Quote :

"Frank assails bonuses paid to executives at AIG WASHINGTON (AP) -- Rep. Barney Frank charged Monday that a decision by financially strapped insurance giant AIG to pay millions in executive bonuses amounts to "rewarding incompetence. "These people may have a right to their bonuses. They don't have a right to their jobs forever," said Frank, AIG has agreed to Obama administration requests to restrain future payments. Treasury Secretary Timothy Geithner pressed the president's case with AIG's chairman, Edward Liddy, last week. "He stepped in and berated them, got them to reduce the bonuses following every legal means he has to do this," said Austan Goolsbee, staff director of President Barack Obama's Economic Recovery Advisory Board. In a letter to Geithner dated Saturday, Liddy said outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so."

As much as it makes me mad that seemingly the executives of the very divisions that screwed things up at AIG are getting contractual bonus', my anger is more aimed at those that allowed this to happen and their hypocrisy.

Where was the media/gov't outrage when Fannie Mae and Freedie Mac executives left with millions in bonus money that was 'earned' by cooking the books? Frank says "these bonuses are going to people who screwed this thing up enormously." Well where's the effort to get bonus back from Franklin Raines and Jamie Gorelick?


Where is the outrage for Barney Franks, Chris Dodd, et al who let Fannie & Freddie get into the mess they're in? Why aren't we firing them?

Barney admits he can't prevent the bonus from being paid, but they'll make sure it doesn't happen next time. This reminds me of Obama who campaigned on no-pork, and then signs a huge pork-filled budget as he promises this will be the last one.

It's laughable to see a bunch of wasteful, incompetent, self-serving politicians berating a bunch of wasteful, incompetent self-serving AIG executives.


http://finance.yahoo.com/news/Frank-assails-bonuses-paid-to-apf-14646988.html

3/16/2009 11:22:04 AM

Quote :

"Where was the media/gov't outrage when Fannie Mae and Freedie Mac executives left with millions in bonus money that was 'earned' by cooking the books?"

You mean, these bonuses

http://www.washingtonpost.com/wp-dyn/content/article/2007/02/20/AR2007022001666.html

Quote :

"By David S. Hilzenrath Washington Post Staff Writer Wednesday, February 21, 2007; Page D01 Fannie Mae's board has decided not to give out executive bonuses potentially worth $44.4 million for some of the years when the federally chartered housing finance company's earnings were misstated."

Quote :

"Where is the outrage for Barney Franks, Chris Dodd, et al who let Fannie & Freddie get into the mess they're in? Why aren't we firing them? "

We've already had this discussion eleventy times here.

[Edited on March 16, 2009 at 11:30 AM. Reason : .]

3/16/2009 11:26:56 AM

so.... is your deal that whenever some shit goes down at a private company, your first and only response is to find a government backed/funded organization or company where something went down at some point in the past, and rail against it instead?

3/16/2009 11:29:30 AM

Quote :

"Fannie Mae is the biggest single source of money for mortgages in the United States. From 1998 to 2004, the years covered by the OFHEO investigation, it was headed by former Clinton budget director Franklin Raines, whose top management team included former Clinton Justice Department official Jamie Gorelick, sometimes mentioned as a future attorney general in a Democratic administration. During that period, the report says, Raines and his team grossly overstated Fannie Mae’s earnings — to the tune of $10.6 billion — for the purpose of paying themselves big bonuses. “By deliberately and intentionally manipulating accounting to hit earnings targets,” the report says, “senior management maximized the bonuses and other executive compensation they received, at the expense of shareholders.” "

http://article.nationalreview.com/?q=NDA4YTY1N2ZhMDhmNjIwNTk4OTI2MDYxZWU4NDg1Y2Q=&w=MA==

OK..let's not try to deny the wrong-doing at Freddie and Fannie.

Quote :

"so.... is your deal that whenever some shit goes down at a private company, your first and only response is to find a government backed/funded organization ...and rail against it instead? "

I could care less about AIG. They should've let it tank, just like with any failing business. But now the gov't has handed over billions of taxpayer money to it..basically without few strings, or much oversight.

Granted AIG is a mess, and it's demise would hurt a lot of people... but it is not the taxpayer's responsiblity to keep these shipwreck companies afloat.

3/16/2009 11:43:15 AM

Larry Summers says that the United States government is powerless to stop the unreasonable AIG executive compensation. He should know better. Mr. Summers: Yes you can.

Treasury Secretary Tim Geithner should direct the Commissioner of Internal Revenue to challenge the AIG bonuses as unreasonable compensation under the Internal Revenue Code. Finding the AIG bonuses to be unreasonable compensation would render them nondeductible for federal tax purposes, and would strengthen potential shareholder derivative suits to recapture The Great AIG Giveaway.

~Aaron Zelinsky in the Huffington Post
http://www.huffingtonpost.com/aaron-zelinsky/larry-summers-stop-the-ai_b_175151.html

What I find outrageous about this is the fact that bonuses are tax deductable in the first place. This probably explains why bonuses are required by the employment contracts: it is merely salary by another name.

[Edited on March 16, 2009 at 12:34 PM. Reason : .,.]

3/16/2009 12:32:44 PM

Quote :

"Why aren't we firing them? "

they're called elections

you want to have a discussion about that, you go right ahead
but don't make some blanket statement like that as if we have no recourse for removing bad politicians

3/16/2009 12:36:52 PM

I found this quote persuasive:

Quote :

"I wish the bonuses would stop, too. I don't believe in rewarding people who destroyed their company. Note to the President: when you stop sending them money, the bonuses will stop."

3/16/2009 2:16:21 PM

I bet sans government money they'd still have gotten the bonuses.

But, point taken.

3/16/2009 2:18:00 PM

No, the bonuses were just paid, but the bankruptcy would have come a few months ago. As such, while the executives could have demanded their bonuses, they would have had to stand in a long line of creditors in order to get them.

But I see you got the point.

3/16/2009 2:51:40 PM

I don't understand why people are outraged about this, and not about the other 99.99% of wasteful spending that goes on. Do people think government isn't wasting their money right now? Suddenly, when government gives money to a private corporation, and that corporation doesn't spend it in a way that people find responsible, it's grounds to get upset? It's almost as if people don't know where the money is coming from.

3/16/2009 3:46:28 PM

If the Disneyland in the title refers to what I think it does, it just made my fucking day.

3/16/2009 4:04:15 PM

^ Do you mean dizz knee land?

3/16/2009 4:48:50 PM

I was against these crazy bailouts from the get-go. I was against Bush and TARP I and I'm against Obama and his bailouts/handouts.

Quote :

"Obama blistered insurance giant AIG for "recklessness and greed"... "How do they justify this outrage to the taxpayers who are keeping the company afloat?"... "This is a corporation that finds itself in financial distress due to recklessness and greed," "

Recklessness and greed that was actively encouraged by the gov't through Freddie Mac and Fannie Mae.
Pres. Obama is a little selective with his outrage. The gov't was responsible for monitoring and managing Freddie and Fannie ..and dropped the ball completely. Obama didn't come out and berate Frankling Raines or Jamie Gorelick...oh that's right...they were Clinton people.

3/16/2009 11:01:27 PM

oh good, more complaining about Fannie/Freddie. I was scared you were going to contribute something relevant to the AIG issue

3/16/2009 11:09:57 PM

Quote :

"It's laughable to see a bunch of wasteful, incompetent, self-serving politicians berating a bunch of wasteful, incompetent self-serving AIG executives. "

3/16/2009 11:11:17 PM

well someone is gonna lose

3/16/2009 11:28:05 PM

From what I've been able to gather, a lot of these bonuses were "retention" bonuses, meaning that these employees were working at AIG with the expectation of being paid that bonus sometime in the future. If that is the case, what right does the government have to come in and toss out a contractual agreement? Now, had AIG gone bankrupt, that would be a different story entirely, but they didn't go bankrupt. We "bailed out" AIG, presumably because we wanted them to continue to exist. How does it make sense to then scold AIG for paying wages to employees that it promised beforehand?

I think there's this idea of CEOs living it up, giving themselves billion dollar bonuses on the taxpayer's dollar. That's what people seem to think of every time they hear "bonus." I don't think that's really the case, most of the time. AIG has been sinking for a while, and it's not as if the regular employees (read: not big-time executives) didn't know this. Retention bonuses would have been the only way to keep employees working at AIG. If we want AIG to keep doing what it does, then it needs to have employees. If we don't want AIG to keep doing what it does, then we shouldn't have bailed them out.

This kind of shit is why bail outs just don't make sense in the long-term.

[Edited on March 17, 2009 at 2:03 PM. Reason : ]

3/17/2009 2:02:07 PM

AIG contracts - all good!

Union contracts - boo!

3/17/2009 4:22:47 PM

AIG paying retarded ammounts of money to shitty employees is the same as GM paying retarded ammounts of money to shitty employees. In both cases its not the governements job to change the contracts, its up to the company. And if the company fails to fix the problem and as a result goes down the shittier it is not the governments job to prop them up.

3/17/2009 4:49:33 PM

the government did prop them up because if they didnt we would all be in bread lines.

so the gubment had control now

3/17/2009 4:58:52 PM

A contract is a contract is a contract but only between Ferengi

3/17/2009 5:16:51 PM

http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig---time/

Quote :

"While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. The provision, now called “the Dodd Amendment” by the Obama Administration, provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax."

3/17/2009 6:18:48 PM

The gov't knew these clauses were in there, or should have, since the contracts with the bonuses were signed last spring. They should have hashed this out long ago or better yet let the failing businesses go bankrupt.

3/17/2009 8:28:53 PM

Quote :

" WASHINGTON – Senior administration official sources say President Barack Obama learned only last Thursday that insurance giant AIG was paying employees millions of dollars in bonuses. "

So none of the people in Obama administration took a closer look at the bonus pay contracts before we handed them all that money?

Is bumbling part of the Hope or the Change?

3/17/2009 10:32:37 PM

and if they had..... what?

they would have demanded "no bonuses from bailout money"?
Then what - there would have been screams and cries about "FUCKING GOVERNMENT MICROMANAGING OUR BANKS!"

Anyway, is the AIG money still not coming out of the original TARP allocation? As you recall, the previous administration and the Congress basically threw money at the banks, no strings attached.

3/17/2009 10:41:57 PM

^
You know, I think you're right...I think it came out of Bush's TARP plan. That would give Obama a pass on knowing up front.

As much as I don't approve of congress passing special tax laws designed to punish specific individuals....AIG screwed themselves by taking the bailout bucks. They haven't a leg to stand on.

I just hope they don't use this to spread the Pay-Limits thing over to non-bailed out businesses.

3/17/2009 10:46:55 PM

Quote :

"I think it came out of Bush's TARP plan"

3/17/2009 11:07:53 PM

Is AIG retarded?

3/17/2009 11:47:17 PM

Quote :

"I just hope they don't use this to spread the Pay-Limits thing over to non-bailed out businesses"

how (and why) would this happen?

3/18/2009 12:02:56 AM

^

Quote :

"Barney Frank: TARP's comp curbs could be extended to all businesses Congress will consider legislation to extend some of the curbs on executive pay that now apply only to those banks receiving federal assistance, House Financial Services Committee Chairman Barney Frank said. “There’s deeply rooted anger on the part of the average American,” the Massachusetts Democrat said at a Washington news conference today. He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies. "

That's why I'm scared. Government tends to limit individual freedom rather than expand it.

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090203/REG/902039977/1003/TOC&template=printart

3/18/2009 12:24:22 AM

Earthdogg you're actually arguing for stringent government oversight in nationalization cases in your last few posts.

I think we need to leave this at an early point made:

No Government money paid to AIG = no bonus to the execs that destroyed it.

Why is AIG even an entity right now? It should have been gutted the minute it became owned by US.corp

3/18/2009 12:42:48 AM

looks like obama got over 100k from AIG, will that be taxed at 100%?

Does anyone else see the irony behind the "outrage" of these bonuses? AIG pays out money to its workers for work done. However, there is NO outrage for handing over boatloads more over decades to people spend the money they neither earned or worked for, yet continue to try to increase the amount of taxpayer money they receive.

Now Im against both, but its hard to not see them talking about of both ends.

3/18/2009 9:48:29 AM

Quote :

"However, there is NO outrage for handing over boatloads more over decades to people spend the money they neither earned or worked for, yet continue to try to increase the amount of taxpayer money they receive."

When we start employing those people in our private companies, and they negligently destroy whatever it was we were trying to accomplish, I'll get outraged at the tax dollars that went to them. As it is, I'm fine with paying them pennies to placate their laziness if it means they don't come across the street to rob my property and rape my loved ones.

3/18/2009 10:23:27 AM

yet those things continue to happen.. strange huh.

3/18/2009 1:16:28 PM

we pay cops with tax payers money and they do illegal shit all the time.

is that what you're talking about eyedrb?

3/18/2009 2:19:28 PM

^^ Of course those things happen. It could be a shit ton worse you obtuse goof.

3/18/2009 2:26:53 PM

Quote :

"When we start employing those people in our private companies, and they negligently destroy whatever it was we were trying to accomplish, I'll get outraged at the tax dollars that went to them. As it is, I'm fine with paying them pennies to placate their laziness if it means they don't come across the street to rob my property and rape my loved ones."

Is that why we give these people money, though? That's certainly not the stated intention of any politicians I've heard. The idea is that we should help those that can't help themselves.

In any case, this seems more and more like manufactured outrage. Of course politicians are shifting attention to a few measly bonuses. The more the public is focusing on corporations, the less they're focusing on the systematic failure of government. People need to wake up. Stop feigning outrage at the evil corporations, and start getting mad at irresponsible politicians.

[Edited on March 18, 2009 at 3:00 PM. Reason : ]

3/18/2009 2:57:05 PM

Quote :

"Is that why we give these people money, though? That's certainly not the stated intention of any politicians I've heard. The idea is that we should help those that can't help themselves."

Do you really expect any politician to make a statement like that?

Quote :

"In any case, this seems more and more like manufactured outrage. Of course politicians are shifting attention to a few measly bonuses. The more the public is focusing on corporations, the less they're focusing on the systematic failure of government."

Tin hat locked and loaded!

Quote :

"People need to wake up. Stop feigning outrage at the evil corporations, and start getting mad at irresponsible politicians."

No, I'd say their outrage is very real. On the one hand we have guys that ran the financial system in the shitter getting retention bonuses AFTER they have left a company, and on the other hand you have guys like me that are owed 15 grand and the Chapter 11 proceedings only lets me claim up to 10 grand of that before I have to get in line with all the other unsecureds.

3/18/2009 3:20:58 PM

Quote :

"Article 1 Section 9 No Bill of Attainder or ex post facto Law shall be passed. Article 1 Section 10 No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

3/18/2009 3:22:27 PM

Quote :

"Where is the outrage for Barney Franks, Chris Dodd, et al who let Fannie & Freddie get into the mess they're in? Why aren't we firing them?"

3/18/2009 3:25:00 PM

^^ So which popular right wing blog posted about that today?

3/18/2009 3:34:34 PM

Quote :

"As it is, I'm fine with paying them pennies to placate their laziness if it means they don't come across the street to rob my property and rape my loved ones. "

this is the only reason I even marginally tolerate the abuses and reliance of so many people on our social welfare system (welfare checks, foodstamps, medicaid).

3/18/2009 3:40:18 PM

Quote :

"^^ So which popular right wing blog posted about that today?"

Boortz.

(its the Constitution if you didnt know)

As I understand it, the employees who received the bonuses were employed in Connecticut. Under Connecticut law, if an employee is denied contractual compensation, sues and wins in court, the parent company has to pay DOUBLE the disputed amount, plus lawyer fees.

AIG could pay the $165 million $texas now, or $330 million (+ fees) later, because they would lose the case, as the bonuses are clearly a contractual obligation.

seems like a no-brainer to me.

3/18/2009 4:15:33 PM

Fannie and Freddie are due to pay out retention bonuses too. LOL


Failboat, you filed chapter 11? What was your 15K owed on? Credit cards?

3/18/2009 4:20:17 PM

I think he meant someone who owed him money filed chapter 11.

3/18/2009 4:22:50 PM

Quote :

"Do you really expect any politician to make a statement like that? "

No, not really. Politicians are primarily interested in being re-elected, are they not? They will say or do pretty much anything to stay in power.

Quote :

"Tin hat locked and loaded!"

Yeah, I guess you're right. Politicians would never try to distract the public in order to save their own asses. I mean, they really are good and honest people for the most part, with no vested interest in shifting as much of the blame away from themselves as possible.

Quote :

"No, I'd say their outrage is very real. On the one hand we have guys that ran the financial system in the shitter getting retention bonuses AFTER they have left a company, and on the other hand you have guys like me that are owed 15 grand and the Chapter 11 proceedings only lets me claim up to 10 grand of that before I have to get in line with all the other unsecureds."

How do the AIG bonuses affect the average person, in any way? You may be in a special circumstance, but for 99.9% of people, they gain/lose absolutely nothing. If the issue is that someone is getting taxpayer money and doesn't deserve it or is spending it unwisely, then obviously people should be getting mad about a lot more than AIG bonuses.

As for the general claim that these are the "guys that ran the financial system in the shitter." Obviously, AIG isn't the only culprit, and even if they were, it's irrelevant. There are people working there...for money. They're not working because they want to save America. Some of them continued to work there only because of bonuses that they'd get for staying. And if the argument is that "they" fucked up, therefore shouldn't get paid...why did we bail them out?

Now, if retention bonuses were promised and given after employees left, then that's another story entirely. That hasn't been my understanding, though. I know that at least some AIG employees received bonuses and have since left, but that's not the same.

3/18/2009 4:42:27 PM

ya, I think you are right dabird, i reread it.

On a side failboat, how did you get in 15k on someone?

http://online.wsj.com/article/SB123739512036672809.html

Link for the fannie bonus

[Edited on March 18, 2009 at 4:49 PM. Reason : .]

3/18/2009 4:45:12 PM

Well, the 15k number is PTO plus severance. However, I don't really feel a company should be required to give severance when they go to Chapter 11 (and this is generally what the law states).

However, the dumbasses running the show offered me a position at a different location that terminated 3 days after my original end date which initially included severance. This also included a relocation package worth 5k+ and I did incur about 3k in costs related to this + an an incalculable (dollar-wise) amount of time spent on that endeavor.

Quote :

"Yeah, I guess you're right. Politicians would never try to distract the public in order to save their own asses. I mean, they really are good and honest people for the most part, with no vested interest in shifting as much of the blame away from themselves as possible."

So what other times in the recent past have politicians tried to distract the public to save their own asses?

Quote :

"How do the AIG bonuses affect the average person, in any way? "

Well, it lets us all know that our politicians aren't looking out for our interests. I'd say it effects EVERYONE.

Quote :

"If the issue is that someone is getting taxpayer money and doesn't deserve it or is spending it unwisely, then obviously people should be getting mad about a lot more than AIG bonuses."

You haven't demonstrated how people aren't mad about people getting tax money they don't deserve.

Quote :

"And if the argument is that "they" fucked up, therefore shouldn't get paid...why did we bail them out?"

Because literally no person in this country did know or could have known of the ramifications of an AIG bankruptcy. Most professional economists were envisioning a complete halting of the world finance system for some unknowable amount of time. No payrolls made, stock market crashes that would have made '87 look like the Scooby Doo ride at Carowinds. Congress isn't without blame though. They didn't read the bills, they didn't think about things like bonuses and stuff. I suppose maybe they forgot that man is generally evil and that they wouldn't voluntarily forego bonuses in situations like this.

Quote :

"Now, if retention bonuses were promised and given after employees left, then that's another story entirely. That hasn't been my understanding, though. I know that at least some AIG employees received bonuses and have since left, but that's not the same."

I either overhead or misread about this if I am wrong, and I definitely could be.

[Edited on March 18, 2009 at 5:45 PM. Reason : .]

3/18/2009 5:35:13 PM

sorry to hear that fail boat, it sounds like they dicked you over on the relocation. I hope it wasnt intentional.

3/18/2009 9:07:24 PM

They didn't do it on purpose. It's a company in Chap 11, I think it's safe to say if we were selling ineptitude instead of semiconductors, the story would have been drastically different.

3/18/2009 9:11:06 PM