We’re all furious. You, me, the Feds, pundits and politicians. And that anger is not helping. In fact it is clouding our vision – and may well cause us even more harm.
Every minute we spend screaming about AIG’s bonus plan is a minute not spent on fixing the company up to sell off assets. Every ounce of energy spent on this is wasted.
I don’t know the details of the plan or how execs who left could still be paid or what the restructuring of the plan looks like (other than pushing half the payouts off and subjecting them to performance metrics). I do know the execs primarily responsible for the disaster are long gone and bonuses are being paid to those trying to clean up their mess.
I am quite sure everything possible is being done – within the law – to ensure our dollars are not used unless there is no other option.
Passing punitive legislation, faulting Geithner, citing changes in AIG’s condition, all miss the point. That point is we need to fix AIG so we can sell off AIU holdings, Alico, the auto business, and the rest and thereby recoup taxpayer dollars. To expect a Treasury Secretary dealing with the greatest financial crisis in eighty years to know every detail about the bonus plan at one division at one company is ludicrous. Trying to tax these bonuses when most are paid to people that don’t even live in the US is political grandstanding of the worst kind. Trying to weasel out of the contracts using tenuous arguments will do nothing but tie up AIG in litigation for years, likely extending the time it takes to wind down this operation and get our tax dollars repaid.
As I said Monday night on Nightline, the AIG Financial Products execs should not take the money and their decisions to do so (if in fact they have) are reprehensible. They are being rewarded for a monumental level of incompetence.
I’m disgusted, shocked and dismayed.
I also want my money back and if we have to pay these incompetents to recoup tens of billions of dollars to do that than I’ll suck it up.
Mar
18
Joe, we have to scream about AIG’s bonus issue, for a very important reason. The Sec’t of Treasury, the man who is supposed to “fix” the economic shape of the country and help bring back these companies is a clown. Initially, he had stated that he and his legal team thought it would be “legally difficult” to prevent AIG from paying the bonuses because they were required by contracts. Now that it has happened, he is screaming bloody murder. Come on! This is a joke. President Obama has stated that the American people must get over their fear of the economic situation. We all agree, problem is, kinda of hard to have any confidence in a system that has Geithner as Sec’t of the Treasury during these times.
Also, the bonus to people that are suppose to be cleaning up the mess, as you say, well many of those recipients do not even work at AIG any more.
I have mixed emotions. One of these jokers may have actually REDUCED the potential losses by the work he/she did.
For example, if by reducing a loss from $100 million to $50 million…should they deserve a $1 million reward?
Maybe…assuming that they were not the cause of the situation themselves.
You think that we should get over the AIG bonuses?
I’ll get over it when all of the bailout money is either used for actually assisting AIG to get back on its feet or when the bonuses are taxed at the 100% level so that the Federal government gets its money back.
If you give your kids money to buy needed items and they spend it on toys, do you pat them on the head and tell them that it’s OK because they had a rough day?
Get over it? I don’t think so.
Well, for once (outside of basic insurance issues) I find myself in total agreement with Joe. Look, I fully understand everyone’s frustration with this. However, these bonuses were contractually entered into in some cases a long time before the current meltdown. The people who are the beneficiaries of these were promised these by AIG. To deny them payment at this point seems crazy. You don’t think that these people would sue? Heck, it’s the American way. And, defending that is going to cost a lot of cash and who’s going to pay for that? You think you’re peeved now?
Joe, I really like you and I understand that as a partisan Democrat you need to stand up for the administration including Geithner. But what twists my knickers is the outrage from Washington including Senator Chris Dodd, Representative Barney Frank, Treasury Secretary Geithner and even President Obama. Especially Geithner. He didn’t even pay his full taxes, so it’s not like it’s his money going out the door is it? Look this whole thing has been a complete botch from the word go. You can blame both the Bush Administration here if you want to. But President Obama’s outrage is somewhat manufactured as well. President Obama and his economic advisor, Larry Summers, were told of these details last year as part of the transition. There is a provision (interestingly enough called the Dodd Amendment) in the funding bill that Senator Dodd put in to guarantee the payment of these bonuses. In addition, Dodd’s story is that the Obama Administration knew of it and in fact advocated for it. I think if Geithner would fill out his Treasury Department, he would have the resources to tell him what to do next. I honestly don’t put all this on him, but Joe, He’s. Not. Helping.
So I understand if all us “little people” (read taxpayers) get frosted—yes, it bothers me as well. But when I see anyone with Senator, Representative, Secretary or even President in front of their name get outraged, well… I for one would dearly love to see an investigation into how this all got started in the first place with Congress pressuring lenders to suspend lending rules, how Congress, who was supposed to be the oversight of Fannie Mae and Freddie Mac dropped the ball when even Bill Buckner could have seen what was coming.
Look, what should have been done last year was to declare AIG in bankruptcy under government supervision. That way all prior contracts would be declared null and void and led to an orderly dissolution of AIG’s assets and properties. But, this is just bungling at its worst. And what it tells me is that government should not run anything because government cannot run anything.
Including and especially healthcare.
I don’t like it one bit, but you may be right that there’s nothing we can do about the AIG bonuses. What congress can and should do, however, is pass legislation regulating all financial sector compensation. The system of “bonuses” making up the better portion of take-home pay just isn’t sustainable. Especially now that we can all see that these bonuses aren’t indexed to performance or anything else transparent.
Also, shouldn’t antitrust laws be able to take care of AIG? If you’re too big to fail, I’m guessing you’re too big to not be broken up and sold for parts.
Wow… a 90% tax.
I think THAT is the REAL STORY here. The bonuses are now small potatoes wouldn’t you say ?
If as Joe and others point out that the bonuses were contractually awarded and there were no provisions regarding the bonuses in the bailout – what gives our elected government officials the right (or the sheer balls) to take 90% of that money?
My concern is now where will the tax buck stop?
http://www.latimes.com/news/nationworld/nation/la-na-aig-house20-2009mar20,0,6811276.story
“The House measure, hurriedly drawn up on the orders of the Democratic leadership, would impose a 90% tax on those who were paid bonuses at AIG and other firms that received more than $5 billion in federal bailout funds.”
Can we increase the tax paid by our governors and senators too ? I’d say start the bidding at 90%…