Details of AIG bonuses aren’t very soothing
Well, some of the details of the AIG bonuses have been released. They aren’t any prettier on closer inspection. In fact, they’re damn ugly.
From The Washington Post:
NEW YORK, March 17 — Seventy-three employees of troubled American International Group received more than $1 million in bonuses under contracts that guaranteed them 100 percent of their 2007 pay in 2008 regardless of performance, New York State Attorney General Andrew Cuomo said.
The revelation comes a day after Cuomo subpoenaed AIG for information regarding $165 million paid to executives and other workers in the company’s troubled financial products division, chiefly responsible for bringing the insurance giant to the brink of collapse last year. The firm has required $170 billion in government injections.
AIG declined to comment on Cuomo’s letter. But a person familiar with the situation said the company did not want to release the names because of privacy issues and also out of concern for the safety of the individuals. The company has been flooded with phone calls and death threats since news reports over the weekend about the bonuses.
The top bonus recipient got more than $6.4 million, Cuomo said. The top seven earners received payouts of more than $4 million each, while 22 people received bonuses of $2 million or more, Cuomo said.”
Public outrage and frustration over the AIG scandal is enormous, and for good reason: It epitomizes the larger economic scandal in so many ways.
The people who caused this mess continue to profit from it — 73 people getting a million bucks each, and 22 getting twice that amount — and apparently there’s not a damn thing to be done about it legally. They will get off pretty much scot-free. The same is true of the politicians of both parties who allowed themselves and the system to be slowly corrupted in service to Big Money, and who now profess to be shocked, shocked at the notion that gambling was taking place in the casino.
Meanwhile, the people who didn’t profit from it but in fact are losing jobs and homes and futures are being forced to do the responsible thing and pony up huge amounts of money to try to ease the impact of the catastrophe.
So yeah, anger is very very justified. Frustration is very very justified.
The problem is that legitimate anger, denied a legitimate target on which to vent itself, will choose illegitimate targets and be vented in illegitimate and destructive ways. Staying calm and rational when you really just want to grab those $&#*&*s by the &$*#(HIO-%^&%@# throat — it’s a little hard at the moment.
My mom had a saying that I never fully understood as a kid: “Don’t cut off your nose to spite your face.” I understand it a little better now. But damn.
You want to say OK, that’s it — no more billions for AIG or for Wall Street, and damn the consequences. But the people we’re really mad at — the ones elbow-deep in this mess — have for the most part already collected their fortunes and vamoosed. By trying to exact revenge on them by forcing the collapse of the financial system, we would only harm ourselves.
It’s like that biblical story of the blinded strongman Samson, who pulls down the Philistine temple, killing himself and 3,000 Philistine enemies with him.
Except in this case, the Philistines have already left the temple, waving their million-dollar bonuses as they go.
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179 comments Add your comment
The Professor
March 17th, 2009
6:02 pm
Where do we go from here?
PJ
March 17th, 2009
6:06 pm
The Treasury needs to tax every penny of that money so that the United States government gets it back for tarp money paid.
CommunistAJC
March 17th, 2009
6:16 pm
Maybe this is a lesson for the government. Don’t give out taxpayer money to failing companies or banks.
CommunistAJC
March 17th, 2009
6:16 pm
PJ,
the government will find another way to waste our money.
@@
March 17th, 2009
6:17 pm
The problem is that legitimate anger, denied a legitimate target on which to vent itself, will choose illegitimate targets and be vented in illegitimate and destructive ways.
I am in no way sympathetic to the greed of a few Wall Street moguls, but for Obama to blanket ALL corporations as corrupt was bound to bring revolution. Using the have-nots against the haves is a democratic staple.
Welcome to The Revolution! It can be viewed at the Democrats’ Museum of Fine Arts, painted with a “stroke of genius” using, unnecessarily, a brush too broad.
Ray
March 17th, 2009
6:21 pm
Jay is spot on with his assessment. There is a whole parade of people responsible for this mess, from politicians of both parties to company execs to mortgage brokers. But we have the same people “fixing the problem” as caused the problem in the first place. Their only solution has been to throw massive amounts of money at the problem….. sort of like pouring water down a gopher hole. When will we learn that history teaches a lesson to us all. My main worry is being in debt to China for close to a trillion US dollars. The more debt you accumulate with your rival, the weaker you become in dealing with them. They will no doubt exploit this situation to their best advantage before this is all over. It’s a lose-lose scenario for the American taxpayer.
Ben
March 17th, 2009
6:21 pm
It’s a total of $165 million under legal contracts. Why chase the best people to the competition? Then AIG will have even less of a chance of pulling out of their tailspin- Not only will they have lost their best people, but their competition will have gained great minds. And only a small division of AIG was involved in the swaps that got them in this mess, most of the company is very profitable.
I’d like to see more outrage over the exponentially larger amount of money that Congress and Obama are spending on things that have nothing to do with the economic crisis. It’s a heck of a lot more than $165 million they are flushing down the toilet and we will have nothing to show for it. At least the AIG bonuses may keep some talent there that will help them. Maybe if Congress cut their own pay, they would all quit and we can get some non-corrupt, non-morons in there. And maybe a few people who aren’t lawyers. Like some scientists and economists. With all the lawyer jokes everyone makes, it’s insanity that most of our elected leaders are lawyers. I guess that’s one of the few professions where people have both the time and the money to run for office. Most of the rest of us are working too hard.
danjonglee
March 17th, 2009
6:33 pm
Christopher Dodd? Who is he?
Eleanor Rigby
March 17th, 2009
6:45 pm
Well, here in America we not only tolerate corruption and incompetence, we reward it! And now there’s talk of not paying for the medical needs incurred by vets while serving their country. Is this what we’ve come to? Ah yes, proud to be American. Gotta love it.
Tom
March 17th, 2009
6:47 pm
The REAL “bailout czar”?……..
Guess who?
Mrs. Godzilla
March 17th, 2009
7:00 pm
Using the haves against the have nots?
Poor poor pitiful haves. Being used and all!
Malarkey. The haves are not being used, they are using us. This is not the start of class warfare, it’s just another skirmish in the ongoing battle.
radiowxman
March 17th, 2009
7:24 pm
Hey, I’ve got a job for y’all. The base pay isn’t all that much more than what you make right now, but here’s the deal: I’ll give you an end of the year bonus if you stick with us for the whole year. So go ahead and include that in your budget — it’s right here in the legally binding contract that you’ll sign as terms of employment with me.
It doesn’t matter if it’s a corporate executive or a union worker. A contract is a legally binding document that needs to be upheld unless renegotiated in good faith by both parties.
This could have been solved easily. There could have been a provision in the bailout stating that all bonuses needed to be renegotiated.
But nope. In the frenzy of “OMG we have to sign this bill now or the world will collapse into flames and American Idol will get cancelled and the Cubs will win the World Series!,” the esteemed senator Chris Dodd made sure that those bonuses would get paid.
Of course, it’s no coincidence whatsoever that Mr. Dodd was one of the largest recipients of AIG’s campaign donations.
And now, lo and behold! Mr. Dodd is amongst those leading the pack criticizing AIG. Hmmm. Perhaps we should be directing our anger elsewhere.
But then again, as long as politicians can divert our attention to those awful greedy fatcat rich people, maybe they can escape our ire.
Wyld Byll Hyltnyr
March 17th, 2009
7:34 pm
Jay, so you say, “The people who caused this mess continue to profit from it — 73 people…” So your contention is that the AIG derivatives desk had, at its peak, 73 people – all of whom stayed at the firm through the bonus date, all of whom created large losses, and all of whom did not deserve that bonus which they were paid. Is that so?
Is it feasible that AIG once had more than 73 people on the derivatives desk and that those persons who ran up huge losses were fired. Is that feasible? Is it further feasible that the 73 who were paid the bonuses were: 1) either people who had always run profitable books or new hires; 2) ran profitable books during 2008 that greatly benefited AIG and the US Taxpayer; 3) actually earned the 2008 bonuses; and 4) would not have stayed or come to AIG through 2008 if a retention bonus or guaranteed income was not on the table and that things could have been a lot worse at AIG without these folks. Is that feasible?
During the past six, there has not been a month when an executive search firm has not asked me if I had interest in a C Level job at a bad bank. My response is always the same; I need huge cash compensation and extraordinary equity upside with three years comp guaranteed. GUARANTEED. Why would I leave a stable situation to risk being at a company that could fold tomorrow and leave me with nothing – NO RATIONAL PERSON WOULD TAKE THAT RISK.
This whole bonus hub-bub is but a means to deflect blame to AIG employees from where it lies – Der Fuhrer Obama and Heir Geithner. If the bonuses were wrong, those responsible should be held to account and either fired or made to resign – whether it is the AIG division manager, the AIG CEO, the AIG board, a Treasury functionary, or Taxdodge-Timbo, or your beloved Fuhrer, himself. Let’s not forget that Der Fuhrer and Taxdodge-Timbo just retraded the deal with AIG less than 30 days ago and the issue of bonuses should have been covered – and would have been covered if Tax-dodge Timbo had the knowledge of a second year distressed debt associate.
Der Fuhrer Obama has whipped the country into a kristlenacht-like frenzy, when, were the facts known, the bonuses are legal and may be justified in light of individual performance that made AIG’s 2008 a lot better than it would have been to the great benefit of the US taxpayer.
Taxpayer
March 17th, 2009
7:35 pm
I’ve never considered this to be a case of trying to save AIG. Quite the contrary. AIG died long ago. I thought that the Fed had to step in to basically take on the role of bankruptcy court and financier for an orderly wind-down. The phrase AIG is too big to fail to me means that it couldn’t just go belly up over night. The reason is that we knew just enough about what they had on their books and how they were intertwined with everything that keeps the financial system functioning to know that the consequences would be catastrophic. Also, recall that we had no regulation or oversight of the derivatives market or the securitized debt market so the Fed was going into this mess initially blind and unarmed for the most part. Anyway, their failure would have triggered a Domino effect like no one could likely even imagine but there certainly were plenty of people coming up with some scary scenarios. Otherwise, AIG would have gone straight into bankruptcy. It takes time and a lot of money and effort to wind down such massive operations involving trillions of dollars in an orderly manner. But, in the end AIG should be nothing more than a bunch of sold off pieceparts.
George American
March 17th, 2009
7:39 pm
It is very obvious that the government should have stayed out of the market, period. It is government policies that put AIG in the corner.
Government will not get them out of their pickle. We should let them figure it out themselves.
I Report/ You Whine
March 17th, 2009
7:40 pm
You ought to see how much money OneTerm gave to ACORN.
Dwarfs this “outrage.”
RW-(the original)
March 17th, 2009
7:42 pm
The people who caused this mess continue to profit from it — 73 people getting a million bucks each, and 22 getting twice that amount — and apparently there’s not a damn thing to be done about it legally.
I beg to differ, Jay B., something was already done legally. The Dodd Amendment in the Porkulous bill that had to be passed before anybody could read it or we’d all die or something indemnified these bonuses and their recipients. It’s the law and it’s got President Obama’s fingerprints and signature all over it.
I wonder who got the most in campaign contributions from the folks at AIG??? Oh, Chris Dodd!!! My oh my.
G
March 17th, 2009
7:46 pm
Yep, this is the point where, if a Rushpublicant were in office, they would start another war to distract voters.
radiowxman
March 17th, 2009
7:51 pm
True. Obama’s already tried to distract voters by going after Limbaugh. The “It’s Bush’s fault!” line is growing stale. Wonder what he’s going to try and distract us with next?
G
March 17th, 2009
7:52 pm
Fixed Noise has apologized for putting up video of Vice President Biden saying the fundamentals of the economy are strong…but the video was from the campaign and he was mocking McCain.
Guess Drudge and Newsmax missed that one.
Jay
March 17th, 2009
7:56 pm
Says Whiner:
“You ought to see how much money OneTerm gave to ACORN.
Dwarfs this “outrage.”
How much, Whiner? Document it, please.
I Report/ You Whine
March 17th, 2009
7:59 pm
Remember when Oblahmi told us Caterpillar would rehire their workers if his porkulous package was passed?
Caterpillar to lay off 2,454 workers in 3 states
You know how many other lies you’ve been told by OneTerm?
Neither do I, I don’t have near the time required to count them all up.
ew
I Report/ You Whine
March 17th, 2009
8:01 pm
OK, here ya go-
Title XII of the spending legislation backed by the Democratic congressional leadership and the Obama administration would dole out $1 billion in old-fashioned slush funds for the Community Development Block Grants (CDBG) program. Local politicians love CDBG because it is flexible. The program gives them wide latitude when spending grant money and allows local leaders to use federal dollars on local projects that they wouldn’t dream of spending their own local tax dollars on. ACORN loves CDBG because it is adept at lobbying for CDBG funds.
A separate $10 million is provided in the stimulus package to develop or rehabilitate low-income housing under the Self-Help and Assisted Homeownership Opportunity Program (SHOP).
But the biggest chunk of the $5.2 billion comes in the form of $4.19 billion for foreclosure relief through the Neighborhood Stabilization Program.
That’s not counting how much he lied about.
It could be billions more.
Joey
March 17th, 2009
8:02 pm
Jay is not spot on here. He has had many opportunities to name names. He has be asked, pleaded with to name names. But the only names he could manage to list are Bush and Cheney. Even now in a state of real and obvious anger he cannot bring himself to write Dodd, Frank, Waters.
Hew is so comitted to Hope and Change that he cannot speak truth even now.
radiowxman
March 17th, 2009
8:03 pm
I am glad that Mr. Bookman is venting his frustration at the Wall Street types who are receiving the bailout, and nary a word for the administrations that allowed it. Or, be more specific, one of the two administrations.
G
March 17th, 2009
8:03 pm
This is Bush and Paulson – no accountability. This was the money given to them back in September by Bush and Paulson.
President Obama has made accountability his #1 priority. Why do you think these banks are turning down the second round of stimulus money? Because there is accountability.
They took the first lot of stimulus money from Bush and Paulson because they didn’t have to answer to anybody.
Wyld Byll Hyltnyr
March 17th, 2009
8:04 pm
Jay, since you are into quantification, howsabout quantifying staffing of the AIG derivstive desk and the monetary value of the performance of those who received bonus payments/ Or, perhaps, you are ready to goosestep into Der Fuhrer Obama’s finacial industry kristalnacht?
radiowxman
March 17th, 2009
8:07 pm
Accountability his #1 priority? Huh. I’ll remember that if he puts a tax cheat in charge of the IRA. No, wait…..he did that already didn’t he?
radiowxman
March 17th, 2009
8:07 pm
Or the IRS. Either one.
G
March 17th, 2009
8:08 pm
Does anyone know when and where the next scheduled AIG shareholders meeting will be held?
As taxpayers, now that we own our 80% share of AIG, we all need to attend this meeting to make some changes in our company.
Oh, that’s right, Paulson made sure we got non-voting stock. It’s the Rushpublicant way to exercise democracy…”Here, you pay the bill, but silently, no vote”.
Paul
March 17th, 2009
8:09 pm
Jay
My mom told me the same thing – as i tried to visualize it, I always got grossed out (what’s the best way to cut off your nose?) and I’d get distracted. And that was a nice point about legitimate anger and illegitimate targets. True in so many ways.
And I STILL like Taxpayer’s idea: Congress passes a law aimed at AIG execs that imposes a tax equal to 100 percent of their bonus.
And then may I suggest Taxpayer move to Connecticut, where the governor appoints him/her to fill out the seat vacated by Dodd, who resigned due to embarrassment, shame and the realization he’s dishonored the office and sold out his constituents.
(Music from South Pacific, voice of Ensign Nellie Forbush singing “and they call me a cockeyed optimist”)
Wyld Byll Hyltnyr
March 17th, 2009
8:11 pm
G 8:03 pm
I am a financial industry guy. “Accountability” isn’y why banks are trying to get out from under TARP; it is because banks view Der Fuhrer Obama, Tax-Dodge Timbo, Backdoor Barney, Chris Dodd, and Nancy Pelatio as irrational, unreliably, idiots.
Paul
March 17th, 2009
8:13 pm
G 8:03
[[This is Bush and Paulson - no accountability]]
Did you not read RW-(the original)’s 7:42 (concerning Sen Dodd’s amendment in the original legislation to protect corporate bonuses) before you wrote that?
G
March 17th, 2009
8:15 pm
Fire them all…don’t spare a single executive.
There are plenty of fresh college graduates with business degrees who are bound to do a better job than these schmucks.
And then we hear the so-called “experts” claiming that President Obama’s cap of salaries and bonuses will rid Wall Street of “true” talent. Yeah…that’s the idea.
Midori
March 17th, 2009
8:17 pm
you wingnuts all sound like Charlie Brown’s teacher.
You spoke much more clearly during the debate(s) over the auto industry, and how “overpaid” the workers were.
Now it’s all about defending the Wall Street scum, and throwing every scoop of democratic blame you can muster.
Funny how that works out.
getalife
March 17th, 2009
8:17 pm
Great distraction from the “lost ” trillions but they both suk.
And now the blame game.
Paul
March 17th, 2009
8:19 pm
dropped posts, sigh…
Jay, I liked the comment about legitimate anger and illegitimate targets. Happens a lot.
For the record: I STILL like Taxpayer’s suggestion from a couple days ago – Congress passes legislation taxing AIG bonuses at a rate equal to 100 percent of the bonus.
Then Taxpayer moves to Connecticut, where the governor appoints him/her to serve out the remainder of Sen Dodd’s term, as he, due to shame, embarrassment and an acute sense of guilt over selling out his constituents to Big Money, resigned.
(Music from South Pacific, Ensign Nellie Forbush singing “and they call me a cockeyed optimist”).
G
March 17th, 2009
8:19 pm
Idiot Bush snuck out in the dark of night to Calgary, Canada to give a speech today. Considering he can’t speak, that had to have been a hoot.
And yes, shoes were thrown.
RW-(the original)
March 17th, 2009
8:19 pm
G,
You can kid yourself all you want, but Geithner has been involved in this bailout fiasco since day 1. Supposedly it’s what he’s good at and made him indispensable even though he’s a tax cheat. Of course if this is what he’s good at I’d hate to see him doing what he’s bad at.
Your Fox/Biden story is pretty meaningless by the way. If they showed Biden out of context from the campaign they should, and according to you did, apologize, but Obama and his Czarina of Financial Wizardry both said last week that the fundamentals of our economy are strong.
Midori
March 17th, 2009
8:21 pm
Bush gave a speech in Calgary today, and had to sneak in through the back door.
You guys sure know who to pick them.
All we have to show for our win last November is this guy who doesn’t have a valid birth certificate, can speak only with the aid of a teleprompter, and is a not-so-secret Muslim/Socialist/Arab.
Wyld Byll Hyltnyr
March 17th, 2009
8:22 pm
Midori – name one of the AIG guys who did not deserve his bonus – how profitable was his book – what would AIG’s numbersw have looked like without the contribution of his book.
As always, you are selling from an empty wagon of liberal blah-blah-blah
The Corporal
March 17th, 2009
8:22 pm
YAWN ……..
Midori
March 17th, 2009
8:24 pm
If you ask nicely, I will.
Otherwise, go up a rope.
RW-(the original)
March 17th, 2009
8:25 pm
Paul,
Just so there’s no confusion the Dodd Amendment is in the stimulus bill that Obama rushed through in the dark of night, not the original bailout legislation that Bush rushed through in the dark of night.
getalife
March 17th, 2009
8:29 pm
I think they kept Tim around to try to clean up his mess with Paulson and then will toss him under the bus.
Paul
March 17th, 2009
8:31 pm
RW-(the original)
Thanks for keeping it accurate. Now, to see if this will make it thru – gee, wonder if I’m banned by the IT gremlins and just didn’t know it?
or is it just dropped posts? sigh…
Jay, I liked the comment about legitimate anger and illegitimate targets. Happens a lot.
For the record: I STILL like Taxpayer’s suggestion from a couple days ago – Congress passes legislation taxing AIG bonuses at a rate equal to 100 percent of the bonus.
Then Taxpayer moves to Connecticut, where the governor appoints him/her to serve out the remainder of Sen Dodd’s term, as he, due to shame, embarrassment and an acute sense of guilt over selling out his constituents to Big Money, resigned.
(Music from South Pacific, Ensign Nellie Forbush singing “and they call me a cockeyed optimist”).
G
March 17th, 2009
8:33 pm
CATFIGHT: Laura Ingraham vs Meghan McCain
http://www.huffingtonpost.com/2009/03/13/meghan-mccains-not-having_n_174734.html
The Rushpublicant party just keeps on unraveling. Get your popcorn ready.
getalife
March 17th, 2009
8:35 pm
Hey, remember the first Paulson proposal that read like a ramson note.
It was.
Remember when w spewed wall street got drunk.
They did.
G
March 17th, 2009
8:38 pm
Paula @ 8:13, Do you take everything RW says to be gospel? I don’t.
Midori
March 17th, 2009
8:42 pm
Fox News Apologizes For Misleading Viewers With Old Clip Of Joe Biden
Martha MacCallum, co-anchor of the Fox News program “The Live Desk,” apologized today after Fox News “inadvertently” used a six-month-old clip of Joe Biden talking about the economy.
The misleading segment featured splices of recent interviews with Obama administration officials discussing the state of the economy. One clip showed Joe Biden saying that the “fundamentals of the economy are strong.” The Huffington Post reported yesterday that the clip of Biden was taken from a much earlier stump speech, and that he was repeating a statement John McCain made on the campaign trail.
http://www.huffingtonpost.com/2009/03/17/fox-news-apolo…