Wednesday, September 24, 2008
Today, I was reading through the AIG bailout terms from the Fed’s press release on September 16 (last Tuesday, seems like eons ago), and came across some fine print that could have killed the whole deal.
Here is the announcement:
Pres. Bush nominated two bankers to fill the last two seats on the Board of Governors in May 2007, Elizabeth Duke and Allan Klane. A stalemate between Bush and Congress left those two seats unfilled until August 5 2008, where just 3 weeks later, Frederic Mishkin resigned, leaving again just 5 Governors on the Board.
Good thing that Congress could finally muster up enough dignity to ratify the nomination of Elizabeth Duke – just 1.5 months ago – because if they hadn’t, the Board of Governors could not have satisfied the required 5-member affirmative vote (because there would have been just four) to bail out AIG.
Politicking: In this case, it really could have ruined the economy!