Bailed out by (us) taxpayers, AIG gives millions in bonus. (The qoutation marks are mine.)I read an item by the Associated Press that American International Group (AIG) is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion. A white paper prepared by the company says that AIG is “contractually obligated” to pay a total of about $165 million of previously awarded “retention pay” to employees in this unit by today Sunday, March 15. The document says that another $55 million in retention pay has already been distributed to about 400 AIG Financial Products employees. I had to read it twice to insure I could let the nuance of that sink in.
Secretary of the Treasury Timothy Geithner termed the current bonus structure unacceptable in view of the billions of dollars of taxpayer support the company is receiving. However, the Treasury Department determined that the government did not have the “legal authority” to block the current payments by the company. Another distraught hand wringing, "woe is us" response from the government.
AIG and administration sources said Saturday that after going over the insurer’s legal obligations, that the employees might win “punitive damages” if their contracts were broken. An even bigger problem, they added, was that financial products employees who are denied payments “could quit” and that AIG’s losses—the insurer took the deepest bath in red ink in American history last quarter, losing $61.7 billion—could spiral enormously if the only people who understand the company’s convoluted dealings are not around to “unwind” the damage that they caused. Breaking those contracts would have led to greater costs for taxpayers, the official said.
So, let me get this straight. We are using the arsonists who started the conflagaration we are currently in to try to stop the blaze? And rather then putting them all under indictment, we want to give them a bonus not to quit? Is that what the leaders of the American economic system are saying?
I think the correct response that Secretary Geithner should give AIG and those employees, was succinctly put by the noted social commentator, John Stewart, last week.
It seems more and more that the people who ran this scheme for the last 10 years learned their economics not on Wall Street, but on the Mean Streets. Here is a two minute morality play on how we got into this mess. The role of AIG and the other bailed out entities will be played by Johnny Boy. The role of the US Public is played by Mikey. I think you will find it illuminating.
This is sick. Why in the world are we helping these companies that keep sending millions to people who do not know how to run a company? They cry yet get paid millions on the "average joes" taxes. Furthermore, I fear this is just the tip of the iceberg. Look what Enterprise rent-a-car did to get bailout funds:
ReplyDeletehttp://www.butasforme.com/2009/02/25/alert-enterprise-rent-a-car-may-have-fired-employees-as-fake-evidence-when-lobbing-for-bailout-money/
The bonus payout excesses at AIG are just the tip of the iceberg of what is happening with the other Wall Street bailouts including Bank of America. Working productive Americans are bailing out the same crooks that destroyed our economy along with 45% of the wealth in the world and now the American taxpayers and our children will be forced to live a far lower standard of living with reduced prosperity and opportunities due to this but only we pay the price.
ReplyDeleteWashington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. Find out what a growing repudiate the debt movement could mean for treasuries, the dollar, gold and the stock market and how this is a better alternative than Washington’s plans to monetize the debt in future years and tax and destroy our remaining wealth by depreciating the dollar.
The Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is starting now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts