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Karin A Fleischhaker-Griffin

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· The Dance of a Lifetime

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· The Savvy Businessperson's Guide to Property & Casualty Insurance

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· How A Factory and a Bottle of New Skin Ruined my Career

· November 6 2012 - You have Lost

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· The Overview Experience produced by Story Musgrave


· Cutting Foreign Aid and Drill Baby Drill


· England's Health Care is lower Want lower Costs in the US




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Books by Karin A Fleischhaker-Griffin
Who really is to blame for the Economy?
By Karin A Fleischhaker-Griffin
Last edited: Sunday, May 17, 2009
Posted: Sunday, May 17, 2009

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Karin A Fleischhaker-Griffin

• How A Factory and a Bottle of New Skin Ruined my Career
• November 6 2012 - You have Lost
• My Daughter Tamara
• The Overview Experience produced by Story Musgrave
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We point fingers at everyone in the news including the AIG. But are we not partially to blame?



Every day one hears about the state of the economy and the horror stories of what has transpired to millions of people.  People who have lost their life savings in the stock market or financial schemes; MBA’s trying to secure any job including working in fast food positions or any form of physical labor if they are not discriminated against because of having too much experience in another industry; mom and pop businesses as well as small business establishments closing their doors because people no longer may pay for services or are unable to pay their bills; and, larger and medium sized businesses are unable to retain their employee base.


Furthermore, after losing your financial security, seniors who are capable of working are not chosen for specific jobs so that they are unable to rebuild their financial futures, and may be forced to take early social security which in the long run will make the social security fund run out well before its time.  And this is just to place food on the table.  And of what incentive would it be to hire a senior or anyone over 55.  After all, the benefits paid would be higher because of the attained age of the employee and even though they have experience, it is much easier to train someone to the Company way who does not have the experience.  In fact the usual statement to someone older is “I am not sure what I would do with you!”  Great comment isn’t it.  We are the only country who doesn’t seem to believe with age comes wisdom.  But families are coming together in this economic time to assist each other which is wonderful.


Many businesses have chosen to allow people to be laid off to collect unemployment benefits or some businesses retain their employees and place them on a part time status so that although they may work, the employees now fall under COBRA and are not receiving benefits unless they pay for them themselves.  And what happens to the family man who may not retain health insurance or has to make a choice of placing food on the table and a place to live rather than provide insurance for medical.


I recently have spoken to a contractor who chose to provide his 30 some people with a job and managed to carry it off for some 16 months before he had to let everyone go.  The employer provided benefits and did not cut the employees’ salaries.  Between accounts payables and low receivables, he placed himself in jeopardy because he had a kind heart and had concern for others.  He now owes much money to his vendors and cannot claim bankruptcy because he does not wish to lose everything he has worked so long to have including a nice house and a car.  And for those of you who have considered bankruptcy, isn’t it nice to know you will lose your home, may only have $1,200 in personal property and a car valued at that amount, for which you must pay for the balance if its value is worth more?  You will be owned by the Government forever, and with no ability to find  a job, or to be able to possibly own a home or have other possessions in the future or for at least seven years to begin with.


I have spoken to people in medical vocations as well, who have apprised me that people are not seeking medical help because of the state of the economy. Such medical vocations as physical therapists or those vocations such as chiropractors find patients are not seeking services on a regular basis because such services are no longer affordable.   People are living in tents because they no longer have homes. Their homes have been lost in foreclosure and even reverse mortgages no longer work for the seniors because the house valuation has tanked and they would not receive the valuation they had in the past.  


I ask myself, when will this end.  When will business economics be utilized to make a strong and unified nation?  Why were the promises made to protect those who had lower or middle class incomes changed so that in essence, those are the individuals who are hurt the most with reverse economic decisions to that of business economics. And, why must leaders not be allowed to be reimbursed for their ability to change the world or make a profit.  Is that not what the United States is about.


Every day we hear about the Health industry and that insurance is so expensive that millions have dropped their health insurance coverage.  Was this the fault of the health insurance industry or was the problem one which was established by laws, lobbyists and groups which dictate certain standards, some of which are too high to achieve?.  Today, if one may afford certain medical procedures, it is more prudent to travel to a foreign hospital than to utilize those in the United States because the costs may be as little as 1/3 of that which is paid in the United States.


Because of our laws pertaining to the drug industry and to the profits given to all the middlemen involved, costs have increased dramatically.  And what is interesting is that the drugs for animals have more quality control than those for humans and yet the cost for humans is so extravagant that even in the areas of Medicare, seniors who are in need of certain drugs, must pay high sums to keep their lifestyle or not utilize drugs when they need to. 


And because of the medical malpractice suits, one who is a patient must take every conceivable test, whether it may be required or not.  Further one is given one drug to curb the effects of another drug…why?  Well it is simple.  If your caregiver makes an error or does not cover every base, they are subject to lawsuits.  And the hospitals and doctors each have medical malpractice insurance, as do many vocations.  The costs for such insurance based upon industry and experience, continually go up with higher deductibles if a loss occurs and with costs most medical care providers cannot equally afford at this given time. And, lets face it, these additional tests cost the health care system additional money.


Okay, you may say look at what a medical professional can afford.  Doctors and Lawyers have nice houses, great cars and numerous assets.  And ask yourself, why these people are in the profession they are in.  For most part it is because they have a passion and have expended numerous years in school (and have tremendous loan payments as a result.) Each professional is required to continue his or her education to assist those who require their services.  Not all of us are cut of the same cloth and not all of us would be good in the same positions.  And, today, even the medical profession is suffering to pay bills and hospitals are losing money for the emergencies which they handle for those without insurance.


Further the industry was blamed for .pre-existing condition clauses.  Some have paid insurance for years and any pre-existing conditions with continuous insurance would be covered.  Yet, for a person who did not have insurance and chose it only when there was an incident they expected to occur, is this not adverse selection which affects the entire group.  Yet our government feels there should not be any such clauses involved.  Would that not increase our insurance rates?


It is interesting that today it is stated that higher taxes will be paid by the middle and upper class sectors.  But where are the business economics while the government is working toward socialism?. There have been warnings for years like checking Fannie Mae and Freddie Mac because there were many discrepancies.  Yet no one wished to do so.   I think our Democratic Congress must have been sleeping through more than one session for a long time. 


If anything will come out true , it is the fact that in this administration through its many promises which may not be upheld, will allow people to take off their blinders to those who are smooth politicians.  Now you mayl see through those who have fabricated and who have placed on their blinders for financial reasons and who point their fingers at others rather than to ask themselves, could I have made a difference if I would have stood for what was right?.  After all, it seems the average person has forgotten 9-11 and other acts of terrorism against this country.  All who may criticize former President George W Bush will have to admit, he kept our country safe. And it was not only on his watch that another great president decided to protect our country’s values in the Middle East. 


It is easy to criticize the CIA, the FBI and the Military but please take off your blinders, each are protecting America under the Commander and Chief.  And after all, isn’t it nice to hear that not only can you lose your financial security in the stock market, you no longer have the ability to leave an estate to your family members in tact because the government has plans to secure even more money from your estate?


And we are upset with the Bank Bail-Outs.  But before you point a finger and blame others, consider some of the things which have caused the fall and there is much material on the internet or in the news whether in some cases biased or not you will be able to come to your own conclusions..


Some things which are not mentioned so explicitly (relating to tax deductions) which the government was in control of are tax credits on mortgages which dropped down from the original 100% deduction; eliminating the tax credit for credit card interest (Wouldn’t people take heed to the expenditures if they had to list them on their taxes each year…by checking out the amount of interest, wouldn’t it make you stop charging even if you had a large balance?) and dropping the moving credit if you are moving to another location to get a better job or some form of employment..  Many people have to use their last dollar to move to seek employment elsewhere and one might as well stay in the city you are in, within the poverty line, because if you expend your last dollars to move, there will be no credits given any more.. 


Even the credits given for paying out medical insurance or for services have been lowered from the past.  So in essence my friends, we have allowed our congressional people raise our taxes even in the smallest of ways and not protect those who took loans out to afford housing and to raise the GNP, but who would lose in the long run because they would be unable to pay the high mortgage balloons.  But we love those who may speak eloquently and we certainly favor someone who tells us optimistic things, rather than one who stems from reality.  Let’s face it we can always sway to someone we feel can assist us in some way.  It is simply the nature of things.  But we know how to think for ourselves and we have brilliant people in this nation who have chosen not to be in the political arena but have a voice, whether it is to get rid of a public official who has not kept promises, whether it is to give business ideas or whether it is one who just supports others to provide additional suggestions and make the world a better place.


And since you have probably guessed, I have been in the insurance industry for a number of years, specifically that pertaining to property and casualty products.  For this reason, you are going to hear a further blurb from me relating to the AIG.


The AIG has been a leading US based international insurance and financial services organization. I commended the AIG for its innovative solutions in property and casualty insurance arena in my book, especially pertaining to the pollution side of insurance.  They came forward to help in the insurance arena whether it was pertaining to the products insurance crisis, the pollution crisis or providing specialties such as aircraft and other instrumentalities of transportation insurance.  They further assisted business with wrap-ups in a time of  construction defect claims to assist America’s business to retain growth, whether in the United States or Worldwide.


In 1919 CV Star formed the American Asiatic Underwriters (AAU) in China specializing in fire and marine coverage; In 1929 Asia Life Insurance Company marketing life insurance to the Chinese was founded.  In 1926 Star opened a new York office called American International Underwriters (AIU); In the 1930’s, the companies expanded worldwide through markets in Europe and Latin America and by 1939 the headquarters were moved to New York City. At the end of World War II, AIU entered markets in Japan and Germany and the American International Life Insurance network spred through many of the same territories. 


In the 1940’s development included the incorporation of the Philippine American Life Insurance Company (Philamlife) in the Philippines, the formulation of the American International Assurance Company (AIA) and the reorganization of the Asia Life into American Life Insurance Company (ALICO).


By the 1950’s American International Underwriters, AIU was represented in approximately 75 countries around the world including key insurance markets in Western Europe, the Middle East, North Africa and Australia.


By the 1960’s, American International’s domestic property-casualty operations took on a new direction through American Home Assurance Company under its new president M.R. Greenberg.  American Home Assurance Company was transformed into a company which sold through brokers rather than agents concentrating on larger commercial and industrial risks as well as developing substantial reinsurance facilities, enabling it to write large shares of major risks.  By the way, if you have read my book, you should be aware that reinsurance is vital and that even such insurance as credit insurance is provided by private insurers.


During the 1960’s National Union, Commerce and Industry, Lexington and Transatlantic Reinsurance were acquired and are the basis of AIG’s current US Commercial insurance operations referred to as the Domestic Brokerage Group.


In 1967, the American International Group, Inc. was formed to hold the shares of the domestic companies and went public two years later with Mr. Greenberg as CEO.  AIU and most of its affiliated agencies and companies became AIG subsidiaries, establishing the modern corporate structures. And in 1984 AIGs shares were listed on the New York Stock exchange.  By the mid 1980’s AIG Companies had become the largest and by most measures, the most profitable underwriters of commercial and industrial insurance in the United States.


Also in the 1990’s AIG’s financial services group grew rapidly through such operations as International Lease Finance Corporation a global leader in leasing and remarketing the advance technology commercial aircraft.  Other principal businesses included AIG Financial Product Corp, AIG Trading Group and AIG Consumer Finance Group.  In 1999 AIG acquired Sun American and entered the retirement savings market and Imperial A.I. Credit Companies was formed and is now the largest premium finance business in the US and who was a leader in the broker and premium finance business in the US.


In 1999 AIG established the Asset Management Group to consolidate the growing global third-party asset management business of AIG including AIG Global Investment Group, AIG SunAmerica; John McStay Investment Counsel, AIG Prifvate Bank Ltd and AIG’s investment with the Blackstone Group and Emerging Market Partnership. 


The group’s operation included third-party institutional, retail and direct investment fund management as well as real estate management….Now do you understand why the financial group was so important to the government and when the local banks were tumbling down, it was a domino effect to the AIG?


The AIG also acquired a prominent boiler and machinery insurance company which has recently been sold as well as acquiring one of the largest life insurance companies, American General Life and Accident company who has provided financial security to millions for over 100 years.


So what happened when the bank bailout went through?  The general public was angry because of bonuses which were paid to executives or because trips which were planned in advance were kept. You all felt your money was being stolen and your children would have to pay taxes for ever.  Well AIG did not start the problem and the warnings given by others in power about the banking system were there for years.  No one acted upon the warnings and the banks just kept allowing credit without a base or surplus which is required in the insurance industry. .


I am very glad to hear a suit is being taken by a financial executive relating to bonuses which were promised because perhaps you will understand a bit more about how banking executives are paid.  Most such payments are made contractually that if certain obligations and events transpire, a bonus will be given.  Whereas, insurance agents and the people who provide customer service, loss control and underwriting are paid either based upon the commissions for business written or for wages for the services provided.


Being the CEO of a company no matter what industry is not easy.  You as the CEO are responsible for all operations from financing to the actual performance of a production line.  The position is volatile and it takes great intelligence to execute all areas of large corporations.  For those of you who are CEO’s even in small or medium sized businesses, you know the responsibility which you have, which includes the financial security of all employees under you to provide benefits, retain those who are beneficial to your company’s growth as well as providing profitability and retention.  Today, whether you are making a profit or not, you are or will be asked to provide benefits to all employees and yet you will be told that your taxes are to increase.  For those of you who still are managing under this difficult economic time, I commend you because many wish to take their money and run to another country.


Isn’t it funny, the insurance industry is regulated by each of the States as well as the Federal Government to retain certain surplus and to perform within the laws of the individual states  Even the SEC has responsibilities relating to fair competition and watching all corporations to perform as they should. If not, such companies are fined and may be requested to dissolve.  And who is the top man or woman who must make certain that all laws are adhered to whether through the individuals they hire or by his or her own expertise?  It is the CEO.


I ask myself, why on earth would anyone wish to take on the additional headache unless they were born to lead and had the expertise to do so today?.  The growth with many of these companies speaks for itself.  Yet, with today’s government posture, we have decided to not assist our businesses to allow free competition to hold our marketplace. We cannot afford to hire employees who may expand the growth of our nation.  Instead our employees and even some of higher management are hanging out in unemployment lines, whether good fair or ugly, but with a like problem..  There are no jobs, because our businesses have been regulated to the point that there are no longer retained earnings and yet with the promise to be taxed more.  Tell me current administration, just how will this facilitate jobs when business whether large or small are closing its doors daily?


But let’s get back to the AIG….it was not the fault of the AIG that they went down in the domino effect…and because they were the backbone of the financial community, there was great reason for the Government to have bailed out the AIG so that every bank and financial institution did not crash.  Some banks have tanked as it is and it is not just a problem in the United States.


My question mainly is that relating to your threats to hurt any employees of the AIG, even those within the property and casualty sector who have provided insurance to so many businesses.  Without insurance and reinsurance you would not otherwise have been able to secure insurance such as that covering superfund dilemmas, or explosive manufacturing hazards, underground tanks or aircraft or reinsuring companies involved in the 9-11 tragedy.  Instead these people are threatened.  You judge everyone to have been in a scheme, having received bonus money they did not deserve or who stole money from you.  Well that is not a fact. Many are just like you either working off commissions or trying to make a decent wage for the work performed and to support their families.  After all, in your mind, if it is not your fault, it has to be someone else’s for the economic failure. But we do have a choice of those who represent us.  Do we not?


Yet you state, your choices in officials have no bearing on what transpired and yet the Government does not have to respond to a balance sheet as business does.  You certainly must realize business is regulated by the government.  And, even those insurance benefits you have purchased are guaranteed by the State Insurance Funds at least for large part by your tax dollars, in the event of insolvency of a company.


Instead of our threatening others for the mistakes of others, we need to investigate where the problems started and work for a better future. We need to make our own educated decisions based upon a multitude of information available to us and the actual performance, not just the eloquent words someone is portraying.  And, that should be imposed upon our legislative leaders as well.  Those who do not understand some of the most simplistic elements of what we are today, should not be retained in office.   There are good and bad people in the world and as a person of logic, God gave you the insight to weed through difficult decisions.  But of course today I may be in trouble for believing in “God” and after all, we may be persecuted for being a Christian or a Jew or for having any faith in which we believe.


Of course, these opinions and beliefs are my own and the bases from which my decisions are derived are of my own fruition and should not be condoned to be that of the financial industry, the AIG or any other groups.  But it certainly does feel good to express my opinion after holding it so long with such anger and passion.  This did not start today and each of us are responsible, in part, for what has transpired?  And, do not believe for a second that our choices in the political arena did not have anything to do with this.  And this state of affairs started well before the Bush administration.  We need to learn from history and need to go back to the basic Business Economics which have made the United States of America such a strong country.  Least we will lose ourselves in some black hole.








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