The former AIG Chief who ran the company for 4 decades is speaking out and says the Bailout doesn't work. Greenberg left the company in 2005.

I've been saying it for months -- Credit Default Swaps should be illegal and was for 80 years - and it  IS what brought our economy to it's knees.

Here's what Greenberg had to say - and is going to Congress to tell them (from a CNN article today):

"Under Greenberg's tenure, AIG Financial Products ventured into credit default swaps, insurance-like products sold to banks and others who wanted to backstop their securities and bond purchases. Many of the AIG default swap contracts were sold to insure mortgage-backed securities that have plummeted in value.

Greenberg said his successors should have scaled back their issuance of credit default swap contracts on subprime loans after the company lost its top-notch AAA credit rating. Instead, Greenberg said they ramped up that business and took on unhedged risk, which ultimately brought the company to its knees.

"I think they got greedy and they wrote considerably more business than they should have," Greenberg said.

AIG wrote more credit default swap contracts in the nine months after he left than it had during the last seven years of his tenure, Greenberg claimed.

The loss of AIG's top rating "should have been a signal to quit writing credit default swaps and hedge the book," he added.

Lawmakers are expected to prod him about his involvement in the factors that led up to AIG's demise. Congress is still seething over the $182 billion bailout, as well as bonuses AIG paid to employees who worked for the same unit responsible for the company's risky behavior.

Towns emphasized to members to avoid the lynch-mob mentality, like the kind that lead to Congress to taxing AIG bonuses.

"I would urge my colleagues on the committee not to move too quickly to reform the financial sector without first fully understanding this financial meltdown," Towns said."

$182 Billion is less than half of what AIG wrote down on Credit Default Swap business -- over $400 Billion.

You try to tell everyone you owe money to that you are only going to pay them half of what you owe them -- see how long you survive.

This was a band-aid on a severed leg.