) an interesting and informative exercise to poll existing undergraduate economic students whether they consider themselves “Homo economicus.”

A second part of the study could be completed with graduate students, about to embark with a plethora of knowledge of economics, ready to face the “real world” of jobs in the workplace.

What better place than to conduct such a study than in the pages of Amateur Economists where we could entertain a question and answer debate?

As part of the exercise the students would, of course, have to discern for themselves the various definitions of the Latin phrase, consider the implications of answering in the negative or affirmative, and provide an honest self-inventory of their personal preferences and self-perceptions.

Do today’s economics students consider themselves “rational, self-centered, perfectly informed individuals who want wealth and avoid unnecessary labor?” as Adam Smith, John Stuart Mill, Vilfredo Pareto, and others discussed the model?

How do people, especially economists, see themselves?

How do they perceive their religious beliefs in light of the “Homo economics” model?

How does conventional European economics differ from its counterparts that espouse different philosophies, yet seek to answer the same questions of finite resources facing an infinite demand?

A discussion, if it occurs, would likely raise the very question of “maximization” as it is generally taught in economics classes and texts.

Moreover, it may be interesting and enlightening to read in a nutshell a synopsis of Islamic economic fundamentals as a start.

In a recent paper two Islamic scholars, Toseek Azid and Mehmet Asutay (Bahauddin Zakariya Universiy, Pakstan, and Durham University, U.K., respectively) point out that Maqasid al-Sharia (Koranic law, including economics and banking), or the objectives of the Shari’ah, aim to fulfill the objectives of human well-being. As a basic premise the authors suggest that “It, therefore, rejects the neo-classical postulate that human beings are in their intrinsic nature self-interest maximizers.”

This, of course, is diametrically opposed to current predominant economic thought. It is perhaps most closely approached by the late Nobel Prize winner, Herbert A. Simon.

Maximization of utility is also rejected by Sharia thought. The authors thus ask quite plausibly “if we suppose that all persons are egoists – they act for personal ends – what sense does it make to speak of ethics?”

While Islamic economics shares the belief that “the agents of the different sets of the economy are inherently selfish” the authors believe that “the attitude is changing towards the social and economic benefits through participation and cooperation.”

“A continuous process of … training of the society is required, which is only possible if we have an ideological system … that should not be biased towards any segment or set of the society and economy.” (Azid, Toseek, and Asutay, Mehmet, “Does ethico-moral coalition complement to economic coalition?” HUMANOMICS 23.3 (2007): 153-173)

Over the last quarter century, much of economics has been influenced by Herbert Simon’s ideas. He questioned the idea of economic behavior that intended to seek only the optimum result for each economic agent. Further, he suggested that individuals or even organizations could not obtain or process the massive information available to reach ultimate rational decisions. Instead, he suggested that decisions only need to be “good enough” to assure reasonable or acceptable results.

The question of “satisfycing,” rather than maximizing, has been a steadily growing trend, not only for philosophers, but for political adherents, as well. This has been especially true of Islamic adherents in Europe.

On September 22, 2007, the first Islamic political party in Europe was formed in Finland, the Finnish Islamic Party (FIP). Municipal elections will occur next month. The new party hopes to qualify to participate in national parliamentary elections in 2011. It currently has valid signatures for roughly a thousand of five thousand signatures required. The party was established by native Finns.

With the growing trend in Islamic populations throughout Europe, it is not inconceivable that Islamic economics and finance, as well as Herbert Simon’s ideas, may find greater acceptance. On the other hand, Islamic concepts may well be more and more co-opted into traditional European and American models.

Stephan is a former department chair for economics and taught at various colleges and universities at both graduate and undergraduate levels. If you would like Stephan to answer your economics-related questions, read his post “Got an Economics Question?” and submit your questions in the comments area there.



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