AIG Spends Millions in "Bonuses"

[Professor S]

Originally Posted by Bond

Could someone please explain how Barney Frank is the Chairman of the House Financial Services Committee? Please!

He is a pretty disgusting individual. While he might have come through this financial mess unscathed, even though he had a huge hand in creating it, I'm certain he'll face judgement in Hell. And I'm not saying that as a joke or exagerration. Barney Frank is a scumbag piece of shit.

BTW, I have further updates on the AIG bonuses, and I apologize for not having a source as I heard it on KYW News Radio this morning. If anyone has information disproving this, I'm open to it as I only have the one source.

I'm going to bold this because I think it's that important and shows that all of this outrage is based on ignorance, class envy and political manipulation:

The bonues contracted by AIG were given to keep their executives employed while they disassembled poorly performing parts of the company. Essentially, many of these highly sought after employee's positions were going to be gone in a year or so. They were contracted to receive these bonuses as compensation for staying on through the end and winding down aspects of the company, selling off assets, etc. in an effort to reduce the financial damage the company would accrue if they simply shut these areas down. Without these guarantees the executives just could have found another job with more security and AIG would not be able to find anyone to do this work without promising bonuses at the end of their tenure. Basically, their job was to eliminate their department and any kind of job secutiry they had.

The reason why many of these executives received retention bonuses after leaving the company is because they did exactly what they were contracted to do. The retention bonsues weren't to stay indefinitely, they were to stay until they finished the job.

It's estimated that these executives saved or are saving AIG the better part of a trillion dollars by winding down those aspects of the company, and because our government believes it has to save AIG, they defacto saved the American taxpayer and government hundreds of billions of dollars.

So in the end we are crucifying these executives for taking millions in bonuses when they saved and are saving the taxpayer billions in bailouts for bad investments and debt.

And for the record not only did the current administration know about these bonuses... but they actually approved them. But why should hipocritical populism bother anyone?

The bottom line is that we already had avenues to help failing companies before all of this stimulus nonsense started taking place: It's called Chapter 11 Bankruptcy. File, re-organize and come back stronger. If you can't file Chapter 11 and have to file Chapter 7, then so be it. Chapter 7 means your such a failure that you can't be saved, and I see no reason to subsidize that level of failure and mismanagement.

Instead the result of the stimulus plan isn't stronger companies but instead has enabled the continuation of failed business models, created class envy, empowered the government's moronic interference with financial healing, created hatred of wealth, populist anger, non-thinking Congress only worried about their re-election, and a President who since the election has done more continued campaigning than governing.

But all anyone of consenquence seems to care about is Rush Limbaugh, John McCain's daughter, AIG bonuses that add up to .097% of their bailout funds, and Glenn Beck shedding a few tears on his TV show. Meanwhile the congress is getting set to trample over the Constitution yet again over a non-issue, and the worst part is even if the government passes the targeted tax against the executive bosuses, THEY WON'T STICK. Doing that is incredibly unconstitutional. These executives will simply sue the government, the case will go to the supreme court and the bonuses will be given back, likely with court costs attached because of the outrageous unconsitutional natute of all of this panicked idiocy.

In the end its all pointless, and I end up feeling like I'm watching Nero fiddle while Rome burns.

[BreakABone]

I think you are a tad over exaggerating, but I agree with the gist of your speech.

I will say, I think its easier having some of these talks in the private as I came around a bit after talking with Bond, and just coming from a city that actually does heavily rely on these "bonuses" and more so recent news.

The fact of the matter is, on a personal level, I understand why everyone wants to find a scapegoat. We are in a terrible disaster and people need a place to lay the blame. We hear the gov't is giving out free money to help companies that got us into this mess and that money is trickling down to make the rich... richer.. it gets your blood boiling or it should, but honestly even if we strip them of their bonuses.. I have no idea how that would help anything more than someone's ego.

It is their money for the time, and they will just need to be more cautious in the future.

The only bright spot I see from this, is hopefully companies that receive bailout money are more inclined to pay it back ASAP so they can avoid public scrunity as much.

[manasecret]

What the AIG CEO said before Congress and the news I've heard from NPR has placated me that we're not being defrauded by giving these bonuses. Prof. S's news puts the nail in the coffin of any outrage I had over these bonuses.

I say to Congress: Move on.

[Professor S]

Originally Posted by manasecret

I say to Congress: Move on.

There lies the problem... move on to what? We're staring intently into a congress filled with dead, unimaginative and dishonest eyes. They've pretty much done everything they've set out to do for the economy, and now that it's done, they're talking about a Trillion more $ in bailout (we've barely started spendign the first bailout).

I don't think any elected official thinks more money will do anything, but they'd rather put us further in debt than give the impression that they're subject to the whims of the markets.

It's like they're afraid to admit that this is a situation that simply needs time to work itself out (including the stimulus money thats already been allocated), and are instead clamoring for anything they can latch onto to give the impression that they're doing something because they're more afraid for themselves than the people they represent.

Our congress needs to get beyond stage one thinking (an unthinking response to an immediate goal) and stop reacting instead of responding with a cohetrent dialogue that truly includes all sides and points of view. Sorry, but there has been no bipartisanship from anyone during this mess.

Intellectual honesty in politics seems all but dead, and looking at public opinion polls I think people are starting to see it for themselves.

[manasecret]

I think they should do what they did for these bonuses but for all the other billions of dollars going out. I think they should all be monitoring where that money is going and checking for any defrauding there.

I guess I'll rephrase: Congress, slow down.

[Bond]

Common sense from the Washington Post's Ian Bremmer: Outrage Is an Unaffordable Luxury.