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• Case | HBS Case Collection | 2013

  AIG and the American Taxpayers (A)

  Karthik Ramanna and Matthew Shaffer

  Explores the decision faced by AIG's board on whether to join shareholder and ex-CEO Maurice Greenberg’s lawsuit against the U.S. government. The suit, argued by super-lawyer David Boies (of Bush v. Gore and California Gay Marriage fame), claims that in September 2008 the U.S. arbitrarily set aside the rights of AIG's shareholders—violating the Fifth Amendment by taking private property without just compensation—while preserving shareholder rights in other troubled financial institutions, including Goldman Sachs whose ex-CEO was the then Treasury Secretary. The U.S. government moved to dismiss the case arguing that it has wide discretion in times of crisis, but a federal judge allowed the suit to proceed. The case raises two issues central to understanding capitalism: (1) the importance of and limits to property rights; and (2) the role of the state in choosing between varieties of capitalism, here between oligarchic and entrepreneurial capitalism.

  Keywords: financial institutions; Financial Markets; financial crisis; property rights; Financial Institutions; Financial Markets; Financial Crisis; Property; Insurance Industry; United States;

  Citation:

  Ramanna, Karthik, and Matthew Shaffer. "AIG and the American Taxpayers (A)." Harvard Business School Case 113-124, April 2013.

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• Supplement | HBS Case Collection | 2013

  AIG and the American Taxpayers (B)

  Karthik Ramanna and Matthew Shaffer

  Explores the decision faced by AIG's board on whether to join shareholder and ex-CEO Maurice Greenberg's lawsuit against the U.S. government. The suit, argued by super-lawyer David Boies (of Bush v. Gore and California Gay Marriage fame), claims that in September 2008 the U.S. arbitrarily set aside the rights of AIG’s shareholders—violating the Fifth Amendment by taking private property without just compensation—while preserving shareholder rights in other troubled financial institutions, including Goldman Sachs whose ex-CEO was the then Treasury Secretary. The U.S. government moved to dismiss the case arguing that it has wide discretion in times of crisis, but a federal judge allowed the suit to proceed. The case raises two issues central to understanding capitalism: (1) the importance of and limits to property rights; and (2) the role of the state in choosing between varieties of capitalism, here between oligarchic and entrepreneurial capitalism.

  Keywords: Financial Markets; financial institutions; financial policy; property rights; Financial Institutions; Financial Crisis; Financial Management; Insurance Industry; United States;

  Citation:

  Ramanna, Karthik, and Matthew Shaffer. "AIG and the American Taxpayers (B)." Harvard Business School Supplement 113-125, April 2013.

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• Case | HBS Case Collection | 2012

  A Politician in a Leather Suit and the Paradox of Japanese Capitalism

  Karthik Ramanna and Matthew Shaffer

  Two lost decades later, capitalism in Japan embodies peculiar contradictions—preserving wealth and social stability in the face of declining economic power. Scant transparency in Japanese corporate practices plays an important role in this phenomenon. Sometimes justified as an embodiment of Japanese culture, the opacity of Japanese corporations is credited with empowering managers to make long-term business decisions that preserve employment and business relationships and maintain social harmony. But opacity also facilitates fraud and corruption, which erode investor confidence and stifle risk-taking. A flamboyant politician Kotaro Tamura attempts to raise public awareness around these tensions, but his provocative style earns him few friends in Japan's conservative political establishment.

  Keywords: Crime and Corruption; Economic Systems; Economic Slowdown and Stagnation; Fairness; Values and Beliefs; Corporate Accountability; Corporate Governance; Civil Society or Community; Japan; Tokyo;

  Citation:

  Ramanna, Karthik, and Matthew Shaffer. "A Politician in a Leather Suit and the Paradox of Japanese Capitalism." Harvard Business School Case 113-026, November 2012.

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