Hypocritical grandstanding.

This is such a tiny, microscopic part of what is wrong with the economy. Of course, it does not help that buried in the bailout was this clause that no one "knew about" until CNN dug up who put it in, and then suddenly Dodd knows about it again.
This is distracting us from the real problems. Can we please move on already?

I'd say it is important. Obviously rewarding people that perform poorly will not help our economy, so they should figure out how to prevent the "good old boy" network for rewarding themselves for bonuses for driving a country to its knees. So they should figure out a way to have fair compensation for these individuals without letting said people get their hands into the cookie jar. No more golden parachutes, performance bonuses for performing poorly, retention bonuses for people that should be fired.

What happened to all the oversight and transparency...and change?

Thanks for pulling the wool over America's eyes, Obama.

I think the pitchforks and torches should be reserved for the members of Congress (both parties) who voted for bailouts without strict oversight. Actually some limits were REMOVED during discussion in committee, before voting on the floor:
[www.politicalforum.com]

To own 80% of a company and have no seats on the board and no ability to control the company's destiny is laughable.

Rather than the media circus to disclose the names of who will receive the bonuses, let's disclose who was involved in removing the language that would have blocked these bonuses.

It's extremely important, but not in a direct way. This slip-up will cost Obama the credibility he would need to push the stimulus any further. With crap like this, it's going to be hard to push through anything new. Which is a good thing, since this pork barrel spend-a-thon is only stimulating palm greasing.

this is symbolically imperative if not literally imperative. those that plead for the country to "move on" and "think of more important things" i suppose are of the opinion that we only have the ability to do one thing at a time. dont worry, oh easily distractable adhd folks, we can manage to do both.

Heres an effective way to remove the "good old boys" network. Institute term limits on congress.

@Yossarian: It's what politicians do best. Hypocritical Grandstanding knows no party line.

In terms of the real economic effect, the bonuses are so insignificant that the amount of time congress and politicians are spending getting pretend "outraged" on them is ridiculous. I really don't care about bailout money going to "bonuses," because these are commissioned employees, and the amount of money that will go to a bonus is so paultry compared to the amount of money going anywhere else either in the bailouts, stimulus, or anywhere in the budget.

It might be insignificant, but we are already bailing out failing companies, I do not want their executives to profit from this. It is important to me, because at some level I want to know that these people get what they deserve (i.e. losing bonuses) and there is some justice...

@Saboth: "Obviously rewarding people that perform poorly will not help our economy"

That theory, though, is also the underpinning of every government assistance program ever created.

Liddy explained it very well yesterday. He was thinking like a businessman and decided the thing that was less risky and less costly over the long run was to pay the bonuses to keep the people there long enough to liquidate their books. Legally it was iffy to deny payment and practically it would have disastrous if the bonus-getters walked out in protest over money they were promised and not given.

The histrionics over this are over the top and it bugs me that it was only after a major public outcry did anyone at the top give a shit. I find the huge bonuses obscene but when he says 165 million vs 1.6 trillion, it makes sense to pay and suck it up as cost of getting out of the mess they are in.

Reacting to this emotionally is not going to help.

As an independent, I don't like this. While no politician is ever going to be really great, Obama at least seemed rational and, well, kinof grown up. I'm disappointed that this whole snafu over so little money is going to cost him political capital. "Holier than thou" is dangerous territory for any politician. After caving on telcom immunity, inability to appoint people who pay their taxes, and now this, I'm veering from 'cautiously optimistic' toward 'bitterly resigned.'

To the people bashing Obama...I don't think it is quite fair to expect one man to read packages that hundreds of congressmen have worked on for hundreds if not thousands of manpower hours, and expect him to recognize every nuance and facet of every sentence. Especially when he has been in office only a few weeks at the time all of these bills were being tossed around. There is plenty of time at the zero hour for greasy congressmen to slip in bits of language.

While these specific bonuses are essentially irrelevant to the economy, they are indicative of the mentality that has caused and will continue to cause fraud and / or corporate policy that emphasizes short term gains over long term profitability or even viability. While I believe that this is a sideshow, it is somewhat important to try to establish these practices as unacceptable. Whether these proceedings will be enough to get the message to sink in with other executives is doubtful.

They tried to get in front of an issue from a PR perspective. It's a common political tactic, and the public's anger is mostly focused on AIG at this point. Given the response of the media and I'd say their strategy of grandstanding was effective in shifting blame to "those evil executives and traders" before the truth could out. The only way out of this, from the banks' perspective, is to get the hell out of this TARP nonsense and become independently-functioning entities again. Any involvement with Washington just results in blame-shifting, uncertainty, arbitrary decisions, and recrimination.

It's a good scared-straight moment, I guess, when it comes to liquidity strategies - banks will finally be motivated to stay over capital requirements to ensure they never have to go through this again. The long-term effect on lending though, that's the rub; I think rates will be vastly, vastly higher going forward. Washington is adding a serious risk premium to future lending with all of this. I'm afraid the result will be sustained unemployment in concert with drastically higher interest rates for consumers, the overall effect being much lower consumption. Maybe that's a good thing, especially given this website's audience and attitude toward debt, but there's a certain class of Americans who will watch their lifestyle disappearc completely.

If I may dust off my comments from the previous thread:

[consumerist.com]

"If they [Congresspeople who voted for the bailout] didn't know [about the bonus situation], they were incompetent. If they did, they were complicit in the bonus being given out. Period."

My question is, what company gives out a bonus when the employees are not only screwing up, but running your company into the ground! What kind of leader or CEO does that? It's bizarre! But an even better question would be....are they hiring! Because I neez me one of them jobz.

@SkokieGuy: Everyone's too busy saying "Not me".

Obama and the congress were in such a hurry to pass the stimulus bill that they didn't even read it. That is unacceptable

@tc4b: It's always going to be a choice between a douche and a turd sandwich until people really do accept that there are independent parties and that voting for one of them isn't throwing your vote away if there's enough voting with you.

@David Eckert: Obama needs to earn that credibility. His political career has just been campaigning. He still hasn't done anything substantive other than being the first black president.

@VA_White: Agreed. I think congress, etc were likely thinking the same way as Liddy. They figured it would be more expensive to withhold the bonuses rather than just give them as a cost of fixing the mess. As you said, they were thinking as businessmen.

Unfortunately, the general public doesn't think like businessmen. In issues like this, we react emotionally, and that's a big problem. The taxpayers basically own AIG, you cannot manage a business based on emotion. If you wanna get the money back we put into the company, some things will have to be done that seem/are unfair.

Rather than griping on how unfair it is, we should be asking whether or not it was the best course of action. Was it? Would giving the bonuses have cost more money than not giving them? I don't know - I don't have the information to make that judgment.

Actually from the looks of it, it worked out REALLY well. The bonuses were given, so the employees who needed to be retained were/are retained. Now it looks like we're getting the bonus money back one way or another. So we basically had the necessary retention at no real cost.

I do not think this is insignificant. Sure its just a bit over 100 million. But A hundred million here, and a hundred million there, soon you are talking about real money.......

@dwhuntley:

At this point, you cannot quantify their job performance by the bottom-line performance of the transactions they engage in. It's counterintuitive, and I understand that this makes no sense to a layman, which is condescending to say. But those are the facts.

@dwhuntley: ... a company that's contractually obligated and specifically legally free to via exemption?

@Saboth: It's his job.

i think we should just take all the money back from aig and let them go bankrupt. and then we can move on.

@Saboth: this is his baby. He pushed it thru and said it would help save the economy. You need to get your facts straight before you post.

Humans are a very simple minded species. We like to have black/white good/evil terms spoon fed to us. In this case the AIG members on the list are an identifiable enemy, they are the cause, they are the reason your 401k is tanked. While none of that is entirely true, it's much easier to point at "that guy" and say he did it than to truly blame ourselves and our government.

@Saboth:

Would you have granted, for example, George W. Bush (or any Republican, for that matter) this degree of forbearance? I understand he had many mistakes, and after a while it was all incompetence. But think about it.

@Canino: exactly. That's why Obama's gotta be held accountable.

This administration is supposed to be about transparency. Transparency means saying what you know as soon as you know it. The parties responsible, all of them, need to be made aware that this is not like the last guy who apparently let anything slide. This time around, you WILL be held accountable and not in a slap-the-wrist way but in a "hey buddy, this is a recession, there are 500 guys and girls right now ready to do your job better than you" way.

I like buttons.

As for the serious part, I feel like getting to the bottom of this is important, but that the 'media circus' is almost obscuring the real issue here.

@basilray:

Obama didn't vote for the AIG bailout, also he didn't vote vote it. He voted "present". You would think with all these speaches he gives about it he would have been against it and vote no. When will people start waking up and finding out what his agenda really is (which is the same agenda as the big banksters-one world bank-one world federal government).

reply to my above comment(replies aren't working for me): **Obama didn't vote for the AIG bailout, also he didn't vote for it.

Everyone understands that it's inconsequential to the grand scheme of things, monetarily speaking, but it's a great opportunity to stir up populist resentment, and of course our populist leadership wants to take advantage of that.

@Saboth: If you want to take credit for it, you also have to take flak for it when/if it goes bad. I mean, if you want to go on Jay Leno to talk economics, then shouldn't plans you back be solid?

Figuring out what happened is not really important to helping us get the economy back on track.

However, it will be very important in about three years, when we're deciding whether or not the people who let it happen are the kind of people who should be running our country.

@SkokieGuy: The fed threw 80 billion at AIG in September without anyone else's involvement. Once that happened, everyone else's hands were tied. It's a little hard to withhold 30 billion dollars from a company over bonuses and end up losing 80 billion(I think 150 billion after the tarp money) when you drive the company into bankruptcy.

The current administration and the current congress didn't cause any of this. The CEO of AIG did not cause any of this. The Fed caused all of it in September under the Bush administration. They did what they did because they wanted this money to keep business as usual. They did not look at the political ramifications. Now the Obama administration has to either throw in the towel on AIG or continue the mess Bush and Bernacke started. Throwing in the towel isn't really an option.

In the end restricting contractually guaranteed bonuses in exchange for accepting funds without providing any legal protection from lawsuits would have been an idiotic idea. If congress can tax them back, then that is what they should do. But whatever they do needs to be legal. Because the million+ dollar recipients who left AIG are pretty much guaranteed to sue and could win.

@David Eckert: I am not sure it loses him credibility by preventing lawsuits against AIG in a situation created by the last administration. Everyone needs to calm down and realize the fed screwed up big time when they gave AIG 80 billion with no strings attached back in September. Adding strings after the fact doesn't work.

The real scandal here is that Congress voted for a bill spending 787 billion dollars and the President signed it without knowing what was in it (or so they claim). And then they have the audacity to be outraged by the provisions they voted for. This bill was so rushed that they had to fly a Senator in after a funeral to get the vote done before the American people could decipher any of what was in it. The President then took four days of vacation time before signing it. Perhaps he was watching college basketball, but he evidently either did not bother reading it or is lying. I assume it is a combination of both. There were articles in February talking about how the President was unhappy with the executive compensation provisions inserted by Senator Dodd at the last minute.

@moore850

Your error came in when you assumed this administration would be any different than any other administration in recent history.

Meet the new boss. Same as the old boss. I guess we did get fooled again.

@Ninja007:

Actually, isn't this Bush's, Paulson's, and Bernanke's baby? They were the one's who proposed this way back in October (or thereabouts...it seems so long ago) before Obama was even elected in November. At most, he had one vote in the Senate at the time so I think it's fair to say the people I mentioned had far more influence than Obama. If I'm wrong, let me know, but that's what I recall.

While it is really just a sideshow i think the point that comes across is that they're at least TRYING to make people accountable for their actions. Even if they're miserably failing when it comes to that.

@Citizen Kang: yes you are wrong. Obama went on national television to push this thru. All Republicans voted against this bill. Dodd was the one who put the loophole in allowing the bonuses. This is not Bush' fault. Get your facts straight.

This is just more political kabuki theatre done to distract the attention away from the Fannie bonuses, since they were major campaign contributors to the current regime.