AIG Spends Millions in "Bonuses"

[Professor S]

We haven't talked about the economy in a while, but I think the latest news about AIG spending millions in bailout money on employee retention bonuses warrants it. This situation has shown our goverment (republicans and dems) to be hipocritical, our news organizations to be lazy and/or corrupt and our populace to be simple minded and spiteful.

I have no issues with the bonuses. For the following reasons:

1) AIG is contractually obligated to pay them. If they don't pay them, they will be sued and even MORE bailout money will be spent on lawyers and court fees and they'll end up paying out the money anyway. Part of the problem with propping a company up to keep them out of bankruptcy is that they are still beholden to their existing contracts. If AIG filed for bankruptcy, or was allowed to, this wouldn't have been an issue. But, WE bailed them out so WE have to pay for their contractual obligations.

Do you see any journalists pointing out this obvious fact that takes 3 minutes of Googling to discover? Because reason and honestly is meaningless in front of populism in a crisis.

2) We knew about this is January. Why didn't the government get up in arms about this then? What about the news orgs (frightening how lock step American journalism is with this administration)? I'll tell you: The government still had billions they needed to give to AIG. Now that they're (hopefully) done, the government can now turn on them, yell and scream to high heaven about AIG's irresponsibility, when that irresponsibility never stopped them from giving any money in the first place or the three times after that.

Like I said a few weeks ago: The government wants to give these companies money to survive, many of whom never asked for it and instead were "asked" to take it, and then punish them for taking it and dictate to them what they can do with it. Why would you expect a company to change what they do with money when you don't allow them to fail or at least give them legal options to postpone or forego their obligations.

This all simply seems very calculated. AIG has always been identified as one of the worst run companies of this entire debacle, and yet we continue to feed the beast and then punish it for eating what we feed it! If we're going to throw trillions into toxic investment, we can't shocked and outraged when we get sick from them. If you don't like it, blame those who invested the money, not those who dared to accept the help but were never asked to change nor given the avenues to affect change.

In the end, this entire controversy is populist NONSENSE. I don't care if AIG has to pay out billions in bonuses (a small percentage of the bailout money). What I care about is if this bailout actually works and if companies are allowed to get past the old mistakes, learn from them and then work towards a new, smarter business future. Right now the government, news orgs and populace seem to want to simmer in their own justified anger instead of allowing this process to take place naturally ragrdless of whether or not it leaves a sour taste in our mouths. Medicine rarely tastes good.