Rewarding failure

[Ravi]

If AIG is contractually obligated to pay these bonuses there is nothing the government can do about it...without breaking the contracts. I don't think anyone wants to go to a place where the government can tell employers they cannot honor their contracts with their employees.

 

[DavidS]

Every time Frank gets a paycheck, we're 'rewarding incompetence.'

 

[Gunny]

Funny, gm and ford and chrysler didn't go in to bankruptcy and because we were bailing them out we told them to renegotiate what they paid their people, did we not?

WHY in the hell should these asses that caused the majority of the crash, get away with this....?

They've taken near 10 times the money gm took...? And they are sending the money overseas too...?

Care

Watching the news this morning, they said that it was their London branch, which incidentally happens to be credited with the majority of the mismanagement and incompetence that has been pointed to as the reason for the collapse.

Personally? I think that they should just tell them......either (a) we bail them out and they say good bye to their bonuses, or (b) we don't bail them out and let them go broke.

I choose option (b).

Can't. AIG going under would probably be the catalyst that sends what's left of the world's economy into a diving tailspin. For all of Obama's and Congress's posturing, they, AND the AIG exec's KNOW that.

For those who support completely unrestrained capitalism, it now holds you by the balls. How does it feel?

 

[toomuchtime_]

If AIG is contractually obligated to pay these bonuses there is nothing the government can do about it...without breaking the contracts. I don't think anyone wants to go to a place where the government can tell employers they cannot honor their contracts with their employees.

Apparently Barack Obama wants to go there. He says he's ordered Geithner to try to force AIG to not only refuse to pay further bonuses they are contractually obligated to pay but to try to get back the bonuses already paid; furthermore, he promises to deduct the bonus money from the next bailout money the government gives to AIG. Apparently, Obama has been planning to give AIG $165,000,000 more than they need, but now he may not.

 

[DavidS]

If Ford can successfully negotiate new wages, benefits and salaries with the UAW, why can't AIG re-negotiate with executives who have more money than they know what to do with? They should've done this back in September and we should've made the money that we were giving them attached with limits on executive pay. Stupid for BOTH administrations to give AIG money uncondtionally.

 

[Kevin_Kennedy]

Funny, gm and ford and chrysler didn't go in to bankruptcy and because we were bailing them out we told them to renegotiate what they paid their people, did we not?

WHY in the hell should these asses that caused the majority of the crash, get away with this....?

They've taken near 10 times the money gm took...? And they are sending the money overseas too...?

Care

Watching the news this morning, they said that it was their London branch, which incidentally happens to be credited with the majority of the mismanagement and incompetence that has been pointed to as the reason for the collapse.

Personally? I think that they should just tell them......either (a) we bail them out and they say good bye to their bonuses, or (b) we don't bail them out and let them go broke.

I choose option (b).

Can't. AIG going under would probably be the catalyst that sends what's left of the world's economy into a diving tailspin. For all of Obama's and Congress's posturing, they, AND the AIG exec's KNOW that.

For those who support completely unrestrained capitalism, it now holds you by the balls. How does it feel?

Yet they need to go under because they're a drain on our economy and a waste of resources. We need to allow the market to correct itself, not prop up failed businesses.

 

[toomuchtime_]

If Ford can successfully negotiate new wages, benefits and salaries with the UAW, why can't AIG re-negotiate with executives who have more money than they know what to do with? They should've done this back in September and we should've made the money that we were giving them attached with limits on executive pay. Stupid for BOTH administrations to give AIG money uncondtionally.

You've got to wonder how many more screw ups like this Obama can have without losing those high poll ratings.

 

[ABikerSailor]

Obama didn't screw it up......the greedy bastards at AIG did.

 

[toomuchtime_]

Obama didn't screw it up......the greedy bastards at AIG did.

With all the anger over the Merrill bonuses and other excesses from financial firms receiving bailout money and with the government already owning 80% of AIG, not pressuring AIG beforehand about these bonuses has to be seen as an Obama screw up.

 

[editec]

Frank: AIG is 'rewarding incompetence'

NEW YORK - The indignation over millions of dollars in bonus payments for American International Group Inc. executives grew Monday when a top lawmaker said he believes it's time to shake up the company.

....

The money was payable to executives by Sunday and was part of a larger total payout reportedly valued at $450 million. The company has benefited from more than $170 billion in a federal rescue. AIG has argued that it was contractually obligated to pay the bonuses.


Frank: AIG is 'rewarding incompetence' - U.S. business- msnbc.com

I understand the contractual obligations. It just pisses me off that we're paying for these bonuses. It is in its most basic form, theft.

First of all we didn't give any company anything as they have to pay it back with interest so lets stop this ignorant demagogy.

First of all we DID buy AIG. The USA owns (and wildly overpaid for) 80% of AIG's common stock.

SEcondly demogogery is when appeals to the people, so you apparently don't know what the word meants

This fact makes the rest of your rant to follow seem pretty silly, doesn't it

Second if I was running a company that the government is threating to take total control of I would also be taking every thing I could get
so that when that day comes I would be able to move on.

Of course you would. And you would be stealing from the stockholders when you did.

Third AIG"s trouble started when they had to pay off the failed mortgages that they were forced to insure by Frank and Dodd there
other insurance holdings are doing well and will help them recover but Frank and team know this and are trying to stop it so they can get there hands on the profitable side of AIG also adding fuel to
CEO's taking and running..

Wrong.

AIG went into the dereivative market insuring bond holders who purchased junk bonds which were rated inappropriately.

Govermnet is not suppose to run businesses under the besiege that they will do a better job its government theft at the highest level...Most business people realize
they are under assault and just shut up and try and stay under the radar being ready to move on to greener pastures (and not always outside the USA)

You are extremely misinformed about the issue of AIG, rightrace.

In that respect you are hardly alone, of course.

 

[MalibuMan]

Hell. Obama is rewarding failure by even giving them bailout money in the first place.

 

[spymaster]

Why on earth are we paying for a $6.5 million bonus? Plus all the other people's bonuses we're paying for. How can Obama get up in the morning, look himself in the mirror, and think: "Well, yesterday, I did a good thing. I gave one person a $6.5 million bonus. He sure must be happy."? These people are doing NOTHING to deserve these. And these contracts can easily be broken by doing one thing: not bailing this company out. Then all the contracts can be renegotiated. Doesn't seem that hard to me.

 

[del]

Obama didn't screw it up......the greedy bastards at AIG did.

With all the anger over the Merrill bonuses and other excesses from financial firms receiving bailout money and with the government already owning 80% of AIG, not pressuring AIG beforehand about these bonuses has to be seen as an Obama screw up.

except he wasn't president at the time, and even if he had been, CONGRESS wrote the bail out bill and CONGRESS failed to make stipulations about how the money could be used.

 

[toomuchtime_]

Obama didn't screw it up......the greedy bastards at AIG did.

With all the anger over the Merrill bonuses and other excesses from financial firms receiving bailout money and with the government already owning 80% of AIG, not pressuring AIG beforehand about these bonuses has to be seen as an Obama screw up.

except he wasn't president at the time, and even if he had been, CONGRESS wrote the bail out bill and CONGRESS failed to make stipulations about how the money could be used.

The TARP bill gave broad discretionary powers to the government in determining how to use the money, and with the government already owning 80% of AIG, in a sense, Obama is AIG. Why did he choose not to pressure the board of directors, in a sense his board of directors, about the bonuses beforehand?

 

[Ravi]

AIG is a separate bailout than Tarp, no? After the current contracts run out with the employees they can and should be renegotiated. From what I read there is the possibility that the employer promised something it couldn't deliver without the bailout money...so that may be one way to legally take away the bonuses.

 

[Lycurgus]

Frank: AIG is 'rewarding incompetence'

NEW YORK - The indignation over millions of dollars in bonus payments for American International Group Inc. executives grew Monday when a top lawmaker said he believes it's time to shake up the company.

....

The money was payable to executives by Sunday and was part of a larger total payout reportedly valued at $450 million. The company has benefited from more than $170 billion in a federal rescue. AIG has argued that it was contractually obligated to pay the bonuses.


Frank: AIG is 'rewarding incompetence' - U.S. business- msnbc.com

AIG needs reprimanded, regulated and fined in my opinion.

However it is hilarious and sad at the same time to watch a bum like Frank reprimand them. A man who is more guilty than anyone else in causing the housing crisis.

The sooner Washington is cleaned of people like Frank, from both and all political parties, the better.

 

[Care4all]

AIG is a separate bailout than Tarp, no? After the current contracts run out with the employees they can and should be renegotiated. From what I read there is the possibility that the employer promised something it couldn't deliver without the bailout money...so that may be one way to legally take away the bonuses.

These bonuses are for the one area of their business that failed....

HOW DOES ONE earn a bonus from a department that LOST $80 BILLION plus last year?

I'm sorry, but this is just a bunch on BUNK from AIG....imo!

 

[DiamondDave]

AIG is a separate bailout than Tarp, no? After the current contracts run out with the employees they can and should be renegotiated. From what I read there is the possibility that the employer promised something it couldn't deliver without the bailout money...so that may be one way to legally take away the bonuses.

These bonuses are for the one area of their business that failed....

HOW DOES ONE earn a bonus from a department that LOST $80 BILLION plus last year?

I'm sorry, but this is just a bunch on BUNK from AIG....imo!

Because, if you worked in business, you would know that not all bonuses are tied to profit... some to effort, some towards the initial sale (even if that sale is foreclosed upon in the future)... and it is contractual

Now do I think businesses should learn a lesson and restructure how bonuses are given (based on long term sustainability and not just a short term punch bonus)? Yep.... Do I think the government should have looked into the structures of the bonus when they gave this money out to get a glimpse of reality? Yep...

Yet another reason why these stimuli/bailouts/whatever are just fucking bad iseas

 

[toomuchtime_]

AIG is a separate bailout than Tarp, no? After the current contracts run out with the employees they can and should be renegotiated. From what I read there is the possibility that the employer promised something it couldn't deliver without the bailout money...so that may be one way to legally take away the bonuses.

I believe there have been three or four bailout payments to AIG and all but the first were from the TARP money. Of course new contracts will be negotiated when the current ones run out, and if AIG refuses to pay the going rate for financial executives, no doubt they will have to find new ones. I'm sure there are some middle management people who wouldn't mind jumping up to top executive positions even with contracts that were far below industry standards. Who knows? Maybe they will do better than anyone has thought they would.

I doubt there are any legal ways to take the bonus money away.

Much of the money AIG received - $173 billion, I believe - went to pay off contractual obligations, mostly credit default swaps, that we can now all agree should never have been made. Who in the future would want to do business with a company that can be forced by the government to back out of contractual obligations because of negative public opinion? Would you buy an insurance policy from a company like that?

Continually attacking the competence and integrity of large financial institutions will do more harm to our economy in the long run that all the bonuses that have been paid or will be paid. Most economists think Geithner's public-private partnership plan to revive secondary credit markets is nonsense and most agree that it will take $1 trillion to $2 trillion in new government money to deal with the bad assets that are clogging the credit system, but because cowardly and cynical politicians keep stoking public anger at the financial firms there is almost no possibility Congress will come up with that money. Bernanke claims that the recession will not end until we clear up this problem, so are these cheap shots at the financial firms helping or hurting the economy and the American people? When Obama and Frank and others rage at the financial firms, are they helping or hurting the American people?

 

[catzmeow]

Great quotes from late nigth television about this:

TOP TALKER -- Stephen Colbert lunged at the camera with a pitchfork during an AIG rant on “The Colbert Report.” He started by playing a clip of Larry Summers saying on “This Week”: “We are a country of law. There are contracts. The government CANNOT just ABROGATE contracts.”

“‘ABROGATE!’ Well-played, Summers!” Colbert scolded. “Use a word nobody knows at a time when no one can afford a dictionary. Well, the government can’t stop ’em, but we CAN, folks! Nation: Our founding father knew that when the right of the people get trampled, we must become a torch- and pitchfork-wielding mob, empty of all thought … lashing out blindly at shapes and colors. LET’S GO GET AIG!”

Jon Stewart on “The Daily Show”: “It’s been building for months – simmering. But our proletarian rage feels so UNFOCUSED. If only someone would step up and put on the ‘Kick me’ sign.” Then he played clips (Chris Wallace and CNN) about bonuses to the reckless folks in financial-products unit: “That is SOME [cajones], AIG.”'

Jay Leno: “They bankrupt the company, took 170 billion of OUR dollars and they’re giving out bonuses. You know the main thing they want to reward their people for? Convincing the Treasury Department to give 170 billion dollars to a failing company, so they can give out bonuses for a job well done. You know what ‘AIG’ stands for – anybody know? Adventures in Greed. [Cheers, applause] … They don’t have to account for any of us. Now it turns out they gave 35 billion – not million, 35 billion – of our money to bail out European banks. See, this is how a global economy works. Our hard-earned tax dollars are used to bail out German banks for making bad investments in American companies that shut down cuz the Japanese owners moved the whole thing to Indian, China and Mexico. … Boy, you thought St. Patrick drove the snakes out of Ireland. Let’s send him down to Wall Street.” [Laughter, applause]

N.Y. TIMES QUOTATION OF THE DAY – President Obama: “How do they justify this outrage to the taxpayers who are keeping the company afloat?"

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