One thing is already known, however. In deciding whether shareholders or taxpayers will profit from government bailouts, judges Sweeney in the Fannie and Freddie case and Wheeler in the AIG case are unlikely to have the last word. With so many billions of dollars at stake, their decisions are almost certain to be appealed all the way to the Supreme Court.
Americans were angry when Wall Street’s greedy and risky behavior triggered a global financial crisis in 2008. They were angrier still when the government had to borrow and spend hundreds of billions of dollars to rescue mortgage giants Fannie Mae and Freddie Mac, the largest banks and the insurance company AIG. They were outraged when they found out that executives at those enterprises were continuing to receive big salaries and bonuses.
So just imagine how outrageous it would be if some Wall Street sharpies went to court to argue that they didn’t benefit enough from the bailouts and that taxpayers should pay them tens of billions of dollars more.
In fact, they did. And, according to legal observers, they just might prevail.
“Lawsuits of the Rich and Shameless” is how the comedian Jon Stewart dubbed it.
“An absurdist comedy .?.?. worthy of the Marx Brothers or Mel Brooks,” wrote John Cassidy, the New Yorker’s economics correspondent.
For taxpayers, it looks to be another example of the old adage that no good deed goes unpunished.