Geithner crawls on his knees to AIG; Plus: Sunday open thread
Busy with offline stuff today. What’s on your minds?
Here’s a blood-boiler of the morning. Mr. Lonely Tim Geithner — who was instrumental in putting together the wealth-redistributing AIG “rescue” plan — now apparently believes that if he says “pretty please with sugar on top,” the bailout behemoth will cut back on bonuses sure to deepen the disgust of outraged American taxpayers:
American International Group is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars.
AIG is paying out the executive bonuses to meet a Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments.
The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.
Treasury Secretary Timothy Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said Saturday.
This official, who spoke on condition of anonymity because of the sensitivity of the issue, said that Geithner had called AIG Chairman Edward Liddy on Wednesday to demand that Liddy renegotiate AIG’s current bonus structure.
Geithner termed the current bonus structure unacceptable in view of the billions of dollars of taxpayer support the company is receiving, this official said.
Fecklessness abounds.
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Categories: AIG,Tim Geithner
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The Boy Wonder. A perfect symbol of the “Over my pay grade”, out-of-my-depth administration.
Just shows why Government shouldn’t be in the bail-out business.
If Wonderboy & Co. don’t like what AIG is doing having putting them on the dole, maybe they should just take over AIG completely. At gun point. Why hide what you really want to do?
Just do it!
Of course, that would let the cat out of the bag, huh?
Here – you somehow left out this part of the article:
The company and it’s employees receiving the bonuses are operating under a contract. It’s one of those concepts strongly associated with the Rule of Law.
Are you suggesting that these contracts be abrogated? How does that fit in with Conservative ideals of upholding the law and non-intrusive government? And how does it square with your previous demands that homeowners in trouble with their mortgages be made to abide by the legal terms of their mortgage contracts?
Attempting to nullify AIG’s contracts will result in lawsuits, which in the end and in the current climate will wind up adding court costs, legal fees and penalties to the price taxpayers are already shouldering. No court in the land is going to sit still for overturning these agreements, and such action by government is way over the line when it comes to nationalization.
Did you think about this at all, or did your knee just start jerking when Geithner’s and AIG’s names appeared together?
The current administration doesn’t want to waste any money that could be used for pork barrel vote-buying schemes instead.
Haven’t you heard? The government has the power to wave its Judical Wand and *Presto!*
The contract is remade to a Socialist’s delight!
It works for morgages, why not for *any* contract?
Oh, I forgot — there are F*O*O*’s there…
(F*riends O*f O*bambi)
Meanwhile, there’s, you know, actual news taking place, as Chinese and US Navies once again are entangled in an incident off China, with the US ships being surrounded and harassed.
But I suppose the chances of real news being covered here are rather slim.
The government should stopping pointing fingers at perceived “excess” in the private sector when our illustrious congress will fight to the death to keep their timely pay raises despite the perception it gives during times of economic upheaval.
They are good at chastising the private sector for indulging in business practices that have gone on for years like flying in a corporate jet to a hearing before congress and then we hear of the snit-fit Pelosi has when the Air Force doesn’t provide a plane any time any place her little heart desires. What hypocrites!
Maxine Waters is one of the best illustrations of how hypocritically sanctimonious these people can be.
They have become so entrenched in congress that they feel a sense of entitlement expecting to leave their congressional seat to their off-spring or those they deem worthy of the honor. Term limits are long overdue.
So this is how the clumsy, corrupt, stupid democraps fritter away our tax dollars on the financial industry? I can hardly what to see what those idiots do to the health care system.
n March 15th, 2009 at 8:05 am, SixDegrees said:
Meanwhile, there’s, you know, actual news taking place, as Chinese and US Navies once again are entangled in an incident off China, with the US ships being surrounded and harassed.
But I suppose the chances of real news being covered here are rather slim.
Seems all you ever have is negative comments, if you dislike Michelle that much go on back to huffpo and dkos. Tell your boss Soros he just ain’t paying you enough for all the abuse your brain is taking here.
Well, it if your day starts off as nice as our here, it will be a good day to be offline and enjoy the great outdoors!
Me, I just returned from an customer conference/awards dinner in Cancun. Doing laundry and repacking for a convention down in South Florida. I intend to get out (after Mass) and snap a few photographs at one of the many state parks around here.
BTW:
Can we sue the legislators for tanking the economy? Malfesence? [sp?]
There are plenty of examples both historically and recently that they are doing destroys the value of currency. When we accept a dollar, it is with the understanding that the government will act in good faith, and not set out to destroy the value of the fiat script they require us to use.
The various porkulus-es have no stimulating effect – they are built as political payment to cronys (cronies[sp?]), but it could be argued that their purpose was to cause hyperinflation, (which will hit in time for nxt Christmas, if not sooner) – and therefore cause crisis to insure the continued re-election of Obie&co. (FDR: Don’t change horses in midstream… Obie: never let a crisis go to waste[and worsen one if necessary]).
Since there is a mountain of data, both modern & historical, (sorry, too much Gilbert & Sullivan… [wink]) refuting the stated purpose of these clown’s porkulus-es, they are either:
(A) purposefully breaking the contract (represented by the paper bill) between the government & citizenry…
(B) too stupid to be allowed out without a straightjacket & keeper…
(C) money laundering into campaign slush-funds, or political payments-in-kind…
(D) choices A & B…
(E) choices B & C…
(D) choices A & C…
or my personal favorite:
(D) choices A, B & C.
In any case, having to admit to choice “B” in court would break any Lib’s heart-substitute.
The question of “standing” can’t be used to stop it, since each & every one of us with a dollar in his pocket is party to the “legal tender” contract… and I know we can bring suit for redress…
How about a 300m person class action suit?
Just thinking out loud… (…while waiting for the towtruck to pickup my dead car…)
Seems you and I took completely different points from Michelle’s article. What I saw was the tricky problems with bailouts and their inherent moral hazards, and the lack of anything short of, as one comment said “take-over at the point of a gun” to control behavior of those bailed-out.
Your point that there are preexisting contracts in place maybe also illustrates that the bail-out terms and conditions did not go far enough. If the government had said (I’m assuming for the purposes of discussion that the government should be in the bail-out business in the first place, but most certainly not advocating that) to the employees: “Rewrite your bonus contracts or line up as creditors to a bankrupt company”, perhaps not quite so many millions would have gone out the door to people who, despite their contracts, manifestly failed the company.
It is common knowledge that the Dems don’t play by the rules so why should a “contract” stop them?
It has been previously discussed amongst us that we knew that P-BO will use the massive database to get the little people energized to contact every politician to express the planted thoughts from the P-BO machine.
Those politicians will tally those contacts and have a whiz-bang feeling and will vote that way.
The Dems are the very best at planning their movements when it comes to marketing.
Wonder how many emails the RNC/Steele have left that they could “broadcast” out to?
We’re still screwed.
Contracts can be “abrogated” by bankrupting AIG, or bankrupting the division that enabled this mess. Companies regularly divest themselves of onerous union contracts by bankrupting and starting over. This wouldn’t be new. A few public hangings might go a long way towards preventing crap like this in the future too. Televise them in prime time: One AIG bonus-receiver, one Congressman (Barney Frank would be a good start). Repeat as necessary.
I’ve come full circle on these tarp handouts. I was offended by some of the uses – bonuses, conferences, etc. But hey, the government *gave* the money to them! So, executives! Spend it as you wish! The government was stupid enough to give it to you.
If this stops future bailouts, it might be a better “investment” than bike trails, trout farms, tattoo removal, high speed trains, etc.
About setting aside contracts and mortgages:
When a company is in Chapter 11 bankrutpcy, which AIG is not, the judge does have the power to set aside contracts. That’s what would happen to GM’s labor contracts and dealer franchises if it went in to bankruptcy reorganization (Chapter 7 is complete liquidation).
An individual does this in a Chapter 13 bankrutpcy – the bankruptcy judge gets the creditors together, who may be asked to waive the credit card contracts, etc, and accept so much on the dollar to settle debts. Whether a mortgage would be renegotiated would be up to the judge – assessing the ability to pay off even a renegotiated mortgage.
Outside of bankruptcy, you have the Constitution: Art. I, Section 10, clause 1 – which prohibits any law impairing the “obligation of contracts.” This is Geithner’s problem. He can ask AIG to breach these contracts, but he can’t make AIG do it.
It will be interesting to see how the housing bailout goes – will people have to actually file for banktrupcy to get a bailout (a bankruptcy stays on the credit record for years), or will Congress try to find some way to make banks, which are regulated by Congress, “voluntarily” do this outside of bankruptcy court?
SixDegrees is absolutely right, this information should’ve been included as it’s absence makes the post look as biased as an Al Franken OpEd. Six is also right in that this is a contractual obligation and the Govt. shouldn’t interfere with private agreements, no matter how liberals freely ignore such arrangements. What to conclude, then? Bailouts must come with conditions, including no bonuses to CEOs, etc. If these conditions will cause the companies to be open to breach-of-contract lawsuits, then no bailout. Sorry, get your sh*t together first and THEN come crawling to us for a bailout. Next! Sorry, no bailout. Next! See how easy it is?
AIG says they need these bonus payments to keep the nitwits that already got them in trouble.
Just where are these people going to go if they don’t get any bonus.
You got it – nowhere.
Believers in big government can’t have it both ways. Either bail AIG out so they don’t go bankrupt and continue fulfilling the terms of their existing clients and employees, or let them file ch.11 and get the contracts modified so they can stay in business. You can’t bail them out to meet all their obligations, then complain about which obligations they meet.
Rule of Law? Who said Rule of Law? We are talking Touchy Feely here good people. If Mr. Lonely Tim Geithner and President Obama were as smart as the Left thinks they are shouldn’t they have noticed those contracts?
Really sharp people the Smartest People in America–VP Biden said so. Mr. Lonely should go to Building Maintenance and hire staff-he would not be so lonely and a competent plumber or painter just might pay attention to detail and see the big picture–they are NOT exclusive.
—
Keep the change-I’ll keep my guns
Why, all Geithner needs to do is tell one of his top deputies to lean on…
Oh, that’s right, he doesn’t HAVE any top deputies, does he?
Maybe he ought to vet enforcers instead of deputies. He’s from New York, surely he knows how that’s done?
Obama has been trying Option #1, but on the cheap, so to speak. They may have an idea of how much it would take to bail out AIG or GM, but know Congress would never let the have it. So they do it in increments (not a bad idea in itself), and hope that the rising tide of a recovering economy will lift all boats.
Unfortunately, all the other excessive spending may stymy the recovery. But then the stimilus spending was not meant primarily to help the economy. Its objective was to increase the size of government and to buy votes.
Timmy’s problem is that he has to work with these irreconcilably conflicting policies of the Obama administration. But apparently the Boy Wonder doesn’t see how this or the inflation looking ahead as a result of Obama’s econommic policies. By the time inflation kicks in, Timmy probably won’t be at Treasury, anyway.
You do realize, don’t you, that there are lots of things going on in the world right now. More than can possibly be covered in one thread. So why criticize the discussion of this subject? Doesn’t Michelle have other threads and doesn’t she cover other subjects? The fact that she isn’t covering the Chinese and US navy story on this particular thread doesn’t mean she won’t. Or, maybe she will cover Venezuela, or some other big issue. What the heck is your beef, anyway? There are all different kinds of topics covered on this site. If you don’t like one of them, don’t go there. If you don’t like any of them, you have the choice to leave. There…problem solved. DLTDHYOTWO.
I am shocked, shocked that taxpayer money is going to bonuses for the clowns who put our economy spinning into a depression.
Or maybe he should go to Wal Mart on any weekday morning and he will find hundreds of people waiting to get jobs. He could take his pick. Any one of those folks could do as good a job as he is doing! And below minimum wage! I just solved another problem and saved the taxpayers a lot of money to boot! Scrapper is really on a roll for this early in the morning!
By the way, Michelle…thanks for the open thread! We were getting pretty desperate.
This is the reason the gov’t shouldn’t be bailing anyone out. In the words of our illustrious hostess …
Let.Them.Fail.
I’d feel a whole lot better if Timmay!’s inability to field a deputy was due to a fundamental abhorance to the way things a being done or if the candidates were making a statement about the hipocrisy of the tax evading SoT. But, alas, I feel it’s just a bunch of rats who don’t want to be associated with the sinking ship. Signing on now would be the kiss of death in four years.
You wonder why nobody wants to jump on board with Timmy Tax Avoider.
AIG, the twenty foot day-glo orange crocodile in the room.
Ravenous, taxpayer vested and to big to fail (not really).
AIG needs to be cut up into more manageable chunks so some can go under and the rest can get a clue.
Michelle has a nice ‘thank you’ to Ed and Allah on HA for their hard and good work. I enjoy both MM and HA. Thanks Michelle for all your hard work telling the truth on what is going on.
L
Since this is an open thread, I’d like to talk about
Obama’s birth certificate. . . No, just kidding!I’ve been reading Ron Chernow’s biography of Alexander Hamilton and I cannot recommend it enough. I’m 2/3 of the way through the book (731 pages in hardback) and this is one amazing read. If it has been a while since you read of the Revolutionary War and the struggles to forge a nation, maybe it is time to revisit. This book does an extraordinary job of making it all fresh and highly relevant to our times. At the center of the book is the relationship between Hamilton and Washington and how well the two worked together and arguably made the country — until the political descendants of the “Republicans” (we now know them as Democrats) ruined it. It gives a excellent perspective on what we are going through now.
Note: I am unsure of Mr. Chernow’s ideological leanings, but if he’s not a conservative, he should be.
My guess is that those that are not starved to death on Obama’s stimulus package, will be killed off with his health care package.
Nah, that’s not it. They just can’t find any Democrats who have actually paid the taxes they so enthusiastically force on the rest of us..
I see so much about Madoff and his Ponzi scheme – when you define ‘Ponzi’ it is paying the older investors with proceeds from the newer investors. Now, lets charge all the members of Congress who have fostered the largest Ponzi scheme in the world – Social Security. They have repeatedly borrowed against the SS annuities so as they freely admit, the money you pay in is going to pay for the current retirees.
Elections have consequences.
Joke: What’s the differnce between Obama and Jesus?
A:Jesus could assemble a cabinet.
Your book recommendation is very timely! I was just thinking about getting a book on the American Revolution, but there are so many out there. I will take your advice and pick up a copy of Alexander Hamilton’s biography. Thanks!
For the companies I’ve worked for I’ve always understood bonuses were awarded at the discretion of management and could be withheld for any reason, or no reason at all. The company’s obligations to an employee were fulfilled with the payment of hourly pay, salaries and/or commissions.
So the question is, are these payments being labeled as “bonuses” really a variable commission structure based on performance which the company financially obligated itself to by contract? If this is the case, since the government failed to force AIG into Chapter 11 bankruptcy where they belong, then these payments would appear to be lawful obligations that the company assumed and there is nothing the government can do about them.
the bailout count as i remember it; the second 350b of the original tarp which gw turned over to obama in january, plus the 787b of the stimulus, plus the 275b of the mortgage cramdown, plus the latest aig bailout 30b, plus the auto bailout 20b, plus i’m sure there have been rounding errors to the unions and acorn, but those go unreported. so by my count the one has spent nearly 1.5t in less than 2 months not including his 410 budget for 2009. we ought to be able to go outside on these breezy spring days and catch money falling from the sky.
on another note, the teachers of this country just really don’t seem to understand that people and businesses who pay taxes are keeping their jobs viable. no businesses, no jobs, falling real estate values equals cutbacks in school districts, as well as colleges. the teachers in california think the democrat legislature is the source of the income that pays their salaries. i just saw that st louis county is trying to raise taxes to pay for the falling revenues at the local level. ditto the state. ditto the nation. maybe whoopie is smarter than our average school teacher and gubmint worker. these spendaholic tenured/protected idiots better start smelling the coffee, because the days of tax and spend and tax some more are coming to a screaching halt. time to figure out how to balance the budget you have, not the budget you want. all hail galt.
I have heard Whoopie in deep debate on issues and that woman does have a brain! She is quite intelligent, but unfortunately also liberal. She is open to other viewpoints, however, which is rare for a liberal.
Nailed it! These guys are just creating blood-sucking zombies by feeding failed companies. The key problem with AIG is that they underwrite 90% of all commercial aircraft. Solution? Break up that business and apportion it among the competitors. Same with CitiGroup and Bank of America. Break them up already!
This is why they should have filed bankruptcy.
Here is how LA is spending its “gang reduction” money, taken from the taxpayers:
Scholarships for Illegals
I’m furious!
I have my life insurance through AIG. I have asked them to explain to me what happened to my premiums and just what “risk” my life insurance is in. I’ve gotten NO answer.
This bothers me.
I always thought bonuses were linked to positive perfomance/production.What part of -$61+ billion in one quarter qualifies for bonuses?I should work for morons[crooks and their cronies?]like them.
Maybe a previous poster had already covered this question, and I missed it, but…
How can a company that lost $50+ billion in the most recent quarter pay any bonus to anyone? – much less, relying on government printed cash to do so with… Tell me “it ain’t so!”
Yes, I agree. The Chapter 11 approach was the correct one upon realization of the problem.
Instead of bailing out AIG, why didn’t we just bail out the insurance policy holders who had money to lose in the company, then let them go under? I may be missing something here, and I don’t pretend to understand the whole problem. But I do know that giving money to this company so they can give their failures at the top obscene amounts of money is immoral. IMHO
cheapseat: here in CA, we are being inundated with gratuitous “news” coverage bemoaning the loss of teachers jobs and the tragedy it imposes on children. Never EVER is there a single word about the tragedy of the jobs their parents are losing.
If the non-teaching world isn’t important, maybe we don’t need teachers either. Besides, the typical public high school grad out here can’t speak English, read or write effectively or work with numbers. Let’s go back to the one-room school houses that educated the scientists that put a man on the moon.
Right on! And don’t forget home-schooling. That is under attack big time right now because if you are home-schooled, you are not under the propaganda thumb of big brother. Can’t have that! By the way, Pasadena, I wish you could change your name to Des Moines Phil, or Fargo Phil, or some nice flyover state name, then make the move…you would be happy you did! I guarantee it!! I know there are some conservatives left in California, but so few that you must feel a bit overwhelmed!
happyscrapper: AIG can’t afford to lose these people because they will go somewhere else. Yeah, no matter how we try to explain it, it doesn’t work. “Indispensable” crooked people who drive a business into the ground. And every single one of these companies are loaded to the gills with them.
Where will they go if we all just stop pretending that they are indispensable? Let them go to Europe! Good-bye already!
Pay me $500,000 and I’ll be thrilled to grind your business into the ground and I’ll even waive any bonuses (bonii?)!
That is a widely-accepted misconception about CA. There are more conservatives here on a per-capita basis than most anywhere else in the country. Republicans still account for about 38% of registered voters too (22-23% nationwide). It is just that there we don’t have a Republican Party anymore. The State Republican Committee routinely endorses Democrats against Republican candidates arguing “electability”.
By moving out of CA, all I would be doing is catching the crest of the wave somewhere else. I would rather fight things where the fight is already on. Wherever you are, what is happening here is heading your way.
BTW Golden Boy Geithner, why can’t you and Bernancke do this?
Wow, disclosure. What a radical concept! Transparency without disclosure makes about as much sense as “conservative Republican”.
In case you missed, Obama is now open to McCain’s regressive plan of taxing health benefits.
The one-party system at work. Or as I like to call it, the United Establishment Party.
You mean kinda like Tim Geithner?
What do you think they would pay out in a good year?
Here is where the bonuses are going: the toxic financial products division.
Please put them (and us) out of their misery.
No, you dolt, she’s saying that if AIG had gone bankrupt like it should have, those contracts would be null and void and subject to renegotiation. Just like GM.
Are you simple minded or do you understand that those millions are coming out of your pocket?
I didn’t know that about California! I do like the concept of staying and fighting where you are. I just thought it might get a bit discouraging. But then, we are all a bit “down” right now, aren’t we?
It is a beautiful day here in Minnesota…almost 60 degrees. Tomorrow, even warmer. We may have turned the corner and left Winter behind. At least the bitter cold part of it. However, there could be more major snow storms on the horizen, as the hockey tournaments are this week! We never say never here in Minnesota, where we have just two seasons…Winter is coming, and Winter is here!
Great Larry Summers quote from my last link:
Whah…? What about the mortgage “cram down”? The government is breaking contract terms on millions of mortgages to rewrite the terms.
File that under “arbitrary enforcement of the law” together with sanctuary cities and lax border enforcement.
happryscrapper: I’m a Boston University grad where we won three national hockey championships. It was those teams combined with the Minnesota team that created the Olympic “Miracle on Ice”. College hockey is the most under appreciated sport in this country.
As touchy a subject as this is, concerning these corporations paying out money to their executives and such, there is one fact that seems to continually be left out of any and all reports about them. These companies have contracts with people. These contracts include certain guarantees concerning payouts of bonuses and incentives and such.
Were these businesses and corporations to not make these payouts, they are then able to be sued. As anyone knows, the payouts for these lawsuits, on top of all the legal fees involved, end up being far more than if they had made the contracted payouts in the first place, thus they would end up being in even more financial trouble in the long run.
Whether people agree with these payouts or not is moot. The simple fact is, these people have contracts that need to be filled. The people expecting them are not necessarily involved with or responsible for what the people who run the corporations involved are doing to the company. If they have fulfilled the obligations as set forth in their contracts, then they have every right to expect and receive said payouts.
RetFireman: I refer you to my prior comment and argue that this is the very reason why they need to be taken into bankruptcy. Owning 80% of AIG and about to buy more and claiming that the government has no right to impose solutions is like being 80% pregnant and arguing that you are not pregnant.
Slay that zombie already. And take out Citi, BankAmerica and GM next.
I agree with that. I think that these companies need to realize tht there is a price that goes along with their “recruitment” methods.
Used to be that people would get a career and stay at one place for decades until they retired. That would build company loyalty and make for a good product/services as well as a strong company.
However, somewhere along the way, people have come to feel that if you are at a place for more than 3 years, you are there too long and are wasting your time and life. So, they shop around, and other companies offer outrageous incentives in order to woo who they want. Eventually, someone needs to stop that practice as it has lead to such outrageous payouts, regardelss of the damage to the business itself.
It is no different to the outrageous demands that Unions put on corps. or companies without any care to how it will ultimately destroy the ability for their rank and file to have a job at all.
The people getting these payouts are only receiving them because they were offered in the first place. If it takes this to get it through to people that such a practice is ultimately detrimental to everyone, then so be it…let them fail, and let those that have a better understanding of what it takes to survive…survive.
Taxpayers should not be shouldering anything for AIG. AIG is responsible for their own contracts, and yes I insist they honor them. Really – with their own money. Oh, they’re broke – well they should declare bankruptcy. The lawsuits will happen but no taxpayer money should be involved.
“Did you think about this at all, or did your knee just start jerking when Geithner’s and AIG’s names appeared together?”
Excuse me, did you get this site confused with the Drudge Report or msnbc, etc.? FYI this a news blog site, based on politics, not a minute by minute news reporting service…were you lookin for the AP news service. Maybe your at the wrong site.
“On March 15th, 2009 at 2:34 pm, RetFireman said:
Used to be that people would get a career and stay at one place for decades until they retired. That would build company loyalty and make for a good product/services as well as a strong company.”
That is a pretty good description for CostCo. That is why I won’t weep for WalMart if they get unionized. CostCo has almost zero turnover, pays well, has excellent benefits and their employees don’t steal from them. And they speak English.
Let me straighten out my last post:
On March 15th, 2009 at 3:01 pm, Pasadena Phil said:
That is a pretty good description for CostCo. That is why I won’t weep for WalMart if they get unionized. CostCo has almost zero turnover, pays well, has excellent benefits and their employees don’t steal from them. And they speak English.
Would seem that many corporations are resembling the Madoff’s of the world, and their books are nothing more than ponzi schemes. I can never recall receiving one red dime from any shareholder when they got their checks. If shareholders want these behemoths to stay in business perhaps they need to kick in a few more dollars to save them. If that isn’t a viable option, how about a few more perp walks. You’d see those people leaving the companies they failed and forgetting all about those bonuses.
“You can Not fix a problem with the same mind that created it.”
~unknown~
Chris Wallace mentioned this morning that the bonuses went to those “who sold a lot of life insurance” (paraphrase).
Well, AIG sells a pantload of life insurance, and it’s a very profitable part of their business. So why should the people who meet and exceed their goals in the profitable part be penalized, EXCEPT for “class envy” purposes???
Is that something we conservatives want to buy into?
Years ago, when I worked in the computer biz, I got some $$$ and a three very nice (not “lavish” vacations in Maui and Bermuda because I had made my company a pot of money. Other divisions didn’t do so hot, so their people stayed home.
Should I have felt bad for them? NO.
Did I ? NO.
Would it have made you all happier if AIG just spun off the life part of their businesses? Somehow I feel you would have treated doing as a scam to defraud the public.
But you would be being irrational.
One more time.
That is a pretty good description for CostCo. That is why I won’t weep for WalMart if they get unionized. CostCo has almost zero turnover, pays well, has excellent benefits and their employees don’t steal from them. And they speak English.
Sheesh!
fooldroolcup – obviously, AIG didn’t sell enough of something/anything to make the kind of profit necessary to keep them viable. I love to see employees rewarded and have done so in the past myself. But, when you’re facing stepping into a six-foot hole with a headstone – someone has to be the grownup and tell everyone, “no bonuses this year, you’re lucky to have a job.” They would have been smarter giving hard/profitable workers a pay increase, but a huge $$$ bonus – tell that to someone applying for unemployment tomorrow.
How is bailing out a private company with tax money conservative?
24klady, I disagree: if I am a performer in a profitable unit of a company I owe non-performers nothing.
I owe the company nothing, either. They owe me.
In Sales the non-performers lose their jobs all the time, so what’s the difference?
I should also point out that I had a CEO once try to screw me out of a “huge” bonus, because the company wasn’t doing well, even though I had exceeded my annual sales goals.
(Essentially, the previous CEO made me a deal to stay while the faltering company was seeking to be sold, since I was had some particular expertise the company needed.)
Even though I did my piece, the new CEO tried to stiff me. We had a little chat; I stood firm. He paid me, and then laid me off the next day.
I was happy to take the money and run, given that the company was failing (it no longer exists).
Point: you don’t know what the contracts were, and you are in no position to bu judging what a “huge” bonus is, and what’s behind it.
Arguing that it’s my job to take a financial hit so that some non-performing shlub gets to keep his job sounds curiouisly like the one Barney Frank is making to justify me paying to cover someone else’s mortgage default.
Finally: AIG is a multi–billion company that underwrites 95% of all insurance for airlines, covering passengers and planes. It’s a goog business. Do you think the folks who work on those policies should be penalized? I guess you do.
secondly, do you want AIG to go into bankruptcy? If so, I guess you would be cool with virtually all commerical air travel stopping for a couple of months, given that the industry would be uninsured. Never mind that insurance often enters into an airline’s rights to fly in and over other countries.
In any case, it wasn’t a case of AIG not selling enough of anything — they sold too much of the wrong kind insurance for mortgage-backed securities that went bad. THEY didn’t cause the badness.
btw: most “tell that to” arguments are weak, and certainly NOT dispositive in making policy decisions.
Example : “Sales of peanuts should be banned because a few people have bad peanut allergies”.
“That seems excessive”.
“Tell that to the person who turns blue if he’s within fifty feet of a peanut”.
See what I mean?
It’s not, but the bailout is a fact. As I have tried to lay about above, it makes no sense to penalize the people who are NOT the source of the problem that got AIG into trouble.
Lay out, not “about”: I don’t lay about much.
It sounds like no one knew about these contracts. That’s the problem here. Taxpayer money was just thrown to these companies without properly looking into their business practices. If someone goes to the gov’t begging for a handout the gov’t has a right to make sure there aren’t other steps you could be taking to keep yourself out of the hole. These contracts should have been discovered and then the companies could have been told that if they want bailout money, the contracts needed to be suspended or renegotiated. If the company accepts that, fine, if not, they sink or swim on their own. Going to them after the fact because you didn’t do your due diligence is not fair. If you’re going to get upset about how people spend money you give them, come to an agreement beforehand or don’t give it to them.
Please read: The bonuses are going almost exclusively to those who created the toxic assets.
Bankruptcy is the legal remedy provided specifically for these situations.
So, where are the demonstrations about four more killed in “Barry O’s war”?
I do not trust that article: 1) I could not find the authors, 2) its all the reported words of socialists.
If you stick your finger in a socket, choosing not to believe in electricity won’t save you from being electrocuted either. This article was just re-reporting what has already been established as fact from many sources already.
It also doesn’t change the main problem that bankrupt companies should not be ANY bonuses. That is why companies there are bankrupcy laws, to seek relief from wasteful legal obligations.
This action by AIG is another indicator that supports my belief that the reason the Wall Street financial types ran to their bud Hank Paulsen in D.C. was to save their big bucks bonuses.
“The Treasury Department determined that the government did not have the legal authority to block the current payments by the company.”
If the government does not have the authority to block these bonuses, how about at least publishing the names and photos of those executives and employees receiving the bonus.
D’oh!!! That’s what I get for listening to Chris Wallace, who said (without his guest admin spokesman Austan Goolsbee contradicting him) that the recipients included performers in the life insurance side of the business.
If the article is correct, then….my arguments don’t apply, since the $$ to pay such folks has to be public money, not AIG’s.
But since no authors are identified: that’s my story, and I’m sticking to it.
Hmmmmm… 170 BILLION Dollars.
WoW, that is alot of money. It did get me thinking about someone tho who NEVER Recieved a BAILOUT… Just a Bullet.
http://www.rense.com/general75/kahl.htm
These are the questions to ask. First, what compensation scheme allows a company that lost $61.7 billion its most recent quarter to pay any bonuses whatsoever? And I suspect that the quarters leading up to the fourth were poor too. Second, how could the feds release this money without working this out in advance?
We are represented by colossal screw ups.
Those bonuses are needed. AIG can’t afford to lose all those crackerjack executives who helped them lose $61.7 billion!!!
You can’t find quality exec’s like that just anywhere…you’ve got to turn over a lot of rocks to find worms like that!!!
Michelle,
Thanks so much for the open thread. Of course now I find myself without anything interesting to share. I turned 50 last week and I seem to be turning into Grandpa Simpson…nothing coherent to share!!!
Just watching Bernanke interview on “60 Minutes” where he made his feelings about AIG crystal clear: they are a rogue company that made monstrously bad bets. He is very angry about having to bail them out. (No questions on Paulson/Geithner policy).
He also stated clearly that it is critical that our politicians show the political will to deal with this. (Implying that they aren’t?)
I take his willingness to take the unprecedented step of allowing himself to be interviewed on the most watched show on television as a desperate plea for our politicians to get their act together.
It was also very interesting that he wasn’t asked any questions about the various stimulus bills or fiscal policy in general. His comments addressed Fed actions only.
Most trenchant comment (and I paraphrase): “We are on the brink of a depression that we may never recover from if we don’t handle this right.”
Fed chairmen never do or say such things. I take it as a deliberate signal that things are going very badly among the entrenched criminal class of windbags Mr. Bernanke is saddled with in Washington.
We taxpayers are bailing out one of my co-workers who gambled and lost on her mortgage–she and her husband have the money to pay their mortgage, but the house is now worth less than they owe and they don’t want to live up to the deal they cut on the mortgage. The bank is forgiving the $150k she’ll owe after the short sale of her home. She was indignant that she might have to claim that forgiven debt as income. She now says she won’t have too. Why does that seem like adding insult to injury for those of us who are responsible?
Imus announces he has stage II prostate cancer this morning.
http://imustimes.wordpress.com/2009/03/16/wabc-imus-announces-cancer-developing/
Depressing
DoD has decided to stop selling expended brass to civilian reloaders. This will result in taking millions of rounds of ammo off the market. Not just .223 or 7.62. This will effect everyone that shoots.
http://www.theshootist.net/2009/03/dod-ends-sale-of-expended-military.html
This will quadruple the price of all ammo in just a few months.
Who wants to bet this was a directive from 1600 Pennsylvania?
Yeah, just a followup. I was right. MOST of the AIG people getting commissions/bonuses/retenttion incentives are NOT in the toxic assets
category. So…Frack you all.
Make up yer frackin minds: do you want AIG to fail? If so, do you want a shiteload of commerce to grind to a halt, worldwide. Then drive the “performers” from the company.
Do you want AIG to succeed?: then keep yer frackin hands off the bonuses/commissions/retentions of the people who CAN make the company survive.
I feel I’m dealing with KOS and DU people here.
Sorry to see so many “conservatives” hating “the rich”, whether or not they’ve ever worked on commission themselves.
Ditto those who think any jackass can step into the shoes of people in the PROFITABLE parts of AIG business.
I sense I’m in the company of a bunch of Japanese “sararimen” here: a bunch of staff people who have NEVER had to “make a number”, or die if they don’t.
And that includes YOU, MM.