ben s bernanke : american international group testimony by mr ben s bernanke, chairman of the board of governors of the us federal reserve system, before the committee on financial services, us house of representatives, washington dc, 24 march 2009. * * * chairman frank, ranking member bachus, and other members of the committee, i appreciate having this opportunity to discuss the federal reserve's involvement with american international group, inc. ( aig ). in my testimony, i will describe why supporting aig was a difficult but necessary step to protect our economy and stabilize our financial system. i will also discuss issues related to compensation and note two matters raised by this experience that merit congressional attention. reasons for our original lending decision we at the federal reserve, working closely with the treasury, made our decision to lend to aig on september 16 of last year. it was an extraordinary time. global financial markets were experiencing unprecedented strains and a worldwide loss of confidence. fannie mae and freddie mac had been placed into conservatorship only two weeks earlier, and lehman brothers had filed for bankruptcy the day before. we were very concerned about a number of other major firms that were under intense stress. aig's financial condition had been deteriorating for some time, caused by actual and expected losses on subprime mortgage - backed securities and on credit default swaps that aig's financial products unit, aig - fp, had written on mortgage - related securities. as confidence in the firm declined, and with efforts to find a private - sector solution unsuccessful, aig faced severe liquidity pressures that threatened to force it imminently into bankruptcy. the federal reserve and the treasury agreed that aig's failure under the conditions then prevailing would have posed unacceptable risks for the global financial system and for our economy. some of aig's insurance subsidiaries, which are among the largest in the united states and the world, would have likely been put into rehabilitation by their regulators, leaving policyholders facing considerable uncertainty about the status of their claims. state and local government entities that had lent more than $ 10 billion to aig would have suffered losses. workers whose 401 ( k ) plans had purchased $ 40 billion of insurance from aig against the risk that their stable value funds would decline in value would have seen that insurance disappear. global banks and investment banks would have suffered losses on loans and lines of credit to aig, and on derivatives with aig - fp. the

##oking around michigan today, i see all kinds of changes. some changes are to the production process, like the newest generation of robots. these communicate at lightning speed, using the same high - speed “ 5g ” technology as the latest phones ; utilize artificial intelligence to adapt to their environment ; and operate safely right next to workers on the assembly line. some changes are to design, like collision avoidance systems, sophisticated navigation apps, and the dozens of electric vehicles now on the road or coming to market soon. some observers look at these changes with trepidation. robot orders surged after the onset of the pandemic and have continued apace, a partial solution to the critical shortage of labor in manufacturing. 5 what does all this mean for production line workers? motor vehicle manufacturers have been the most intensive users of robots for decades. the first assembly line robot was rolled out in 1961 by general motors in trenton, new jersey. yet, the motor vehicle industry still employs more than 1 million workers, and its share of manufacturing employment has been going up since 2010. how did that happen? research has shown that workers are not just suited for a single job — they have a bundle of broadly applicable skills. when robots take over one task, workers are shifted to another task and, in turn, new tasks appear. 6 the set of tasks to perform is not fixed, a belief economists call the “ lump of labor fallacy. ” rather, we need production workers to work with the new equipment and to focus on the problem - solving according to the quarterly survey of plant capacity, over 40 percent of manufacturers report difficulty hiring workers, triple the rate before the pandemic. the association for advancing automation reports that as of 2022 : q3, orders were 50 percent higher than two years earlier. see david h. autor ( 2015 ), “ why are there still so many jobs? the history and future of workplace automation, ” journal of economic perspectives, vol. 29 ( summer ), pp. 3 – 30 ; daron acemoglu and pascual restrepo ( 2020 ), “ robots and jobs : evidence from u. s. labor markets, ” journal of political economy, vol. 128 ( june ), pp. 2188 – 244 ; gilbert cette, aurelien devillard, and vincenzo spiezia ( 2021 ), “ the contribution of robots to productivity growth in 30 oecd countries over 1975 – 2019, ” economics letters, vol