Felix Salmon

Why Treasury is being so nice to AIG

February 28, 2012

Andrew Ross Sorkin today asks why Treasury is letting AIG keep billions of dollars in net operating losses, rather than forcing it to pay income tax. I’ll hazard a guess at one part of the answer, as informed by my conversation with Jim Millstein in October 2010: if you want to have a high value for your insurance company, you want it to have a rock-solid credit rating. And so you boost the value of the equity cushion in the company by padding it with net operating loss carryovers and the like, even if that means you lose a certain amount of corporate income tax in the meantime.

How can Benmosche be tamed?

July 15, 2010

Robert Benmosche is probably the highest-paid public-sector employee in America: his $10.5 million salary means that he takes home Barack Obama’s $400,000 annual pay every two weeks. And yes, Obama is his ultimate boss.