AIG: Ain’t it gag-worthy?; Update: Obama chokes up, will pursue “every legal avenue” to block AIG bonuses
Scroll down for updates…Obama will “pursue every single legal avenue” to block AIG bonuses….
I snorted this weekend over the fecklessness of Tiny Tim Geithner, crawling on his knees to AIG in an attempt to avert a public relations disaster concerning the bailout behemoth’s massive executive bonuses.
AIG, 80 percent owned by taxpayers, basically told Geithner — their rescue handmaiden — to take a hike. Now, you can read AIG president Edward Liddy’s snotty letter in its entirety here. A snippet:
Needless to say, in the current circumstances, I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them…
…I would not be doing my job if I did not directly advise you of my grave concern about the long-term consequences of the actions we are taking today. On the one hand, all of us at AIG recognize the environment in which we operate and the remonstrations of our President for a more restrained system of compensation for executives. On the other hand, we cannot attract and retain the best and brightest talent to lead and staff the AIG businesses – which are now being operated principally on behalf of the American taxpayers – if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.
Barney Frank is already in full Kabuki outrage mode. President Obama is scheduled this morning to distract the nation with some sort of sop to small business owners. He may even muster up some faux anger and wag his finger at AIG.
Gag. Spare me.
Both parties in Washington created this Frankenstein. Make no mistake. President Bush, with help from now-Treasury Secretary Tim Geithner and his mentor Hank Paulson, pre-socialized the economy and stabbed fiscal conservatism in the heart with the original AIG bailout. Here is what I wrote on September 19:
Bush Treasury Secretary Hank Paulson just wrapped up his press conference announcing the Mother of All Bailouts. He said a “bold” approach was needed to achieve “stability” in the market.
Let me translate that.
“Bold” = Massively massive, taxpayer-funded rescue.
“Stability” = Privatizing profits and socializing losses on a scale we have never seen before in our lifetimes.
I have had it with Pollyanna conservatives who continue to parrot the “fundamentals of the market are great!” line.
The fundamentals of the market suck. The fundamentals of capitalism have been sabotaged.
Yes, yes, crony Democrats are to blame for much of how we got here. You don’t need to recite all the talking points back to me. I’ve been writing about the Fannie/Freddie debacle for years.
But it is September 19, 2008. And this is a Republican White House presiding over the Mother of All Bailouts. Every step along the way since stimuluspalooza began last summer, we’ve heard that every bailout step was just a one-off. Each step was supposed to calm the markets. Each new government intervention and allocation of taxpayer dollars was supposed to achieve “stability.” Each new package of goodies rewarding irresponsible behavior and bad financial decisions was supposed to prevent new ones.
None did. And now, here we are.
This is your Bush legacy — not Pelosi’s, not Reid’s, not Obama’s: A ginormous bailout of every last, failing, panicked financial institution’s illiquid assets that may reach into the trillions — TRILLIONS – when all is said and done.
And here’s what I wrote on March 2, when Obama decided to dig an even bigger hole:
Screw up, move up. It’s how Obama cabinet officials get ahead. And it’s how Washington’s favored failing businesses get more of your money. The first $85 billion bailout under Bush didn’t work. The second $38 billion under Bush didn’t work. So, hey, how about tossing another $30 billion down the hole?
So much for President Obama taking a stand against Bush’s failed policies, eh? But don’t worry. We’ve got Bozo the VP looking out for us this time, making sure all the money is tracked on the Internets.
Government is not the solution. Government is the problem. Don’t let any of the bipartisan buffoons tell you otherwise. The sooner we have at least one party in Washington that can hold fast to basic fiscal conservative principles in the face of crisis — see: GOP presidential candidate McCain flip-flops on AIG bailout, circa 9/2008 — the better.
***
Update 10:33am Eastern. Obama wags his finger. “I’ve asked Geithner to pursue every single legal avenue to block these bonuses and make the American taxpayers whole. I want to make clear that Geithner has been on the case.”
Yeah, he’s been on the case. That’s the problem.
Coughs. “Excuse me, I’m choked up with anger here.”
Audience laughs.
See what others have said
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Trackbacks
- The White House gets the Message! President Obama to Block A.I.G. Bonuses « Political Byline
- Why the GOP Should Take the Lead Against the AIG Bonus Babies | FullosseousFlap's Dental Blog
- Why the GOP Should Take the Lead Against the AIG Bonus Babies | FullosseousFlap's Dental Blog
- GOP congressman introduces birth certificate bill « Jim Blazsik
- Nevermind The Billions Going To ACORN, Those Damn AIG Exec’s Need To Burn! | Democrat = Socialist
- Bailouts for Liars, Illegal Aliens, and Undeserved Bonuses | OpenMarket.org
- Michelle Malkin » A little something for Obama’s cough
- AIG Execs hopefully will go to jail » A Couple Things » A couple things about politics, sports, travel, and other stuff.
- Michelle Malkin: A little something for Obama’s zero experience cough : Obama Zero Experience Blogs
- Obama gets “Choked up with Anger” over AIG $165 bonues. I’ve been choked up with anger since he’s tried to turn us into the USSA! | Fire Andrea Mitchell!
- Good Richard's Almanac
- Emotion and business decisions - the AIG bonus program | Radio Vice Online
- Michelle Malkin » AIG Derangement Syndrome
- AIG: Demons or Fall Guys with Those Exec Bonuses? « Frugal Café Blog Zone
- Hot Air » Blog Archive » Santelli: Forget the stupid AIG bonuses and get angry about the bailouts
- La Transición de Obama: economía. El Plan de Rescate de Bancos de Geithner « Sarah Palin en Español
- The Greenroom » Forum Archive » 100 days: What Obama does not want you to read
- 100 days: What Obama does not want you to read | Federal Jack
- Patterico’s Pontifications » 100 days: What Obama does not want you to read
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Our money…What a terrific thing to waste.
How true. No one says it better. Michelle in 2012. Bring fiscal and moral sanity to our government.
I am so so soooo tired of the hypocrisy of the Federal Government wagging the finger but not holding themselves accountable for any wasteful spending they are doing of tax dollars.
At least AIG and others are being honest on how they are spending it.
God (no, the Obamassiah doesn’t count)
save us from “the best and the brightest”.
PWNED!
Uhhh, in what way?
I am reminded of the fable about the frog and the scorpion,
http://www.aesopfables.com/cgi/aesop1.cgi?4&TheScorpionandtheFrog
Unfortunately, I see this on two levels:
1. What did Congress (the frog) expect a business (scorpion) to do without safeguards in place?
2. What did the American public (frog) expect our Congress (scorpion) to do without adequate adult supervision?
This “stimulus” movement has nothing to do with bailing out Wall Street and banks or helping an ailing economy. It has everything to do a bunch of opportunist politicans creating a vehicle in which they can attach all the pork they’ve been slathering over for years. It’s a sham and a smoke screen. It’s time they realize the “gig” is up and we are on to their sorry, self serving, destructive, dysfuncational, immoral agenda being passed and at our expense.
On my last…
please substitute “government” for “Congress”.
Sorry for the self-edit
Tar and feather – tar and feather..
1. Rep. Barney Frank charged Monday that a decision by financially strapped insurance giant AIG to pay millions in executive bonuses amounts to “rewarding incompetence.”
2. “These people may have a right to their bonuses. They don’t have a right to their jobs forever,” said Frank, a Massachusetts Democrat who is chairman of the House Financial Services Committee.
3. Frank said he was disgusted, asserting that “these bonuses are going to people who screwed this thing up enormously.”
Let’s play ’spot the hypocrisy’.
MM, how does it feel to always be proven right?
You said over a year ago w/ the income tax stimulus, that “free” government money isn’t free and only leads to a desire for more; now, here we are spending on the labors of the future to enable present-day’s learned helplessness and yesterday’s waste.
Before TARP I, you said inefficient corporations/companies should reorganize under bankruptcy or go under, that if they didn’t change the way they conducted business, i.e., bonus contracts, the government would only be throwing good tax dollars after bad, and now…here we are…AIG has our money – w/o stipulation – and is continuing to do business as usual while Geithner is helpless to do anything but watch.
Both tar, which was used in and around 1774, and feathers from edible fowl sources (such as chickens and turkeys) were plentiful. In a typical tar-and-feathers attack, the subject of a crowd’s anger would be stripped to the waist. Hot tar was either poured or painted onto the person while he or she was immobilized. Then the victim either had feathers thrown on him or her or was rolled around on a pile of feathers so that they stuck to the tar. Often the victim was then paraded around town on a cart or a rail. The aim was to hurt and humiliate a person enough to leave town and not cause any more mischief.
Isn’t this appropriate for Barney Frank – DO NO MORE MISCHIEF….
Seriously, what would you expect?
Barney Frank, Dodd, Geithner, obama…they’re all still there.
The SAME fools who loaned trillions of dollars to anyone with a pulse to buy any home they wanted are now loaning our money to bankrupt companies….without a payment plan or schedule.
They’ve been giving money away thru CRA-Fannie /Freddie for so long, without a care in the world if it EVER was repaid ,they forgot to put TERMS in the documents when they gave MORE OF OUR TAX money away for bailouts.
They don’t know how to write a loan doc.
FIRE ‘EM ALL, start with Barney Frank.
The punishment appeared in Salem, Massachusetts, in 1767, when mobs avenged themselves on low-level employees of the Customs service with tar and feathers. In October 1769, a mob in Boston attacked a Customs service sailor the same way, and a few similar attacks followed through 1774 (the tarring and feathering of customs worker John Malcolm received particular attention in 1774). Such acts associated the punishment with the Patriot side of the American Revolution. In March 1775, a British regiment inflicted the same treatment on a Massachusetts man they suspected of trying to buy their muskets. There is no case of a person dying from being tarred and feathered in this period.
Let’s be patriots again!!!
So if the taxpayers own 80% of AIG, why don’t we fire these people and put “our company” in chapter 11? Vacate the bonus contracts, tell them to go find employment elsewhere and find some people willing to work for a reasonable salary with the intention of growing the business.
And when AIG is sound enough to sell the stock back to the public, pass a constitutional amendment prohibiting bailouts and requiring balanced budegets.
Oh wait, first we have to get rid of the current occupants of the Whitehouse and Congress.
How about the first annual Pitchfork and Torchlight Parade on the mall?
In the real world, if you blow off your major shareholder/creditor, you get replaced really quickly.
The tar and feathers approach is fine. Personally, I would like to establish a bounty on their heads.
I can see the Sergio Leone-style movie to promote this…”A Fistful of Earmarks” (cue in whistling and cheesy guitar twang) with a quiet, cheroot-smoking cowboy coming to save the day.
Just sayin’…
This is FAR more Barney Franks fault than all of the AIG’s in the take.
Blame our gov’t loaners FIRST, THEY GAVE IT TO THEM without a plan to repay or restrictions.
How STUPID ARE THEY?
I say “they (Frank, Dodd, obama) KNEW before they gave it out” yet still did so….WHY?????
Geithner : AIG : Obama
Pot : Kettle : Black
It is truly frightening to hear members of Congress saying that executives in a private industry need to be fired. While I agree to the sentiment, I am afraid that Congress thinks the role of firing these folks is theirs. They have no right to intrude on private industry that way. They think they have the power because of the bailout. That is why they should never have used the bailout. Bankruptcy laws are in place for such things. This government has grown into a MONSTER, and their power MUST be drastically reduced before they destroy the country. This a an extremely dangerous situation and I fear will lead to war within the country. There is no way we can let these marxists destroy the principles that our founding fathers lived by and died for!
Tazed – that’s rraaacccciiisssstttt!!!!
If you start to incite any type of violence that causes death, the libs will squeal (literally) like pigs – it is better to disfigure them in a way that everyone will know their sins….
Hear! Hear!
[break from meeting...]
Actually it was worse than that. The tar was usually hot enough to deeply blister, and of course it stuck. When it was removed it often took a lot of skin with it.
In quite a few cases slightly cooler tar was forced into the mouth and down the throat of the target, often causing blistering that would last for a couple of weeks, making eating and drinking painful (the purpose wasn’t to kill, though in a few cases where the crowd was too enthusiastic it did…) until the internal blistering has subsided.
Even with all the above, when you guys organize a tar-party, post it & I’ll drive down from AK and help — or donate funds for tar and/or feathers from our (projected to be owned) chickens.
WhadIsay – he’s going to use AIG as a scapegoat in an effort to gain our good graces..Nice try Obama but no cigar you moron!!!!
But once the taxpayers assumed 80% ownership, doesn’t it quit being private? Can’t we fire them along with the goons that insisted on bailing them out in the first place?
As a suggestion, rather than saying “President Obama said”, it would be more accurate to say “President Obama’s teleprompter said”.
Destruction of American wealth.
per Alinsky, Ayers, communism, socialism, ‘America is bad’ etc.
This IS the zerobama CHANGE.
Misery obama (the bitter half) told us how she felt, b. husseins books (and hidden past) told us how he felt, but our watchdog(co-conspirators) msm fell in line with the ’60s haters and now we’ve got a huge problem.
If we allow our gov’t to retroactively change/set rules on this issue, what else will they ‘change’.
Do you want barney and obama setting laws after the fact for anything?
Obama said he has asked Treasury Secretary Timothy Geithner (GYT’-nur) to use the leverage of government assistance to AIG to get the company to roll back the bonuses. He said the company cannot justify “this outrage to the taxpayers” who are keeping it afloat.
I’m confused…which outrage to the taxpayers is he referring to? The outrage of the bailout or the outrage of the bonus? The article was not very clear. AP news anyway…
if all these aig crooks and wall street crooks and ny banking crooks are republican, why is manhatten and new york city so damn democrat? me thinks these bailouts have one thing in common, they are big time democrat groups, or bills to pay for the support. unions, teachers, new york wall street, hollywood, black america, etc. follow the money! from the sheeple to the politburo.
Something is the matter with my remote.
Every time Obama speaks, it turns the TV off.
LOL.. Geitner still hasn’t figured out what he is going to do for (To) the banking industry. Wow..lets pile more on the incompetent elf.
Obama = “Failure in Chief”
WELL SAID, we are in danger.
I just heard AIG holds the retirement funds and pensions for congress.
That might answer my WHY question from earlier.
sounds fixed to me…
I need one, would do my heart & bp some good
This is the really funny part. If AIG ever had the best or the brightest (let alone the best AND the brightest) they would never have needed a taxpayer bailout.
As long as these companies and their employees know that they are “to big to fail” these kind of activities will never stop. If they had been forced into bankruptcy where they belonged these people would be lucky if they got a paycheck. Since they weren’t their contracts are enforceable and they are going to get the money one way or the other. We might as well let them have their money or we’ll just be helping another group of Democrats get richer at taxpayer expence (can anyone say Trial Lawyers?).
Obama should know better than anyone else, being a Harvard educated lawyer, etc., that contracts are contracts — i.e., legally binding.
They were negotiated before the bailouts were handed out.
NOW, if he was as smart as he thinks he is, he would’ve made the bailouts conditional — meaning, set rules as to what the taxpayer dollars would be strictly used for and what they could NOT be used for.
Idiot is and idiot does.
From where I sit, you’ve had this problem for years, long before I become an involuntary part owner. Based upon your past performance Mr.Edward Liddy, you need to be impaled on a pike not unlike seen in the movie “Shaka Zulu”.
But congress voted to keep it’s automatic pay raises…How nice…wish we all could do that…
I heard an interesting rumor that AIG ‘had to be saved’ because it insured some of Goldman-Sach’s riskier mortgage based hedging, and Bush’s Treasury Department had a lot of close ties to Goldman.
Why Lehman could be allowed to fail, it was a competitor of Goldman, and it wouldn’t drag down too many Goldman investements.
From al-Jazeera, of all sources
AIG bailout money went to Goldman-Sachs.
“Excuse me, I’m choked up with anger here.”
I’m glad everyone laughed at him. He is such a phony.
MM did you call it or did you call it?
The Amateur is on full display. It’s only a matter of time before our enemies strike.
Hey Frank, you ignoramous, YOU are the poster child for rewarding incompetence.
Yeah. When the king of hypocrites, Barney Frank is ripping someone a new one…(figuratively speaking)…you can be pretty sure whoever he’s attacking isn’t necessarily the problem.
Well Mr AIG…this is what happens to companies when they dabble in risky business and become greedy and irresponsible. YOU took the bailout and now you’re UNDER the government’s thumb, and they have their FINGERS in your pie. Welcome to Socialism. Not very pleasant is it?
if 80% of aig is owned by us the tax payers. can’t we just sell it off take the lose and be done with it ????
oh wait when they said tax payers they really mean congress and the president own it and we just got stuck paying for it .
They can all pucker up and kiss my red white and blue all american a$$
RE: my #41
I always have to repress a chuckle for people that think George Bush of steel tarriffs, a prescription drug entitlement, and huge discretionary government spending even before he had a Democrat Congress to deal with, was a ‘conservative’.
Goldman-Sachs, of whom senior Bush Treasury people had close ties, seems to have an interesting role in the bailout.
Is AIG the fall guy for Goldman Sachs?
I give GWB all the credit in the world for protecting us post 9-11/ but the ‘compassionate conservative’ thing didn’t work out so well.
Two words: Preferred stocks
This is why NO COMPANY should ever receive any government funding (handouts, welfare, ear-marks, non-competed awards, or any of the like) outside of competitively awarded contract work from our local, State, or Federal governments. There is a mechanism that allows these companies to restructure or disolve when they have fiscal and management problems: Bankruptcy. It gives fair and equitible measure for all of those whom are debted to, or indebted by, the collapsing organization.
There exists no model when taxpayer largess is contributed to support a faled company, other than to include the taxpayer as yet another creditor (to the tune of $160 billion!). Unfortunately, for our greatest of Our biggest American incompetents who are sitting in Our House and Our Senate, such a concept is too big too grasp.
Of course, there is also a mechanism that allows the Government to be restructured when they stop following their mandates as detailed in their Constitution, but that is far more bloody and violent than a simple legal proceeding like bankruptcy
Obama wags his finger. “I’ve asked Geithner to pursue every single legal avenue to block these bonuses and make the American taxpayers whole.
…He restoreth my soul: He leadeth me in the paths of righteousness for His name’s sake.” Psalm 23:1-3
Simple solution: bankruptcy.
Despite the MSM reporting that Bernanke was forecasting economic recovery by year-end (he predicted no such thing), his most important statement was to say that if “we” don’t find the political will to fix the economy, we may never recover.
Fed chairmen don’t go on national television for trivial reasons. Having exhausted all traditional and formal means, Bernanke was reaching past the criminals in Washington to up the pressure on politicians to actually start solving problems.
What we are presently witnessing is how useless it is for the government to “own” 80% of a company and still have no effective control over contractual details without fear of lawsuits. Bankruptcy is the ultimate legal remedy for taking out insolvent companies.
There is NO political will to do anything constructive in Washington and so they insist on exploiting a catastrophe as a fig leaf for dishing out pork. It’s the era of Caligula in DC.
AIG, GM, Citi, BofA and a few other companies are hopelessly insolvent and should be taken out now.
Congress….as long as you’re showing such outrage over other’s corruption, how about investigating your own. You can start with your resident lisper, Barney Frank and go down the list to Chris Dodd, and all of their cohorts that are on video resisting any regulation changes for Fannie and Freddie, not to mention the perks they got for being who they are. Then move on to Maxine Waters, the in house moronic racist, and those of her ilk.
If you don’t clean out your own nest of vipers, we’ll do it for you!
So, we gave a bunch of bankrupt con men a huge bunch of money, and we’re suddenly surprised that they’re still con men?
Priceless.
The hypocrisy of Barney Frank and the federal government in general is astounding. Supposed outrage for the benefit of American Taxpayers (voters in their minds) while they continue to spend , bail, spend bail, tax, spend.
It was Barney Frank and members of Congress that foisted Fannie Mae and Freddie Mac onto the national credit market. It was the government that shook down the nation’s banking system with the Community Reinvestment Act. It was government that voted for, lied about, and then wasted $350 billion for the TARP. It was government that signed on to the second round of the TARP funds now in the hands of our TAX CHEAT Treasury Secretary. It was government that used taxpayer funds to bail out the perpetrators of the Wall Street meltdown. It is government that led our financial industry to make these reckless loans, and it is the government that’S DEMANDING taxpayers foot the bill for their incompetence.
Can we withold Congress’s pay since THEY WASTE TAXPAYERS MONEY! I mean afterall taxpayer’s money is going down the drain just like the money to AIG is.
Reading the full letter in context (thanks for the link), I did not find it snotty at all. In fact, it boils down to a legal defense of existing contracts AIG had signed prior to Liddy’s coming on the scene. Regret signing the contracts, yes. But just because you don’t like the terms of the contract — which this administration and its predecessor bought lock, stock and barrel — does not give you the right to cancel it. That would be a very lawless thing to do. Either contracts have meaning or they don’t. I’m not fond of giving judges the power to wipe out legally incurred debt either. I think it’s unconstitutional. I’m waiting for SOMEONE with legal standing to test some of the bilge flowing out of Washington. It should prove to be interesting “Kabuki Theater.”
All the bonuses I’ve ever received have been based on “continued and arbitrary adjustment” according to the financial health of my employer. I have had some interesting bonus structures in my time, but never one that guaranteed a payout even if the company had been taken over by the government.
AIG is off the rails.
Rush Limbaugh just told a caller that AIG had been run soundly by Maurice Greenberg, a Republican, until Eliot Spitzer, as NY Attorney General, litigated him out of there and replaced him with Democrats. The business went downhill from there.
Pasadena Phil said
As long as you’re quoting Bernanke, remember that he also said it would have brought the economy down if AIG had been allowed to go under. I don’t know whether he was right or wrong, but that was his position on 60 Minutes last night. Bernanke said the only solution is to get the financial markets stable, which means getting rid of toxic debt in a controlled fashion. If, and I stress the if, the bankruptcy of AIG would bring down our economy and others around the world, we have no choice.
Truly.
Ron: that is what BANKRUPTCY is for, to get around the foolish and wasteful contractual entanglements. Isn’t that the argument for GM getting out of their labor agreements? Why is this different? It just demonstrates a lack of political will to fix things. Could past and future political contributions be a factor here? Nah! Now I’m just being cynical.
I would also add….
The stories about ‘outrage’ over this is just another cover for the administration.
Where was the outrage over all the pork Congress passed? Where is the outrage over the 1.2 trillion deficit this administration has created over failed policies of the past?
I am writting to the media and my representatives I DEMAND to know.
If the government had a problem with the employment contracts, they should have structured the “loans” so that they could not be used to pay employee bonuses. Since they did not, AIG is legally required to uphold their obligations. Let’s place the blame where it belongs, in WASHINGTON.
So Obama is against bailing out Wall Street. Well, not exactly, he is for the bailout but against bonuses and traveling to Las Vegas. Until Las Vegas complains. So public money should only be used to bailout irresponsible corporations but not irresponsible executives. However irresponsible homeowners should be bailed out, as long as they are not too rich or too irresponsible. Now , everybody will pay for bailing out each other which will be like spreading the wealth around or sharing the misery. Because everybody needs to get some skin in the game, especially if they have been responsible and have some money left, in which case they will not be eligible for bailouts but will pay for other peoples skin that have been very irresponsible.
You see this is because he is for helping Main Street, not Wall Street. Sort of. Is that all clear?
What a blithering idiot this country has elected. Unfortunately for us, it will get the government it deserves.
Ron said: “As long as you’re quoting Bernanke, remember that he also said it would have brought the economy down if AIG had been allowed to go under…”
Would have brought the economy down? You mean, our economy is not down?
Allowing AIG to go bankrupt last Autumn would have put a serious hurt on Paulson’s Goldman Sachs.
If AIG has finished paying off Goldman, they can be allowed to go bankrupt now, with the government auctioning off the billions in assets bailed out for pennies on the tax-payers dollar.
After reading the letter in it’s entirety, the part that stood out most to me was the following:
Shouldn’t someone in the administration be standing up and saying “Um, excuse me, but there is no ‘maximum extent possible’…we’re throwing all these additional billions at you to prop you up so you can already pay us what we’ve already thrown at you! You WILL pay back every penny!!!”
Man….just typing that made my head spin.
Pasadena Phil: If the bankruptcy could only handle the compensation, I’d be all for it. But its my understanding that AIG is holding all those credit default swaps and other bogus instruments that we haven’t yet figured out how to deal with. I think its like pulling that one thread that causes everything to unravel. I share everyone’s outrage at Wall Street — I lost my chance at retirement in the near future, thanks to the 401ks tanking — but I don’t want things to get any worse. And I think Obama and Geithner are crying wolf. They KNEW what they were getting with that outfit, and at this point they can only make sure they don’t get bitten again. But if there IS a legal way to cancel those contracts, I’m all for it. I’m not a lawyer, and I didn’t sleep in a Holiday Inn last night, but it seems to me that a contract is a contract UNLESS one party has done something to void it. Maybe I’m naive.
Michelle is right, of course, about the perils of bipartisanship, but it reared its ugly head back in Bill Clinton’s last year when both parties, kneeling before the Great God Greenspan, created the perfect storm that has wrecked our economy. The Dems, out to appease The ACORNs of our country, pushed the mortgage business into unhealthy lending, and the Repubs, chanting the mantra of deregulation, opened up Wall Street to the huckstering of “derivatives” that aren’t worth the paper they are printed on.
Only now is Washington starting to wake up to the angry mood of the public that has had it with business as usual, both in Washington and on Wall Street.
116,000 employees translates to $3,870 per employee. Most of these employees were promised this bonus consideration upon hiring. Therefore, you can either pay what was promised, or have a nice class action suit that significantly more expensive.
And, by the way, having spent over 20 years in the insurance industry (however, not an employee of AIG)…I can tell you that:
1. Getting a job in the industry is not that difficult despite the current economy…in fact, the insurance industry tends to thrive (or certain facets of it) in a crap economy (claims, underwriting, and actuarial for example).
2. If AIG fails…so do a whole menagerie of other insurance companies who rely on them for reinsurance and quota share deals (captive..bundled etc). Then…the trickle down of fewer big insurers increases premium across the board…and nails the hell out of the private citizen and small business operations.
In short…a majority of you don’t know what the hell you’re talking about…and rather than complain (and making gagging noises Michelle)…you should cheer on AIG for telling the Govt in no uncertain terms that they are still a private business making their own decisions.
Then, kick President Obama in the ass for not defining how the bail out money should be used. Because, if there is no specific outline of “not using the money for bonuses” then there is no recourse legally or otherwise to stop the bonuses.
There is a five year old in the White House taking advice from his dog.
Since WE, the taxpayers own 80%, then WE, the taxpayers should have a vote as to whether anyone should be fired. NOT the corruptocrats in congress who should themselves be fired. I still maintain that they should have gone bankrupt. No one should have the power to fire anyone in private business except the Board of Directors or some other boss within the organization. The Federal Government needs to butt out!
If this bunch had guns, their feet would be full of bullet holes.
I am not challenging what Bernanke did with AIG and why. I believe Bernanke is doing everything within his authority to hold the dike together.
However, there is no political will anywhere to fix anything so that the credit markets can start to stabilize. They can’t even get the banks to disclose the extent and makeup of the toxic assets!
Last night’s interview was blaring siren warning to America that Washington is stuck in a muddle and that we may in fact be heading into a depression that we can’t get out of.
“Yea, though I walk through the valley of the shadow of Obama, I will fear his evil”. Sorry for using the Bible to make a point, but there it is.
Posted on another thread, and off-topic, but I wanted you to know…I just heard Rush Limbaugh, just a couple minutes ago, give a huge plug for the tea parties and mentioned the one in Cincinnati in particular. He also talked about the reason for the tea parties and said, “God bless these folks”. High praise from El Rushbo!
All together now…rrreeetttcccchhhhh!!!
Idiot Croissant: I am also in “the industry” and have been for going on 17 years. I believe that your self-interest is getting in the way of your better judgment. It is always different when your own ox is getting gored.
Bankruptcy does not necessarily mean you’re out of business. It means you get relief from contractual obligations so as to reorganize and regain competitiveness or allowed to go out of business in an orderly fashion if the situation is hopeless.
AIG is hopelessly insolvent and those commercial aircraft policies that supposedly make them indispensable can be dispersed to the competition for servicing.
Timmy the Tool is on the case! How much more childish can he get.
And before I forget, someone get that man a Ricola.
________________________
Actually…no. I am removed more than you might think. Currently, I am working on the Liquidation of a rather large insurer that went under in 2001 (who didn’t get a bailout…and took quite a few smaller insurers with them down the hole). Prior to that, I worked in the specialty business for an international insurer who had to place their US business in runoff. They sold that business off because they were using Legion Insurance and Reliance Ins. for a lot of the quota share and treaty business. Legion went under…and all of a sudden, the fronting company holds 100% of the risk. Guess what the fronting company ends up doing (going under as well). AIG is the biggest…if they file for bankruptcy, they write off their liabilities…and the state venues then look to the viable carrier…some states have case law to accommodate that (California as an example).
In short, as AIG writes off their liabilities…the carriers sharing the risk take on more. They are not prepared to do so (especially in the current investment climate). Additionally, in hard economic times claims frequency usually goes through the roof (especially Workers’ Compensation)…so they are already weakened.
What compensation scheme warrants awarding bonuses to employees when the company had a loss of $61.7 billion in its most recent quarter? The previous three quarters couldn’t have been that good either.
Seriously, AIG should be required to disclose the basis for these bonuses because they surely can’t be based on performance. What did these people “produce”? Did they shove a lot of unsuitable investments on unwitting investors just to generate commissions? Did they encourage unsuspecting annuity owners or life insurance policy holders to engage in unnecessary policy exchanges to generate commissions?
If any investor got ripped off by these pieces of sh*t, the gov’t should torpedo the entire entity.
Before the public merely shrugs this off, especially because the public owns 80% of the damn company, it’s time to disclose what these bonuses represent. Is it just for having perfect attendance? If so, give ‘em a smiley face or gold star and send them on their way.
Hey, remember back when even some right wingers were saying we had to have the bailout and we couldn’t let companies like AIG fail?
How’s that workin’ out again?
BuckeyeSam
There are many facets to an insurance carrier. Claims for example does not base their performance on marketing/investing/new clients…
Risk Management is another example…Even Actuarial…can perform with stellar quality. Poor commission based underwriting performance can sink a company despite the above average performance of the previous three. The thing is…the insurance aspect of the company is pretty solid…the investment portion is absolute crap…and continues to be so.
Anyone see the nauseating irony in THAT statement by Odumbo?
We believe you.
Here from the NY Times: ” President Obama vowed to try to stop the faltering insurance giant American International Group from paying out hundreds of millions of dollars in bonuses to executives,..”
These are to Executives, not all 116,000 employees.
The AIG Financial Services company is the out-of-control part of AIG, the insurance company was fine. Bankruptcy would have cleaned out FS and left a solvent insurance company.
The idiot in charge should be fired.
Look – Odumbo is pandering to the disgrutled right now. If Odumbo, Bush and Congress truly cared, they would have made some stipulations prior to giving AIG money. Since this has turned out to not be such a popular idea – WALLA – his kabuki outrage. That’s all he’s doing. Completely disingenuous!
Hey, doofus! (Da One, not Marilyn) There are no legal avenues, let alone a single legal avenue to block those bonuses because you and the other Senators and Congresscritters didn’t require one when you opened the Treasury! As for making the American people whole the only shot you have is to request that Congress repeal the “stumbleus bill.”
Choked up, indeed, ya stupid, incompetent whiner!
Hope is not a plan; not all change is good. The resistance is here; the resistance is now. RESIST!!!!!!!!!!!!
ECS
I disagree that the letter was “snotty.” It made perfect sense to me… contracts are contracts and must be paid. While AIG should never have gotten a bailout in the first place, and while those “retained” employees may not be worth spit (many should be fired going forward), it IS necessary to honor contracts and offer a RELIABLE competitive bonus schedule to attract any kind of talent which could possibly safeguard the taxpayer’s investment at this point. We are going to lose 100% of our investment if AIG’s recruiting stance is “We welch on our debts, and we’re firing people left and right… come join our sinking ship!” This bonus policy is still the correct course of action, even though I have no confidence in AIG’s ability to succeed in this manner.
Bingo. Unfortunately bringing re-instating the Glass-Steagell Act is apparently punishable by death these days.
Thanks for the information. But I still ask, “Who’s getting the bonuses? What are the bases for these bonuses?”
Keep in mind that Bush requested the second half of the TARP money when Obama asked him to and Obama implied that it would be irresponsible for Bush not to request it for him.
In other words, Obama felt it would be “irresponsible” of Bush
if Bush did not release the money to Obama.
There is no economic reason why Obama could not have waited 8 days to take office and request the money himself. The only reason Obama couldn’t wait is that he needed Bush to get the blame.
Bush played the role of “useful idiot” and requested the money for Obama’s use, while Obama went on to blame Bush for it!
Obama got half the TARP money,
Bush got the all the TARP blame.