Democrats & Liberals Archives

How Much Has AIG Cost You Personally So Far?

I read some excerpts today from an interesting letter sent by Edward Liddy, Chairman of AIG, to Timothy Geithner, US Treasury Secretary. They paint a clear picture of socialism for the rich.

In the letter, Liddy wrote that 'AIG's hands are tied' regarding the hundreds of millions of dollars it would be paying out to employees in bonuses for 2008. However, he carried on, AIG 'would do its best' to cut these bonuses by 30% in 2009. Do its best? My six-year old 'does her best' with her spelling... Edward Liddy is the Chairman of the biggest corporate failure in world history, and all he can say is that he'll 'do his best'?

So far, AIG has received $180 billion in taxpayer money to keep these people, whose mismanagement and dubious practices (read: fraud) have brought the corporate giant to its knees.

Now $180 billion is a hard sum to comprehend, at least for me. So I did a quick calculation to figure out what my share of that was.

Turns out, the management of AIG have cost me - ready for this? - SIX HUNDRED dollars. They've cost my wife SIX HUNDRED DOLLARS. My son, SIX HUNDRED DOLLARS. My daughter? Well, you probably get the picture.

So my family is in the hole for $2,400.00 thanks to Edward Liddy and his cronies. And that's just one firm. Remember also that we don't actually HAVE this money, we're borrowing it. So figure in interest at 10% over the 30 years it will take to pay it off.

I don't know who to blame in government for this fiasco and, frankly, outrage. Do I blame the Republicans for thinking that people with access to billions of dollars in private money would simply do the right thing? Do I blame the Democrats for trying to get us out of this mess in a way that absolutely appalls me?

Or do I blame Edward Liddy, whose best simply doesn't seem to be good enough... but whose company is still paying out hundreds of millions of dollars in bonuses.

No. I blame all three. Shame on you.


Posted by Jon Rice at March 15, 2009 12:25 AM
Comments
Comment #277702

Jon Rice
“Do I blame the Democrats for trying to get us out of this mess in a way that absolutely appalls me?”
If you are refering to the AIG bailout specifically then the answer is no. That deal was struck with a Republican administration. Remember them? It is the Democratic administration that is putting pressure on Liddy to curb the practice.
I hope congress acts to tax such bonuses at about %200 or so. I read that 6 of the executives scheduled to recieve bonuses are declining them. My guess is that a %200 tax would convince the others to be so selfless.

Posted by: bills at March 15, 2009 7:35 AM
Comment #277705

How bizarre is it that they are “contractually” required to pay bonuses even when the company fails and has to be bailed out? They need another lawyer.

Posted by: womanmarine at March 15, 2009 8:42 AM
Comment #277709

Are they truly bonuses if they are contractually required to pay them? If they are not performance based isn’t it called salary?

Posted by: j2t2 at March 15, 2009 11:35 AM
Comment #277715

This is sick. Why in the world are we helping these companies that keep sending millions to people who do not know how to run a company? They cry yet get paid millions on the “average joes” taxes. Furthermore, I fear this is just the tip of the iceberg. Look what Enterprise rent-a-car did to get bailout funds:


http://www.butasforme.com/2009/02/25/alert-enterprise-rent-a-car-may-have-fired-employees-as-fake-evidence-when-lobbing-for-bailout-money/

Posted by: jax at March 15, 2009 12:19 PM
Comment #277718

J2T2:

Well, it’s being called bonuses. What else are we supposed to think?

What are these companies thinking? What is congress thinking?

Disgusting, all of it.

Posted by: womanmarine at March 15, 2009 12:41 PM
Comment #277726

What do the voters/tax-payers expect from perpetual 85%-to-90% re-election rates?

Congress also gave itself its 10th raise in 12 years, and $93,000 for petty cash and expenses. Cha Ching!

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at March 15, 2009 1:56 PM
Comment #277728

Addendum to above posting:

According to CNN, ‘Liddy said the company will have trouble attracting and retaining “the best and the brightest … if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.”’

Retaining the best and brightest? Since AIG clearly has neither, what are the bonuses really for?

Posted by: Jon Rice at March 15, 2009 2:11 PM
Comment #277729

Bills, gets it. Everyone else, take note:

Contracts, including those for bonuses have the force of law behind them. If the CEO’s or Boards of Directors arbitrarily breache those contracts, the bonus recipients may sue in court, in all likelihood win, because our courts MUST uphold contracts if our society is to function peaceably at all, and AIG will then incur the costs of those lost law suits easily equaling or exceeding the bonuses. Are we a nation of laws, or not? A highly debatable question in the face of circumstances such as these at AIG.

AIG is the pinnacle example of a product of the repeal of the Glass Steagal Act, which would have prevented a financial institution from becoming involved in insurance, international investment banking, retirement services, asset management, and other financial services (including financing commercial aircraft leasing) in more than 130 countries. In otherwords, had Glass Steagal Act or comparable protections been in force from the Clinton era, AIG would not constitute the threat it now poses to our entire economy. We could afford to let if fail as ONLY an insurance company, sell its parts off in bankruptcy court, and move on. But, the Gramm-Leach-Bliley Act, a primary example of history repeating itself due to ignorance of history, became a reality and AIG now threatens the viability of not only our economy but our government as well as it takes on the task of underwriting AIG’s losses to keep the economy from grinding to a halt.

AIG with all it subsidiaries tentacled throughout the balance sheets of so many other financial institutions, is the classic definition of a corporation grown TOO BIG TO ALLOW TO FAIL, due to the fact that if it fails, 100’s of other financial institutions chained and dependent upon it, would in turn fail as well. And this would cascade into a wider circle of smaller institutions dependent upon AIG’s dependents, failing as well, in a domino effect.

There is no clean, simple, effective, and common sense solution to preventing this domino effect from collapsing the heart and arteries of our economy, credit and repayment of debt. If the economy fails, the circle of people defaulting on their credit card debts, auto loans, homes, student loans, small business loans, ripples throughout our entire society grinding the pace of economic activity down to that of a snail.

And reducing government revenues by half and more in coming years, creating insecurity and fear amongst the American government’s creditors, who in turn will stop lending to the U.S., and worse, begin to demand payment from a bankrupt government whose only option to pay is to print money out of thin air, adding hyperinflation to a new Greater Depression.

There is a path that potentially avoids, in the foreseeable future (10 years) these calamities. It is one which requires insuring the financial institutions do NOT fail and keeps them from defaulting on their obligations, while at the same time maintaining and eventually stimulating the consumer demand economy back toward growing employment instead of unemployment, which in turn will increase federal government revenues.

This requires someone to step in with a few trillion dollars to make this happen. The only entity with the capacity to produce a few trillion dollars is the federal government. Is it guaranteed to work? No. But, refusing to try to make it work is guaranteed to bankrupt our government and throw workers out of jobs in numbers not even seen in nightmare scenarios before.

Our best option is to try, support, expect, and demand that these efforts work. And hold those responsible for making it work, accountable on election day.

And yes, if we are successful in preventing an economic meltdown resulting from the financial community balance sheet black hole, we will then face the crises of debt, inflation, and their mitigation, in conjunction with insuring the continuation of a healthier economy with low unemployment into the future.

The very most fundamental requirement in meeting those challenges will be developing and agreeing to stick to a plan to manage those challenges. Just as a paddler in a canoe heading upstream will make no progress if they paddle hard for two miles progress, and then rest while the current takes them back two miles, switching parties from Republican to Democratic back to Republican will guarantee failure in meeting those crises, as these parties will reverse each other’s plan and direction.

Hence, it is essential that a plan be developed which the American voters can understand, embrace, and hold future elected politicians to, regardless of their party or political persuasion. That is going to prove to be the tallest order of all in saving America’s future. And it will require a great communicator equal to or exceeding the capacity of FDR or Ronald Reagan. I see no one in the political realm at this time more qualified for that role than Barack Obama.

Whether Obama’s administration can develop a viable long term strategy to overcome the challenges ahead which the American public can understand and embrace and adhere to, is of course the question which cannot be answered at this time. Only time can answer that question.

Posted by: David R. Remer at March 15, 2009 2:24 PM
Comment #277732

David R is right about the contracts. We should not be too shocked - shocked - about them.

I believe in carrying out contracts and keeping your word. However, you can believe that the government will be pressuring the UAW and others to accept lower amounts.

I really don’t understand this. You have a Democratic congress and a Democratic president who recoil at the idea of not paying bonus to rich guys whose bad decisions helped ruin their companies. It looks like the big campaign bucks they got from the investment bankers pays dividends.

Don’t you usually get a bonus for doing something good? I guess our leaders in congress cannot understand this concept. It doesn’t sound like much of an incentive if the bonus is locked in no matter what you do. Meanwhile, they will allow the workers to get kicked in the rear.

I know there is much rhetoric to the contary. I saw Barney Frank (if you cannot be truthful, be Frank) on the news. He and others like him (Maxine Waters, Christopher Dodd) bellow a lot, but seem to have developed a nefarious alliance with the moneymen.

This is how it seems to work. Frank and the team yell loudly in order to distract the taxpayers. Meanwhile they funnel the big bucks to the rich guys. The rich guys act contrite all the way to the bank.

Business as usual in Washington.

Posted by: Christine at March 15, 2009 2:45 PM
Comment #277738

Is AIG the private sectors Katrina?

Remember President Bush telling Mr. Brown what a good job he was doing? So it seems that the leaders of AIG and the Private Sector are telling its Managers that they are doing a good job even when the pictures on TV tells the Public a different story.

Yes, they can stand on contracts and have David defend them in court; however, seeing that “We the People” hold well over the 51% of the Stockholders Voting Power I wonder if the time has not come to exercise the right of the Investor. For I wonder how many of these Employees would take a bonus if they were to be reviewed on their profromance under their contracts.For why I am sure that David and other Lawyers can defend the bonus based on certian reports in the company, but I doubt that any Lawyer could or would try to defend these employees actions as bring Profit to the Stockholders.

Now, should Congress rewrite the Law so that Individual Profromance outweighs the right of a Corporation to make a profit for their Stockholders? IMHO, I do not think so. In fact, like Mr. Brown found out while you can blow smoke up your bosses butt getting past the watchful eye of the Public is not so easy.

Posted by: Henry Schlatman at March 15, 2009 4:40 PM
Comment #277741

You’re right about the Katrina comparison, Henry, and more bloated bodies are floating to the surface and are stinking!

Posted by: jane doe at March 15, 2009 6:28 PM
Comment #277742

There is another way to do this.

Bailout could be formed in such a way to be like receivership, abrogating all contracts and replacing current management.

In the depression, the RTC dictated terms of bailout.

Nationalizing companies rewrites all contracts and obligations. Undo fear about the appearance of nationalization may well be a mistake.

That all being said, retention bonuses are meant to keep talented people, but given a slumping market, one might find that talent may not have as many options as in the past.

Posted by: gergle at March 15, 2009 6:51 PM
Comment #277743

That’s right. It is unconstitutional to try to force private corporations to not be greedy.

Posted by: d.a.n at March 15, 2009 6:52 PM
Comment #277746
You have a Democratic congress and a Democratic president who recoil at the idea of not paying bonus to rich guys whose bad decisions helped ruin their companies.

So not true. You apparently haven’t read what is going on, and the questions being asked by the democrats here and in congress.

What we do recoil at is breaking contract law.

Posted by: womanmarine at March 15, 2009 7:28 PM
Comment #277747

Womanmarine

The Democratic commitment to contract is certainly admirable. To what do we owe this new found conservatism? I guess it is easy to be idealistic and for change when you are don’t have to do anything in the real world. And they are not going to challenge the contracts or even really check into them. How nice. It looks like the Democrats roll over when the money masters tell them. Standing up to the moneymen is change they don’t believe in.

On the other hand, they want to force mortgage lenders to change the terms of their contracts and they seem to have no trouble with making unions renegotiate contracts.

Why the roll over for the rich guys on Wall Street and in the banks?

Let me expand on Gergle’s point. Are they really so valuable? Where are these former masters of the universe going to go? It is not like there are lots of job opportunities right now. There is a lot of talent floating around these days. What do we really care if the guy who drove his bank into the ground quits to look for a new job? There will be a new crop of MBAs in a couple of months. Maybe it’s time for a change.

I repeat – I always thought you got a bonus because you did a reasonably good job in times when the company was doing well.

If I borrow money from you so that I can give bonuses to my friends, are you okay with that? And let’s get rid of that fiction that they are using different money. The reason money is so useful is that it can be used for every kind of purchase. It doesn’t change if I put it into a different pocket.

Posted by: Christine at March 15, 2009 8:00 PM
Comment #277749

Christine:

Interesting that you would imply that the contracts are somehow illegal or changeable. Apparently those terms weren’t in the bill? Wasn’t this the bill GW begged for? Perhaps they have already been looked into?

One thing I’m not doing is trying to make assumptions to fit my agenda.

Posted by: womanmarine at March 15, 2009 9:01 PM
Comment #277750


We have two choices, we can borrow the money from the unborn, pay the piper and go on living our la la land lives or we can face the music and suffer the consequences of cleaning up the mess we created.

I think we all know what we are going to do because we have already started doing it.

How much has AIG cost you personally so far? Nothing at all. It will be another two or three decades before the bill will arrive.

Posted by: jlw at March 15, 2009 9:26 PM
Comment #277752

Womanmarine

You are assuming that they cannot renegotiate the contracts. Most contracts are open to negotiation when a large unexpected force affects all the parties. It does show how screwed up these places are if bonuses are guaranteed in advance by force of contract.

Pelosi, Waters, Frank and Dodd get very indigent when they are doing their hearing. They sound so fierce and look so good on TV. But their words are meaningless to the real insiders. They are all just playing their parts in the scripted drama. The brave political leaders rave , bluster and show their teeth for the cameras. They are the avenging angels. The rich guys look guilty and play the villain role. Then they all go home and split up the money and laugh at how well they fooled the taxpayers.

These kinds of people may speak for the people, but they work for the moneymen.

Posted by: Christine at March 15, 2009 10:31 PM
Comment #277754

Christine,
Why Congress may have to deal with the moneyman in order to obtain the funds necessary to help the people from losing their money and investments. I think you are confusing Americas’ Elected Officials need to be Politically Correct with their desire not to watch the World fall apart.

For why the exact history evades me right now. I do believe if you look back at the Dutch and the Bank of England in the 1600’s that you can see why President Obama and Congress would rather talk some sense into the leadership of AIG instead of use their Authority to force the wishes of the people.

Since simple put, can you see a World with no insurance or worse yet the governments controling that sector of society.

Posted by: Henry Schlatman at March 16, 2009 12:44 AM
Comment #277756

Dear American Friends;

I just happened on your debate here and cannot help but to ask you a question: Where has the American sense of right and wrong gone - and common sense for that matter? Where is the legacy of the Boston Tea Party? In old Europe they would throw thieves of the public purse from office windows (defenestracion) with a big pile of manure under the window - upon arrival the crook joined the material he was made of, while in America today self-entitled psychopaths at AIG are getting 165M om “bonuses” ???? Not exactly progress in my books.

The AIG guys are plainy spitting America in the face because they believe that they have you by - ehm - you know what. You can take into the streets, millions of you and stop these “contracts” by means of public opinion pressure, but there are no Americans demostrating in the streets of New York and Washington. Looks like America has become lobotomized like Jack Nicolson in Cookoo’s Nest. You are being stolen from in an unprecedented way - and you are just “wondering” ?

Is this everything that is left of once inspiring America, you cannot even get really m a d ?

Posted by: canada friend at March 16, 2009 1:38 AM
Comment #277757

Please slow down…these contracts are being looked into for their validity as we speak. If they were drawn up in a time frame that would make them invalid, or if they were drawn in such a way they can be invalidated, it will happen. Meanwhile, if we toss them just because we don’t like them, we disenfranchise the rule of law. No one in their right mind wants to do that, no matter the monetary cost. Once the rule of law goes out the window, so goes the window.

Posted by: Marysdude at March 16, 2009 7:55 AM
Comment #277759

Dr also has it right. Sort of.
“Our best option is to try, support, expect, and demand that these efforts work. And hold those responsible for making it work, accountable on election day.”’

Great but lets not get confused here. The people responsible for making it work ARE NOT THE SAME PEOPLE THAT CREATED THE PROBLEM! No one is real thrilled with having to do this. Problem is we have to fix it. There is a danger that BHO and the Dems will be blamed for trying to fix it,guilt by association I suppose. Even if they do a sterling job of fixing the credit system there are bound to be mistakes. There are bound to be mis-steps and missed opportunities. The only way to avoid mistakes is not to do anything. As we have learned from the GWB regime,that is the biggest mistake of all.We managed to elect probably the best possible president to clean this mess up. He needs the support of every American to make his task easier. He needs support and also the benefit of a doubt. The steps necessary will gain him criticism from all quarters. We should not hesitate to jump to his defence when those criticisms are unwarrented or short sighted and not just in our little protected blogland. One tack I will bet money we will see is the the Y2K fallacy again. Remember those folks that were upset about all the money wasted fixing Y2K when after all ,nothing happened? If that happens we will know BHO has succeeded.

Posted by: bills at March 16, 2009 8:59 AM
Comment #277760

Off thread some but here is a heads up from the Philippines. The Philippine government is in the process of defineing their territory. This not a simple project as there are about 7000 islands involved. They are having a dispute with China over a small chain. Rather than wait for international law to decide the question, China has dispatched one of their most advanced navel vessles to the area. The RP has a small navy but is a staunch allie of the US. Expect to hear about this in the MSM in a few days. Wasn’t it Biden that expected BHO to be tested? China appears to be getting testy all over the place.

Posted by: bills at March 16, 2009 9:21 AM
Comment #277762

I find myself agreeing completely with Christine here. A bonus implies some result worthy of same. Let the fatcat execs take AIG (i.e. the government) to court. They will be seen as the a$$holes that they are as they try to wrest their “bonuses” from We , The People. I have only worked for two weeks out of the last ten. I am terrified for my family’s future. No f%$#ing way should these people get this money. Did the Wachovia bank shareholders get paid for their stock wwhen the bank was sold? I don’t think so. A corporation’s job is to make money for the investors. That’s US. No profit, no bonus. End of story.

Posted by: steve miller at March 16, 2009 10:16 AM
Comment #277763

Christine,steve miller et al

Lets reiterate. It was NOT the BHO administration that cut the deal with AIG and they are pressureing AIG to change their policy. Without violating contract law the congress is capable of taxing the bonuses at %100 or even better ,%200. It won’t happen but what a deterent effect it would have.

Posted by: bills at March 16, 2009 10:36 AM
Comment #277765

The bonus payout excesses at AIG are just the tip of the iceberg of what is happening with the other Wall Street bailouts including Bank of America. Working productive Americans are bailing out the same crooks that destroyed our economy along with 45% of the wealth in the world and now the American taxpayers and our children will be forced to live a far lower standard of living with reduced prosperity and opportunities due to this but only we pay the price.

Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. Find out what a growing repudiate the debt movement could mean for treasuries, the dollar, gold and the stock market and how this is a better alternative than Washington’s plans to monetize the debt in future years and tax and destroy our remaining wealth by depreciating the dollar.

The Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is starting now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts

Posted by: Ron at March 16, 2009 12:38 PM
Comment #277766

Ron-
Repudiation of the debt would be a bad idea. We’re not in debt to the companies we’re bailing out, or to the receivers of the stimulus, we’re in debt to the folks holding treasury bonds. Repudiation would be effectively telling them to take a hike, and take the losses. Got any ideas on how we make these people lend us money after that?

The language at that site, though, strikes me as even worse. Calling something unconstitutional has become some folk’s shortcut for violently disagreeing with something, and then cutting them off at the pass by claiming constitutional authority for that rejection. Trouble is, who determines what is unconstitutional? The Courts. More to the point, how can an amendment be unconstitutional, if it’s properly ratified?

Too many people nowadays are trying to reargue the entire basis of our government, arbitrary to years of jurisprudence and any standard of current legal understanding.

All the years of hateful rhetoric and people taking it to heart has begun to create a serious risk of this country splitting in more than just opinion.

Posted by: Stephen Daugherty at March 16, 2009 1:03 PM
Comment #277779

Bill S.,
I’m fully aware that the Bush administration lobbied for, and passed, the TARP legislation. I don’t see how that bears on this, and I never mentioned whether or not it was Bush or Obama who had responsibility for the mess. It does not matter. What DOES matter is that we are getting, well, “porked” by AIG and others. I just read on Yahoo that 450 MILLION dollars was earmarked for bonuses for the financial services division of AIG. WTF?!?!?!?!?!?

I say again; no profit= no bonus. We have payed one hundred and seventy BILLION dollars to AIG. If we (the owners) were to declare them bankrupt, would that not nullify any contracts? This is not the time to make nice. It’s time to kick ass and take names. No more subsidizing fat cats with our $$$!!!!!

I say this again, too: let them not get paid their bonus, let them fight in court to get paid taxpayer dollars above and beyond their inflated salaries. Seems to me there’s got to be plenty of qualified people who would appreciate a high-paying financial services job.

Posted by: steve miller at March 16, 2009 3:36 PM
Comment #277780

And if they take the government to court, that involves court costs and more if AIG wins the case. Obama has people looking at the “bonuses” and what can be done about them. I’m not sure what else they could do, unless like has been suggested here, we just let them fail and take down the whole house of cards, to the detriment of the economy and the American people.

Posted by: womanmarine at March 16, 2009 3:40 PM
Comment #277782

Womanmarine,
An eighty percent stake in a company gives a lot of clout. It’s amazing what enough outcry will do to change a situation. Without even resorting to a forced reorganization. How many politicians have resigned over nothing more than political pressure and/or public “unrest” It’s time for some unrest. Why should executives of a failed organization be paid a bonus, ON US, above and beyond their already high salaries? If, as someone else already very rightly pointed out, the bonuses are not tied to production, then they are not bonuses. Where does it end if this flies? Time to put our foot down NOW. Once the bonuses are paid, we ain’t getting it back.

Posted by: steve miller at March 16, 2009 3:49 PM
Comment #277783

steve miller, your comment focuses on the trees and ignores what is happening to the forest. Obama’s admin is looking into recovering the bonuses, LEGALLY. Your comment seems to pose a Catch-22 for Obama, either he violates law and snatches the bonuses back, or he risks not being able to get them all back by observing the law, and your condemnation nonetheless. Obama refuses to be painted into your or other narrowly focused boxes which would prevent him from addressing the macro-economic issues of greatest importance at the moment.

Your comment is focusing on millions, when trillions are at stake. And that is fine, we should not lose sight of trees for the forest, either. But, saving the forest is worth the price of losing some trees, if that is what is necessary.

But,

Posted by: David R. Remer at March 16, 2009 4:16 PM
Comment #277784

“Insurance giant AIG is the poster child of corporate irresponsibility. It gambled on the housing market and lost, big time. That’s why the government had to dole out nearly $200 billion in bailouts just to keep the company afloat.

But word broke yesterday that despite being crowned the “Bailout King,” AIG is going to pay out more than $400 million in bonuses.

We’ve had enough. On Thursday, March 19, thousands of people nationwide will demonstrate outside major banks and demand real change. We want you to join us…

The outrage doesn’t stop at the bonuses. We finally found out how AIG has spent its bailout funds - it gave billions of dollars to other bailed out banks, including banks like Bank of America and Citigroup that are actively organizing against change for working families.

Just last week it was revealed that Citigroup organized a call to “build opposition to the Employee Free Choice Act.” Bank of America did the same thing just days after it received its first bailout from the government.

We have major banks and financial institutions taking government money with one hand, and slapping working people in the face with the other. The very same people who destroyed our economy are now actively working to prevent its recovery.

Enough. Join our demonstration against corporate excess on Thursday.

http://www.TakeBackTheEconomy.org

It’s up to us to take back our economy. We hope you’ll join our efforts.

Thanks for all you do.

In solidarity,

….
Change that Works
SEIU.org “

Posted by: bugger at March 16, 2009 4:39 PM
Comment #277794

Of course AIG paid those banks…they are the ones AIG had insured…??? What kind of knee jerk reaction is this anyway?

Posted by: Marysdude at March 16, 2009 6:30 PM
Comment #277796

bugger


“Just last week it was revealed that Citigroup organized a call to “build opposition to the Employee Free Choice Act.” “

you mean the intimidate your co worker by taking away the secret ballot act.

Posted by: dbs at March 16, 2009 7:23 PM
Comment #277799

David,
I wasn’t advocating illegal action. I am advocating putting enough pressure on AIG that they will renounce bonuses paid for by taxpayer dollars. I am trying to be part of the outcry so that what I wish to happen, happens. One way to do this at least quasi-legally would be to get AIG to withold the bonuses (again, with a liberal dose of pressure) in order to get the executives to file suit against AIG. A civil action. No crime.The likeliest outcome is that the execs would be reviled, by the entire country. They wouldn’t dare file suit. Do you have a problem with that? Seems like a possibility to me. Don’t underestimate the power of a truly pissed-off public.

I don’t feel that the outcry should stop based solely on the President “looking into” “legal” ways to get the money back. I’m certain that the company itself could be made to see the wisdom of denying the execs their bonuses.

Posted by: steve miller at March 16, 2009 8:22 PM
Comment #277803

The milk is already spilt but maybe we should have just allowed the company to go into bankruptcy and sell off their assets etc. Bonuses would likely not be a priority in bankruptcy court.

But then where would be the fun in that?

I’m not convinced that the folding of AIG would have bankrupted America. It’s just a corporation and if what Obama says is true, they badly mismanaged their business so why would we want to reward mismanagement (besides the fact that they reward mismanagement in government all the time).

And yes I am critical of Bush on this too.

Posted by: eric simonson at March 16, 2009 9:18 PM
Comment #277806

Who, Eric? Could you repeat that so everyone can hear?

You mean the guy’s on who’s watch this deal was made?

Ya think?

As to AIG being “just a company”, even though that ignores the reality of the situation, but that is nothing new, I give you Lehman Brother’s? It was a much smaller “company”. That worked out so well. Do you think that might have influenced Paulson’s decision?

Recievership is still an option. Prosecution is an option. There are many legal options, including force majur. Although, the last one may be a stretch.

Posted by: gergle at March 16, 2009 9:43 PM
Comment #277807

The BHO administration is in charge now and the Democrats control congress. It is their choice now. They should do the right thing instead of just shifting their share of the blame.

The American people should put enough pressure on the Administration and Congress so that they do the right thing. I would think Democrats would be on board. Ask yourself this: how would you respond if Bush and a Republican congress were doing exactly what the Obama and the Democrats are doing now? Now do just that.

Posted by: Christine at March 16, 2009 9:50 PM
Comment #277813

It amazes me that 9/11 was not President Bushs’ fualt to some of the same people calling for President Obama to accept responsibility for something that started before he was even elected to the Office.

However, faced with the aftermath and the growing outrage that the Poor Rich in America stil don’t see how their Ignorance of Money is causing more and more Americans to say “No More” I wonder if the Insurance Companies should not be allowed to fail. For Business, Housing, Health, and almost any other sector of society cannot say that they are protected today if the worse should happen.

So shouldn’t “We the People” pressure the Adminstration and Congress (i.e. Republicans and Democratic Leaders) to heavily regulate the Business Sector given AIG and others still cannot cover their own policies (contracts) with their client. For I ask if not writing an Insurance Policy that you know you and your company cannot cover broader on fraud?

Remember Katrina. Rita, and every other hurricane where the Insurance Companies failed to pay in full on the money collected by Individual Americans thinking that their Home Owner Insurance covered them. How much more money will the Poor Rich have to lose before they make their Democratic and Republican Civil, Political, and Religious Leaders address the real problemed caused by those in AIG and other Insurance Companies who are lead to believe that they are not irreplacable.

Posted by: Henry Schlatman at March 16, 2009 11:38 PM
Comment #277821

Eric
“I’m not convinced that the folding of AIG would have bankrupted America. “

Correct. It would have bankrupted the world. The banks here in the Philippines are in pretty good shape generally. They had a big shakout in the 90’s and saw fit to impose some pretty stiff regulation that has limited the damage. The weak spot is AIG. Lehman hurt but not that much. AIG underpins everything.Thats why we need to keep them solvent. Their failure would have serious global repercussions. What is at stake is the position of global leadership the US occupies.


All

I share the outrage. These people think they are so damned valuable. They are just bean counters. Thats it. They are not neurosurgeons or even good truck mechanics. They are just bean counters and apparently not even very good at that.
There have been efforts to give more say about executive compensation to the owners of these companies, the stock holders, for some time. Maybe that movement will get some traction now and we own %80 of AIG.
I still favor a special tax of %150-200 on any executive of a bailed out company that takes their bonus.Its well within the mandate of congress and would be a tax increase even likely to garner Republican support.

Posted by: bills at March 17, 2009 8:27 AM
Comment #277823

Bill,
I would go at least one step further if I was allowed to advise President Obama and Congress. For why the “Retainer Bonuses” are just the lastest in a string of excuses by AIG and others in the Financial Market. I would require All Bean Counters and Advisers to put up personal wealth up against the risk they ask others to take. IMHO thats accountability and better reflects Americas’ Principles and Standards of doing business.

However, I would settle for Congress to send President Obama a bill that will require AIG and all insurance companies hold the Treasury Reserve to start covering the worse case senerios even as Corporations of last resort. And beginning with the CEO pay I would tax all income above $250,000.00/year at 70% until such time the companies can prove to the Regulators and We the People that they are solvent.

Posted by: Henry Schlatman at March 17, 2009 9:02 AM
Comment #277825

Most ordinary citizens are against bailouts. And for once, I agree with the masses.

The experts say the failures will cause other failures and too many job losses. What they don’t account for is something better will form to fill the need. We cling to the past.

Posted by: Schwamp at March 17, 2009 9:52 AM
Comment #277849

Henry writes; “And beginning with the CEO pay I would tax all income above $250,000.00/year at 70% until such time the companies can prove to the Regulators and We the People that they are solvent.”

While I disagree with Henry’s prescription for private industry, I wonder if he would place the same heavy burden of taxes on congress, PO, and all government employees until our government becomes solvent. Now that would be a novel idea. Let’s also take a look at the salaries and bonuses paid to the administrators of Fannie and Freddie and every other government agency.

In addition, we could place the same 70% tax on all school personnel who receive federal funds, all contractors who win government bids, every governor and mayor who receive federal funds and…

Posted by: Jim M at March 17, 2009 5:41 PM
Comment #277857

Jim M.,
Why I have no problem in increasing the Federal Income Tax to 70% seeing that some on the Right have failed to learn why the lower 40% of Society are exempt by Law. I do believe that if the Private Sector of Society want to act like they are in charge of the Establishment than the time has come to step up to the plate and swing.

For why I do believe that the Children of the 21st Century would be shocked to see how illresponsible their Parents and Grandparents have been with the Nation left to them some 30 years ago. I set here amazed at how the Political Party of Authority are running away from the Principles and Standards that gave America a Welfare to Work Program in the 1990’s. Especially since the same thing could be accomplished in a Welfare to Profit Program for Americas’ Corporations over the next 4 years.

Posted by: Henry Schlatman at March 17, 2009 7:04 PM
Comment #277860

>The experts say the failures will cause other failures and too many job losses. What they don’t account for is something better will form to fill the need. We cling to the past.
Posted by: Schwamp at March 17, 2009 09:52 AM

Schwamp,

I think it is important only because of the massive extent of the damage that would likely occur. The bailouts are distasteful and it is at least possible they are unnecessary, but if you seek out possible world wide ramification, it becomes more clear why bailing out is better than allowing the market to fix itself.

There are already tent cities being erected, and more and more taking to the streets. This thing just got started, if we wait for natural cure, it will be far too late for those who are falling through the cracks. And, you think health care costs are huge now? Wait until the great unwashed grows to unmanageable proportions…disease will spread like wildfire. There ain’t no upside to waiting.

Starvation ain’t no fun, even if you aren’t the one starving. The likely extent of the damage looks like the numbers starving would far outpace the remainder’s ability to stave off that starvation.

There are some pretty savvy folks who see serious rioting and cities burning if the numbers grow too large…groups of hungry people have no common sense, no self control and in many cases no conscience.

This ain’t no game…it’s damned serious business, and not only profits are at stake.

Posted by: Marysdude at March 17, 2009 7:16 PM
Comment #277864

Jim M, you are aware that neither Fannie nor Freddie are government agencies? The Federal Home Loan Mortgage Corporation has never been a “government agency” and the Federal National Mortgage Association was converted from a government agency to a private stock corporation in 1968.

In any case, 70% is a far to excessive tax rate for anyone to pay except for extremely rare circumstances. A 50% top rate seems like the maximum rate I’d ever imagine supporting.

With regards to AIG, I would really like to see the government (which now owns 80% of AIG stock), to refuse to pay these “bonuses”. I wonder if the people who contracted to receive the money would have the guts to sue in court. It would be hilarious to watch these people try to explain why they deserve performance based pay bonuses with all the “success” they’ve been having with their lucrative credit-default swap insurance that they don’t bother to keep cash reserves for.

Posted by: Warped Reality at March 17, 2009 7:37 PM
Comment #277867

WR,

I don’t think they’d even try to convince anyone they deserved the bonuses on merit…they would not have to, as any court of law would have to follow the laws of contract.

If there are violations of law, as the timing of the contracts, or some technical reason they will not stand up under the law, then you are right, but all things being legal, they don’t have to justify anything except a proper signature on the contract and the check.

Nope, we’ve gotta get it back another way.

Posted by: Marysdude at March 17, 2009 10:16 PM
Comment #277871

I thought these were bonuses and not salaries? I had the impression that the contract must say that if employee x is successful, he/she will be awarded y dollars in bonsuses. Whether x is successful or not will be measured by parameters a, b, c and d. I haven’t seen the contract, so I do not know what it says, but surely there must be stipulations that an employee must complete certain requirements before earning the bonus. If this was a guaranteed thing that did not specify any performance expectations, then it shouldn’t be called a bonus, but a schedules salary increase or something like that.

BTW, I find the differences in reaction from these contracts and the UAW ones that are causing the automobile manufactures difficulties interesting. Especially when it comes to the people who insisted that the UAW forfeit some provisions that they fought hard, but are willing to say “a contract is a contract” when it comes to AIG employees.

Posted by: Warped Reality at March 17, 2009 11:14 PM
Comment #277877

Looks like Shumer and others got it.They are threatening an excise tax of %100 on the bonuses. I would still like to see %150.

Jim M.
Sounds like you are defending these bonuses. Really?

Posted by: bills at March 18, 2009 4:25 AM
Comment #277888

Warped,

The issue is that they WERE successful. They were sales people who were incented to sell derivitives. They did, they sold a lot of them. It was not their responsibility, nor was it within their power, to ensure that the company could survive if they did that. It was also not part of the contract, only that they sold more than x number…

I, for one, am defending the bonuses because they are legally entitled to it. It is no different than if we decided that the employees of any company didn’t deserve the pension plan that they were promised, by contract, by the company.

If the employees were making less than 30,000 per year would you be suggesting we break the contract and not pay them? Do you not see the duplicity?

Seems that Sen Dodd felt the same way when he included the amendment to protect any kind of bonuses in the bailout provisions…

Posted by: Rhinehold at March 18, 2009 11:22 AM
Comment #277890

“Nope, we’ve gotta get it back another way.”
Posted by: Marysdude at March 17, 2009 10:16 PM

Agreed, if contracts can be thrashed for no other reasons than “fairness” we are all in danger.

The anger over this issue should be directed at congress. Those pimple-headed idiots are incapable of guarding the people’s money.

Posted by: Jim M at March 18, 2009 11:57 AM
Comment #277900


This is an example of how Obama and Congress are deflecting and channeling the outrage of the people towards a trivial matter and away from the big bailout picture.

Obama and his cohorts know that the primary outrage is directed at this massive taxpayer bailout. They are going to continue with the bailout despite the wishes of the majority. thus, a huge public display of political animosity towards a few million in bonuses while trillions are added to the debt.

If the people were truely outraged about what has happened to our country and economy, there would be at least 80 Senators and two or three hundred Representatives looking for a job.

Considering the fact that this is supposedly a nation based on Constitutional law and democratic principles, there are no people, on earth, more deserving of their government and what has happened to their country.

Posted by: jlw at March 18, 2009 1:53 PM
Comment #277904

>They are going to continue with the bailout despite the wishes of the majority.
Posted by: jlw at March 18, 2009 01:53 PM

jlw,

I’m sorry to be the one to inform you, but you are not part of the voting majority, and you should not try to speak for us. I believe the rescue is important and imperative. I AM part of the voting majority, and can speak for myself.

Posted by: Marysdude at March 18, 2009 2:37 PM
Comment #277937

Understanding the outrage, in that after all AIG has done they now have paid retention bonuses to their keep execs.

I understand the trouble Sen. Dodd is in right now as well as our new Treasury Secretary.

At the end of the day, I struggle with an answer. I am certain these Execs would rather work somewhere else. Would you work for AIG?

Here is what I personally would do with the money. I would give it all back with my resignation, even if I were innocent of any wrong doing. Who needs it?

Of course the problem with them giving the money back with their resignation is that they hold key data in their heads. They have the information that our government needs to liquidate the assets needed to pay off govenment loans. Bringing in new people costs a whole lot more than these retention bonuses.

In this political / econmic climate doing what appears right, might be the worst option for the taxpayer.

I do see it ironic that a bought and paid for Congress feels it has some moral authority to be outraged. They put how many billions of pork in the latest bill that Obama signed? Congress has such a low approval rating, and yet standing in their glass house, are throwing rocks by the bushel.

Posted by: Craig Holmes at March 18, 2009 6:05 PM
Comment #277944

It is ALL the fault of Congress and the Administration. We learn that they SPECIFICALLY took out a part of the bill in the recent stimulus that would have limited the bonuses.

Dodd admits it. They rushed through it and look what happens. Now these same Senators & Congressmen castigate the head of AIG, who is working for a dollar a year and whose hands THEY tied. Crooks. Vote them all out next election.

Posted by: Christine at March 18, 2009 7:12 PM
Comment #277971

jlw

“jlw,”

“I’m sorry to be the one to inform you, but you are not part of the voting majority, and you should not try to speak for us. I believe the rescue is important and imperative. I AM part of the voting majority, and can speak for myself.”

isn’t this statement lovely. you don’t count, and i guess i don’t either for that matter. watch out comrad obamas people will teach you a lesson LOL !!!!!!!! how dare you speak out ! LOL !!!!!!

Posted by: dbs at March 18, 2009 10:35 PM
Comment #277973

jlw

BTW i’ll check back with you after the 2010 midterms, there’s a good chance you will be part of the VOTING MAJORITY by then LOL !!!!!

Posted by: dbs at March 18, 2009 10:38 PM
Comment #277996

jlw won’t be part of the voting majority for a very long time…he is third party/independent…2010 might see a resurgence of Republican politics (doubtful, but possible), but it is unlikely to see any currently known third party in power.

I did not say his oppinions did not count or insult him in any way…I merely pointed out that when he said, “They are going to continue with the bailout despite the wishes of the majority.”
(Posted by: jlw at March 18, 2009 01:53 PM)
That he could not speak for the majority, as he was not a member…someone needs to change their diaper.

Posted by: Marysdude at March 19, 2009 10:43 AM
Comment #278001

“That he could not speak for the majority, as he was not a member…someone needs to change their diaper.”

jlw has the right to say what ever he or she likes as long as the rules of particopation are observed. and your right i laughed so hard when i read that comment i almost s#*t myself. isn’t the wisdom of the day that the independent vote went to obama? if so that would make jlw part of the voting majority.

Posted by: dbs at March 19, 2009 11:15 AM
Comment #278010


Marysdude, with candidates like Obama, Clinton and Dodd, I had two options. I could continue to be a Democrat and vote for the Washington/Wall Street corruption club or I could vote for the only candidate that had a remote possibility of cleaning out that rats nest. I chose the second option and in all my years of voting, I have never been more proud of my vote.

In every election cycle, the voting majority, be it Democrat or Republican, have been the perpetuators of the corruption club.

In a good turnout election, the voting majority can be as high as 30% of those eligible to vote. Obama might have gotten 30% of the potenial.

Give the people referendum voting and see how well outsourcing of jobs, insourcing of cheap labor and bailouts to giant corporations fair.

Posted by: jlw at March 19, 2009 12:41 PM
Comment #278053

They Were Against It Before They Were For It

This week, Republican leaders have leapt to join the populist outcry against the bonuses that ailing insurance giant AIG has awarded its executives. But such rants against executive earnings mark a remarkable about-face for the right flank of the party, which condemned President Obama’s decision to set limits on executive pay just last month.

Read on.

Posted by: womanmarine at March 19, 2009 5:27 PM
Comment #278081

Perhaps someone really SHOULD change their diaper?

Posted by: Marysdude at March 20, 2009 5:37 AM
Comment #278569

More on AIG …

What If Competent People Ran the World?


Posted by: Citizen Coal at March 25, 2009 10:31 AM
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