I'll state right up front that I'm a big fan of President Obama and expect great things from his Presidency. However, if the executives from AIG don't end up in jail, I'm going to want a new Attorney General. Let's call this AIG/AG demand "An Eye for an 'I'."
Note: comment #4, from me, has this heartening link to the NYT, which I'm inserting here as an edit: Obama Tells Treasury Chief to Block A.I.G. Bonuses.
Like many, I'm disgusted with the behavior of company executives who benefitted personally from the Federal Bailout. AIG executives alone are being paid $165 million according the Associated Press (via yahoo news). This bailout was supposed to be about getting the country's economy on track, not about adding another yacht or two to the fleets of white collar pirates who are distinguished by their greed and power over the fates of normal working (and retired) people. Some of those retired people are now "formerly retired," as costs have risen and the value of 401K's has evaporated.
Even worse than the bonuses in many ways, we read that AIG passed large sums of bailout money directly to Goldman-Sachs. In case you don't know, Goldman-Sachs was one of the key players in raising the cost of oil and gasoline through its speculation of futures and its ownership of nuts and bolts parts of the oil industry, including a major fraction of distribution companies. It wasn't OPEC or problems with foreign oil that caused the price surge. In fact, as reported on marketplace, supply was actually higher than normal during the period when prices were also high. Impossible? Under normal economic circumstances, yes. However, with war profiteers ready to act, gas prices shot up in a way that seemed connected to Middle East conflict. This sounds to me like racketeering and treason.
Time for heads to roll.
Copyright © 2009 James B.
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Comments: 37
In fairness, they aren't the only company to use US taxpayer bailout moneys to find businesses overseas!! GM sent money to Brazil!
Are we blind, ignorant, uncaring... being lead like sheeps? What is it going to take to get abuses like this stopped!!
Keep in mind this unbelievably dysfunctional notion:
that some of the same Gougers who got the country, and part of the world, into this mess
-- the Insurers at AIG--are some of the same ones who can only get us out of this mess......as pointed out by the author of HOUSE OF CARDS, William Cohan.
And, also: When you mention Goldman-Sachs as a major oil-speculative profit center: You might want to mention that Ex-Treasury Secretary Henry Paulson was CEO of that firm in the 1990s.
How wonderfully politically incestuous!
Obama Tells Treasury Chief to Block A.I.G. Bonuses, by Helene Cooper, March 16, 2009, New York Times.
I hope that the above comment and link make you feel better about this mess- it sure helped my day!
Our oil crisis has always been a sham. In 1974, during the original oil crisis, I saw news footage of the tankers waiting off the coast in Huston because all the oil storage tanks at the docks were full. Meantime, we were paying 3 times as much for gas, and waiting in gas lines to get it. (gas-less Sundays, too) And now, other sectors of the economy are finding ways to shaft us. I hope someone finds a way to prosecute them.
Bob, you're absolutely right. I'm a firm believer in conservation, but the oil crises to date have just been greed-fests.
Patricia, I'm with you. I think that we have the right man to stop the thievery- certainly the President is our best hope to to so, in my opinion.
AIG bonuses?
Who's fault was that? Business does what business does .. it was *us* ... *we* jumped into that cauldron full tilt in panic mode; passing the "bailout" and the "stimulus" without much thought or eyes-on the "details".
Haste makes waste. But we are ignoring a lot of the old sayings these days. Another that applies to the stimulus, the bailout, and most probably to this "budget" silliness run-around ... "Fools rush in where angels fear to tread".
We are fools for allowing this stuff. And both the Bush Admin and the Obama Admin are filled with fools for proposing and rushing in panic to pass them.
Business? Business does what business does. Make money and take care of contractual obligations. Or they fail.
Government on the other hand ... lately it seems like what government does best is pass the buck instead of the buck stopping with them (another old saying implying that Obama et al as well as Bush passed the buck on their responsibilities irt that money. They handed it out too fast with too little thinking on their part, and too much pressure from *us* to {{{JUST DO SOMETHING!!}}}). It seems to me as if those bonuses are more a government panic-mode problem than a big business problem. But, big business is as good a fallguy as they come ... arrogant, rich, never answer their own phones ... +shrug+
It may seem like common sense to us, (and to Obama et al in hindsight) but ... well, that's what written contracts are for; to make clear what each party considers the "common sense" aspects of the contract. To write down item by item what each party is expected to do or not do irt the other party and the contractual issues. To make sure all parties understand the position and expectations of all other parties.
Obama et al are looking at this with loud and finger-pointing regret because of their own negligence irt what they, in their haste and panic neglected to do before handing out that money. They not only failed to read the fine print, there wasn't even any fine print to read.
Obama and Bush et al "signed" a contract that had no terms except that those who received the money were to spend it. +shrug+ .... +and shrug+ AIG fulfilled their end of the contract (as far as I can tell from what I've read and seen in the news up to this moment in time).
What I mean is, seems like someone let the horses out of the barn without their bridles. Why blame the horses if they run off to the back forty. The blame is on the ones in charge of putting the bridles on (Obama, Bush, both admins at one time or another). +shrug+
The present administration should just learn the lesson and move on making sure the same mistake is not made again. Put some fine print in any future contracts - um ... first of all in future, have a contract and then put some fine print in it so this doesn't happen again. If there is actually an agreement in writing, stipulations, rules, guidelines, guarantees , conditions, spelled-out consequences and this does happen again, then it can be alllll AIG's fault and responsibility.
And you would think that the CEOs themselves would have some sense of shame. Or a bare-bones understanding of public relations. It never occured to anyone to say "Um, guys, you realize that if we pay you these bonuses, we won't be able to guarantee your safety from the angry mobs with pitchforks?"
Thanks for the article and I'm so disgusted I'm to the point of letting these companies sink or swim on their own.
Brian (glad 1-20-09 came!) T., Mar 17, 2009, 10:37am EDT
Commenting for Paying It Forward!!!!
If this is true, his may be the face and career to go with all the anger out there.
How do you have contractual obligations to pay millions in bonuses to people that ran your company into the ground?
Julie Ann Dawson , Mar 17, 2009, 9:01am EDT
Financial service companies (and execs at other large corporations) set up compensation in the form of bonuses not neccesarily to award performance, but to avoid paying payroll taxes. Bonuses are taxed differently than payroll.
John O., Mar 17, 2009, 9:13am EDT
I agree that the government should have put in more checks and balances on the spending of bailout money, but that doesn't make me feel any more generous towards AIG.
John makes a good point. I don't even have a problem with the concept of bonuses, but I do have a problem with executive compensation overall, in the US, and with the idea that executives could receive any bonuses when their company's stock price fell 95%. A LOT of people lost a lot of money because of AIG. Rewarding that kind of mismanagement is indefensible, no matter what their CEO blathers on about. That kind of performance would cost many regular people their jobs, and did cost many regular people their jobs and/or retirement savings, so why are executives immune from incentive-based pay?
God Bless and have a wonderful Sunday!
There may be and seems to be cause for anger at AIG but really .. that money is a drop in the bucket AND apparently AIG thought the matter had been settled ... um ... because they had a contract for the settlement and the POTUS himself signed off on it.
+big slow shrug+ If it turns out that I am wrong and the POTUS actually didn't sign the instrument containing the offending bonuses, then I'm wrong and I apologize ahead of time.
But if I am correctly (if simplifiedly) understanding it, then he did sign that instrument; and he is the one we should be mad at and AIG should, in this very narrow and one-time way be considered just another victim of Congress and Admin inability to take actual responsibilty for their actions. (Lip service there is aplenty .. but actual responsibility I see none).
What I see from the POTUS et al, IF he signed the document as I am under the impression he did, what I see from him is a lot of "whoshotjohn" as Judge Judy would put it. A lot of calling rain something that it isn't.
... but I do have a problem with executive compensation overall, in the US, and with the idea that executives could receive any bonuses when their company's stock price fell 95%. A LOT of people lost a lot of money because of AIG. Rewarding that kind of mismanagement is indefensible, no matter what their CEO blathers on about. That kind of performance would cost many regular people their jobs, and did cost many regular people their jobs and/or retirement savings, so why are executives immune from incentive-based pay?
James B., Mar 18, 2009, 9:02pm EDT
"Great article. I was on some of those "we are going to die" trips in high school and college, like the one where a skunk family invaded our tent in a big snow storm and ate through the plastic of our freeze-dried food, but didn't eat much food. You know it's bad when the skunks won't touch it... We had two A-frame tents facing each other, one with all our gear and one with the three of us. The skunks were about two feet away, in the other tent, but we could sure see them. Luckily, they didn't spray us. Unluckily, we weren't too keen on eating the food that they had rummaged through." James B!
Thank you for that story that was great!
PIF
Got a toothe ache cya later.. Oh yea I dont have Dental... 1 more for ya! lol
You do not want to get me started on this subject!