Someone said recently that the heavy taxes bonus-recipients at AIG may be forced to pay isn't enough.
MMmmm....
Maybe I'm incorrect; I've been wrong before and will be again, no big deal. And in that case I have no problem. In fact, I'd be happier if AIG *was* actually the main and / or only bad guy in this particular narrowly defined point of contention regarding the bonuses.
But if I am correct, I agree it's not enough.
What would be enough?
What might be enough would be if the fingerpointers would all take a gander back in the direction the other three fingers are pointing, then take a chunk of the responsibility they earned and accept an equal part of the fault for the contract signed into law so very kneejerk quickly in panic in the first place {{{'we have to do something nowwwwwww'}}} .
Why do I say that? Well, currently, those who voted and signed it into law are trying to "fix" their mistake by blaming and punishing the other party to the contract.
Those who voted and signed it into law in the first place, are fixing blame on only one fourth of the problem imo (one finger points outward and three fingers point back); they are fixing blame on the one fourth that is not at fault irt this particular part of the bonus issue.
It does not matter to me if that provision got into the bill/law by mistake or by design (I know what I think about it but it's irrelevant how it got in). It was / is in there. It was / is in that legally binding, voted on, and signed contract. Those who wrote it, pushed for it, endorsed it, lobbied in favor of it, and signed it into law should have at least read it before signing it. If they did read it and they knew about the provision, then they should only be yelling at the one they see in the mirror in the morning.
Once it was signed, it (as well as whatever else might be in there waiting to explode)... once it was signed, it and the bonuses became only the fault of those who wrote it, pushed for it, lobbied in favor of it, voted for it, and signed it into law (either knowing or without knowing what was in it).
Signed in haste, regretted at leisure.
Or rather, signed in haste regretted in private, then avenged in public by blaming someone else (by blaming the execs who thought the bonuses were already signed off on because ... well, because they had been signed off on). +shrug+
1. (Law) The agreement of two or more persons, upon a sufficient consideration or cause, to do, or to abstain from doing, some act; an agreement in which a party undertakes to do, or not to do, a particular thing; a formal bargain; a compact; an interchange of legal rights. Wharton.
2. A formal writing which contains the agreement of parties, with the terms and conditions, and which serves as a proof of the obligation.
recommend this
email
print
link to this page
Comments: 27
As reprehensible as these undeserved bonuses were, I don't believe in ex post facto laws and thought they were against the constitution. The bigwigs in these companies have been treating the companies like their personal piggy banks for so long they actually think they are by now!
There is no way i hell that a person with a multiple million dollar annual contract without bonuses cannot be replaced with competent people without undeserved bonuses. When those jobs were filled, there were multiple candidates for each of them and the chosen one is not necessarily any better than some of the others. I'm quite sure some of the passed over candidates would step up to the plate and do those jobs, in some cases not as well but in some, most likely, better!
American business needs an awakening and a reevaluation of priorities in my humble opinion. And stockholders need to remember that those persons work for them!
You've noticed that about some people, too, mmm?
In addition to my agreement that some business people may harbor a possible unwarranted? sense of entitlement, here's another example of that same thing for you or anyone who is interested:
click here
They possess an un-American sense of entitlement, as far as I'm concerned.
Joe T., Mar 20, 2009, 8:14pm EDT
I'm not sure I agree that they should be fired. But replaced? Probably. Just as soon as possible.
In some ways, I agree with you. If those persons actually had contracts calling for huge super payments for accomplishing nothing, then they should get their money. And whoever wrote those contracts should be fired and replaced!
James C., Mar 20, 2009, 8:22pm EDT
Lee Y., Mar 21, 2009, 5:01pm EDT
It's definitely not such a good thing that big bonuses were left in the bill.
But when someone "buys" a business it's really up to that 'someone' to know what they are buying. We'd like to think that the owner of that spiffy looking classic caddie has told us all there is to know about it --- will the tires hold up for the rest of the year, when was the engine tuned last, does the airconditioning work, is it yours to sell, are there any liens? But that just doesn't happen all the time. Not in the used car business, not in the housing market and not on wallstreet. Guess that's what the old saying, "Let the buyer beware" speaks to.
I think what makes it so outrageous is that the managers and officers of AIG failed and the contract is written in such a way that they get their bonuses anyway.
Joe T., Mar 20, 2009, 8:14pm EDT
Which should have meant the "buyers" would be a lot *less* panicky than they were, a lot *less* hasty with their pens, and a lot *more* careful about what they were buying into, about what was left in, and about what was left out of the final "contract" they all eventually signed off on.
Because, if the facts are correct that the bonuses were allowed by law due to language and/or intent in the stimulus bill; that Congress voted for it, and Obama signed it into law ..... How ever that language got in there, once it was signed, it and the bonuses became only the fault of those who wrote it, pushed for it, lobbied in favor of it, voted for it, and signed it into law. Whether they knew or didn't know it was in there, whether it was what they voted on or not; whether it came back to conference or not; I think they all should have taken time to find out exactly what theywere signing before they signed it.
I think what makes it so outrageous is that the managers and officers of AIG failed and the contract is written in such a way that they get their bonuses anyway.
Joe T., Mar 20, 2009, 8:14pm EDT
If that means retroactively putting some burden or meaning onto, or adding something new to or some new terms to an already agreed upon and signed contract ... if it's not against the law and/or against the constitution it surely should be.
Is this a passable example of ex post facto? ...
Imagine if I went into K Mart and bought a pair of shoes. It's a contract kindof.
I gave K Mart an amount of money they set. I paid them the money in the manner they set (let's say it's cash because they don't take checks). I left the store according to their rules for not walking around with a bag of already paid for stuff. I follow the rules they set for buying shoes from them. And for leaving the store.
I go home. I have worn the shoes for a week already and I get a notice in the mail that the guy who put the prices on the shoes made a mistake and K Mart management is garnishing my pay for the difference. And charging me interest for it too. Even though I followed the rules as the K Mart manager set them out for me (in this narrowly paraphrased instance) and according to the rules at that time, I "signed" a contract to buy those shoes for that set price.
As reprehensible as these undeserved bonuses were, I don't believe in ex post facto laws and thought they were against the constitution.
James C., Mar 20, 2009, 8:22pm EDT
Your analogy about the young man who slept in the attic doesn't really work. There was no contract, so he was committing a crime. In the case of the CEOs, it is the fleecing of a company by a group of people (the CEOs) who seem to think that they are worth more than they are.
+shrug+ It kindof makes sense from that pov, but now that bonuses that "require nothing of the CEOs in the way of success" have gone out... guess it's a big deal even though those bonuses are like a mosquito bite compared to the shark hunk the rest of the deal is going to take from us.
Of course, Lee, writing contracts for CEOs that require nothing of the CEOs in the way of success is just plain stupid.
Joe T., Mar 21, 2009, 7:43pm EDT
But that would be me. Another CEO might not agree... And he can make his decisions for his own company. CEO's can run their business any way they want.
Even stupidly, if that is what they desire. +shrug+ And once that business fails from stupidity (which would happen in a much more timely manner if government stayed out of it), continuuing to artificially prop it up is .. well, it's a circle. If the ptb decide it's absolutely necessary to continue to prop that business up for whatever reasons, well, in that case it may be absolutely necessary. But just because it's viewed as necessary, doesn't mean propping it up isn't also stupid.
It's kindof like having gangrene ... it's stupid not to chop that toe off, but someone might think it's necessary to keep it because of a host of very good reasons. Well, there might be really good reasons for keeping that toe, but that doesn't mean keeping it isn't also really stupid. Chop a toe off now or chop the leg off later ...
But, irt the matter at hand ... I agree --- mmm I agree it was just plain stupid for the stimulus bill to have been voted on, jammed through in a panic, and signed into law containing that regrettable stipulation (and who knows what all else).
Of course, Lee, writing contracts for CEOs that require nothing of the CEOs in the way of success is just plain stupid.
Joe T., Mar 21, 2009, 7:43pm EDT
How is it AIG's stupidity? How ever that language got in there, how ever those previous terms got in there, once the containing bill was signed, it and the bonuses became only the fault of those who wrote the containing bill, pushed for it, lobbied in favor of it, voted for it, and hurriedly signed it into law either without knowing the bonus stuff was in there or knowing and approving of it, or knowing but too panicky to stop the signing to get it out.
This is not our government stupidity. It is the stupidity of the board of directors at AIG.
Joe T., Mar 21, 2009, 7:43pm EDT
It wasn't the actions that were the same, and wasn't even the circumstance on which I based that analogy.
My analogy was based on the sense of entitlement the young man felt (or I assigned to him ... since he didn't say he felt that at all) ... But in any case when you take something from someone that doesn't belong to you, something you have notearned, which they had given to them or for which they have worked, and then after a while you begin to feel like it's only "fair" that you get a little more given to you off the top of what other people make because "they have more than they need" ... that's a sense of entitlement as surely as the sense of entitlement some of the CEO's may feel. Mmmm?
Your analogy about the young man who slept in the attic doesn't really work. There was no contract, so he was committing a crime.
Joe T., Mar 21, 2009, 7:43pm EDT
But as soon as what I thought then was panic and still think was panic on the part of Congress and the Pres took over, and they pushed through voted on and signed into law what had previously perhaps been an AIG greed problem, well, it became their problem, their fault, and their responsibility to fix - out of their pocket or their publically professed shame. I would like to have seen them take a pay cut to pay for this bonus problem and to make up for the aggravation factor, rather than see them go the ex post facto route. +shrug+
Maybe because that was an alternative suggested (? not saying it was, just saying maybe it was)... well, maybe that's why some repubs also voted for that "ex post facto" tax.
American business needs an awakening and a reevaluation of priorities in my humble opinion. And stockholders need to remember that those persons work for them!
James C., Mar 20, 2009, 8:22pm EDT
Not to mention some of those execs don't pay American taxes... what is Congress going to do about that? It is a world wide company as I understand it.
Knee jerking waste of time now in my opinion...
Chris Dodd ... agreed
Admin ... agreed (possibly Bush as well as Obama
Treasury .. agreed (probably under Bush, but Geithner as well)
Lying? ... Probably but for now "they didn't know", "it was a mistake", "it wasn't us" "let's get them for this.
knee jerk? ... from passing and jamming the "stimulus" through so fast to taxing and "retrieving" lawfully received bonuses, yep
Thanks for stopping by John. :)
I think the perspective that is missing here is that the CEO and board work for the shareholders, and they (we) were fleeced. The very existence of these bonuses under conditions of nonperformance of duties, in fact abject failure to maintain shareholder value, reeks of fraud, illegal collusion between the board of directors and top executives, and a host of other problems. Congress was utterly foolish to pass the bill that they did, but were they wrong to thing that the Secretary of the Treasury would employ even a hint of fiduciary responsibility himself? Obviously yes, in retrospect. I, for one, am not surprised by the depths of corruption in the Bush cabinet (favorite haunt of traitors and thieves). Is Congress wrong to try to correct the problems caused, perhaps, by a misplaced trust in a top public official? Well, the Tres Sec was a Republican appointee, but a presumption of competence can be excused.
Anyway, the whole thing is a mess. One a long time coming. The people paying for the mess are all the little people, the non-CEO working people, while those who caused, politicians (of many flavors) and business people, are growing fat.
I don' like it. It feels wrong. As long as we don't break the Geneva Convention, I'd like to treat these pirates as enemy combatants- they've done more damage to our economy, collectively, than any of our supposed enemies.
I expect people to admit and correct professional mistakes they've made, and I even include Congress under the "people" designation. I do agree that they shouldn't make things worse while "correcting," but I have nothing but derision and disgust for the bonus takers.
I also have to say that I really don't know how to fix the economic problems. I'm not a professional economist (that might be a good thing), but I'm not an amateur one either.
So.... how do we get out of this mess? I'd love to hear some suggestions. I'm all for taxing the rich more (it really appeals to my sense of justice), but maybe (well, certainly) we need to do more, and I just don't see how to judge the various plans.
Mmm.... if it is missing, maybe it's missing for a reason.
Let me say it could be that all of us are kindof shareholders in AIG ... like a cousin twice removed by marriage to a third cousin for most of us. But, THAT (capitals just for emphasis) THAT isn't the point here at all.
If the actual shareholders were fleeced ... it's their business. If they (we?) should have been more involved in the business of who and how that business was run ... well, the time for that kind of watchfulness is done. It was done a long time ago.
AND the 'doneness' of it was negotiated and agreed upon by several parties at least twice over. Once when Bush et al were handling it, including then head of the Federal Reserve Bank T.Geithner ( Geithner and Summers AIG Bonus Timeline ).
After that, and more recently, the 'doneness' of it was again negotiated when Obama's stimulus package was being written and haggled over, then shoved through congress. As I think you know by now :) ... but for those who may not have seen it yet, as far as I know the following page is not wrong:
"Clearing the way for the AIG payouts"
March 19, 2009
" . . . [Dodd] says the Obama administration insisted he modify his proposal to rein in bonuses at companies getting billions of dollars in financial bailouts so that it would only apply to payments agreed to in the future _ thus clearing the way for the AIG payouts."
" . . .In the case of the bonus language, the Obama administration asked to confine the executive pay restrictions to contracts made after Feb. 11, 2009, fearing lawsuits if they tried to reach back further.
They also argued, as President George W. Bush's team had before them, that enacting strict compensation limits could hamper companies' ability to attract and retain vital talent at in tough financial times, according to aides who spoke privately about the internal talks.
James said:
Lee, thanks for the post.
I think the perspective that is missing here is that the CEO and board work for the shareholders, and they (we) were fleeced.
I fully and whole-heartedly concurr.
But I wonder if you are ready to take that a step further to also say the one who pushed hardest for that stimulus bill to be passed ... before anyone had a chance to read it (to me that speaks either of haste born of panic, a push to get things passed before anyone found out they were in there, and/or a combination of the two), and the one who actually signed it into law was more foolish; because he is the one who should have led congress away from instead of leading or following them into the land where angels fear to tread?
" . . .where angels fear to tread."
James B. said:
Congress was utterly foolish to pass the bill that they did,
Lee responds,
I'm still taken aback by this seeming flight from topic when someone brings it up.
I see where you are coming from but let me go back to something I said when I first began talking with you about this. (I think I said it to you ... or maybe I alluded to it --- ah! ---- in any case ...) --- For the sake of moving this conversation forward, let's just say everything is Bush's fault and T. Geithner had nothing whatsoever to do with the AIG bonuses back when he was head of the Fed ---- *I* don't subscribe to that but ... "let's just say" it's so.
So?
Bush's so-called corruption did not make Obama lobby for, tout, push through, or sign that stimulus bill (the one containing the terms for the AIG bonuses), into law. +shrug+
Neither Bush's so-called corruption nor the "inheritance" he left for Obama forced Obama to do anything.
All on his own Obama pushed it through and signed it either because of a need to push it through so all that pork would go through before it got too much notice. OR he pushed that stimulus package through without reading it himself because he was panicked and had to {{{just do something... anything!!}}} ... {{{!!sign something pass anything!}}} so it would appear he was being Presidential. OR so he himself could feel better for having done something. OR he didn't take time (or couldn't be bothered) to read it himself and just signed whatever Reid and Pelosi put in front of him (Senator Dodd and some others might have something to say about that one, but I include it here as one very remote possibility).
In any case, President Obama signed that stimulus bill into law as a consequence of one or a combination of two, more, or all of the above. Bush did not put a gun to Obama's head and make him sign those bonuses into law. Which is what happened when Obama himself signed the stimulus bill into law. Once POTUS Obama put his signature to that bill making it a law, the bonuses and anything else arising from that stimulus bill became his baby.
+shrug+ Bush is out of it and cannot be blamed or referred to irt anything signed into law the day Obama signed the stimulus bill. It's Obama's baby now. Whatever excuse he uses for having to have the stimulus in the first place, he chose to sign that particular bill. Whatever happens next, whatever else happens as a consequence of the stimulus bill being signed into law can not be referred to as Obama's "inheritance" from Bush. Whatever happens is Obama's legacy (including the fact that he himself signed those bonuses into law when he signed his "stimulus" bill into law).
James B. said:
Obviously yes, in retrospect. I, for one, am not surprised by the depths of corruption in the Bush cabinet (favorite haunt of traitors and thieves).
No.
But they were panicked and pushed that bill too fast. Yes. They either had to be panicked, stupid, or in a hurry to make up for lost time by pushing that stimulus bill through so fast.
Panic, stupidity, and hasty mistakes ... really bad resume material in public officials imo.
Every single one of them should have insisted on at least 5 days to peruse and dissect that bill .... two weeks would not have been out of the question. No Time? There certainly was time --- time to NOT make an AIG bonus mistake. Time to do their jobs. Time to not panic. There certainly was time 'cause the problem wasn't going anywhere and it wouldn't be much worse today had Congress taken some time to make sure about what they were signing.
James B. said:
Is Congress wrong to try to correct the problems caused, perhaps, by a misplaced trust in a top public official?
James B. said:
Anyway, the whole thing is a mess. One a long time coming. The people paying for the mess are all the little people, the non-CEO working people, while those who caused, politicians (of many flavors) and business people, are growing fat.
James B. said:
I expect people to admit and correct professional mistakes they've made, and I even include Congress under the "people" designation.
Me either.
I can't claim to be even as much as amateur. +big 'ohwell' shrug+
James B. said:
I also have to say that I really don't know how to fix the economic problems. I'm not a professional economist (that might be a good thing), but I'm not an amateur one either.
If only Obama had tried / would try to run the country's economy and budget the way he and our husbands say we should run our private home budget and economy ...
Orrrrr .....
IF we had spent the stimulus the way it was supposed to have been spent (and who knows if it has or hasn't been ... Geithner wasn't saying last time I listened to news...),
IF some programs had been frozen --- uh .. I don't mean stopped but maybe if spending had been kept at last year's level or lower ------ which according to obama / libs / dems was outrageously high in the first place, and might have been enough...
IF only last year's programs had been kept, instead of a whole lot of new spending being started or written in for new programs on top of the old ones (or for new more expensive programs in place of the old ones) ...
IF we weren't spending money we do not have and will never be able to pay back on things that really really could have waited .... :(
??
James B. said:
So.... how do we get out of this mess? I'd love to hear some suggestions.
If I owe the credit card company more than they agreed to lend me in the first place (card maxed and more) ... I leave the credit card at home for a couple of months. If it remains a problem, I cut it up and forget the number --- pay it off ... and then MAYBE, I apply for another or begin using that same card again.
No planning needed. +shrug+ Just stop spending and don't start new spending until old debt is paid down ... or at the very least brought down big time.
James B. said:
"... and I just don't see how to judge the various plans. "
James B. said:
"... and I just don't see how to judge the various plans. "