There’s no shortage of outrage directed at AIG today as the fallout from the bailed-out insurer’s announcement that they intend to use $165 million in taxpayer money to pay bonuses to the very executives that ruined the company continues.
From ABC News:
“It’s ridiculous,” U.S. Rep. Elijah Cummings, D-Md., told “GMA,” adding that he doesn’t buy the notion that the government doesn’t have enough control over taxpayer dollars to stop bonuses like these.
Sadly, most everyone else seems to be in agreement that the government has no power to stop AIG from going ahead with the bonuses — despite the fact that we are now its single largest shareholder. Fed Chairman Ben Bernanke told CBS’ 60 Minutes that of all this meltdown nonsense it’s the AIG bailout that makes him the angriest — and ABC News says that the chairman was so livid after hearing about the bonuses that he slammed the phone down.
“Let me just first say that of all the events and all of the things we’ve done in the last 18 months, the single one that makes me the angriest, that gives me the most angst, is the intervention with AIG. Here was a company that made all kinds of unconscionable bets. Then, when those bets went wrong, we had a situation where the failure of that company would have brought down the financial system,” Bernanke said.
“You say it makes you angry?” Pelley asked.
“It makes me angry. I slammed the phone more than a few times on discussing AIG. I understand why the American people are angry. It’s absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets, that was operating out of the sight of regulators, but which we have no choice but the stabilize, or else risk enormous impact, not just in the financial system, but on the whole U.S. economy,” Bernanke explained.
Ben Bernanke’s Greatest Challenge [CBS]
From Outrage to the Future: Learning From the AIG Bonuses [ABCNews]
(Photo:ChristophrHiestr)
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Can we just get a list of all the executives that accept their bonus and publish it somewhere? Say, on the front page of every newspaper in the country?
Paraphrasing the Joker: THIS ECONOMY NEEDS AN ENEMA!
Ive said this a million times..
i dont really blame AIG at all.. this believe it or not, is a scheme by the government to keep this vicious cycle going
instead of getting pissed off at AIG.. everyone here should be blaming the government..
we told the govt to let all these companies fail.. they didnt listen .. they took our money .. and conducted business as usual.. and obama and the gov’t put on all this show for everyone to view saying bla bla bla im pissed off that you took tax payer money and gave it out as bonuses…the govt should be put to blame.. not for not putting restrictions on the loan but for giving it to them in the first place..
the govt forced some banks to take money .. now the govt can regulate what employees make.. no one cares about this point now.. but what happens when your company was FORCED to take a bail out by the govt and now they turn around and said no more bonuses for you either.. see a pattern here people ?
its their fault.. we never should have given them the money to begin with.. the economy hasnt gotten better.. in fact its gotten worse.. dont let the govt instill fear into you .. you lose choices when the govt takes something over..
everyone here needs to blame the govt for giving them the money .. not aig for taking and spending it..
@ARP: Damn you, no reply love for me.
Yeah I see your point; thousands of innocent people were inadvertently tied up into the AIG mess, and letting it all go would harm them.
There’s a certain part of me though that thinks maybe we need a collapse. Things will never change if there are no consequences for what boils down to bad business decisions. The laws of cause and effect, harsh though they may be, need to run their course.
Whatever though, I have no real deep-seated resentment to this bailout (I save that for my hatred of the drug war). I just find it a little creepy that it is suddenly the prerogative of the federal government to legislate executive pay.
AIG is obviously running without a “pay for performance” clause in their contractual bonus contracts.
It’s completely irresponsible to even allow things like this to occur. If the clause was in place there would have been (little to) no way to pay bonuses to worker in a failing business unit.
I say LET IT FAIL.
Bernanke is just posturing here so people don;t continue to hunt for his head as well.
100% fail.
Yet another example of why this bailout is a joke. Let em collapse…its called Darwinism…those that are fit will survive, those that are weak will die.
So let me see if I understand this. Contracts between regular employees, unions, airlines, air traffic controllers, none of them is worth the paper that they are written on but AIG contracts are somehow bulletproof? I call bullshit!
Wait a minute… AIG is saying that they ‘need’ to give out these bonuses so they don’t lose the top talent.
Where is the top talent going to go in this economy?
Just let em fail. Prop up all the other banks.
I’ve yet to see anything in this bailout fiasco that fixes this problem: If we’re discovering companies that are “too big to fail”, then we need to have a remedy in place that’ll ensure the next time this happens (and face it, there will be a next time) that there aren’t any companies that are so big they’ll bring down our entire economy if they go under.
The good news about all this is that the government will be hiring more IRS auditors to make sure small businesses and the middle class will be paying their fair share of income tax.
This is just another example of why contracting and contracts are such an important part of business. I am a contract manager. I would never make a contract with someone wherein their “bonus” was not dependent on their performance or revocable due to circumstances.
Evidently, AIG was so excited to get Wall Street Weenies on their payroll that they let these two key elements go, and are now saddled with some outrageous (and deeply embarrassing) contracts.
I don’t know what they should do with this situation. Voiding the contracts doesn’t seem like a good idea, just because it sets a scary precedence. Investigating the recipients seems like it would be a lot of work for little payoff.
This is very specifically one of the reasons it was so stupid and foolish to push the bailout so fanatically; I hope Congress learned it’s lesson.
How much further do they have to go before we get an old-fashioned pitch-fork mob at their head offices?
Makes me wonder – if these bonuses are to retain their “best and brightest,” the very ones who got them into the cesspool they’re in, just who ARE the real morons in their eyes?
A paraphrase of Barney Frank on the “Today” show this morning: The government owns 85% of AIG. Yes, these people may be entitled to their bonus. But I think they should have to choose between living off their bonuses or losing their jobs. I think we should just fire them.
You know what? He’s right. We own their asses. We should turf the greedy bastards out.
If I had a legal contract that said I was going to get a bonus, then AIG owes me the money. Now, if Obama and congress want to void my contract, I will see their butts in court. We can put the trial on Court TV because Obama can’t go a flipping day without getting his mug on TV to lecture the nation. Enough. Go away. Lay low for a few weeks, ok.