Blog on the Run: Reloaded

Monday, March 16, 2009 9:06 pm

AIG bonuses and your tax dollars

Filed under: You're doing WHAT with my money?? — Lex @ 9:06 pm
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So AIG, which so far is into the taxpayers for more than $170 billion, is saying it was perfectly entitled to pay executives of its Financial Products division, the division that brought the otherwise well run company to its knees, bonuses totaling more than $165 million.

Treasury Secretary Tim Geithner asked AIG not to pay the bonuses. AIG’s CEO, Edward Liddy, told Geithner to get bent.

Liddy appears to have two arguments in favor of the bonuses: 1) He needs them to retain top talent. 2) The company is contractually obligated to pay the bonuses and might get sued if it doesn’t.

Well, there’s a single response to both of those lousy arguments, and that is that the people getting the bonuses are the same people, by and large, who got AIG into this mess. So with respect to argument 1, if that’s “top talent,” I’d hate to see the bush leagues, and it’s not like there’s a huge job market for them out there anyway. With respect to argument 2, oh, God, please, throw me into that briar patch. I think the taxpayers would find the proceeds of discovery in such a lawsuit quite enlightening. I also think criminal investigators would, which is why I’m almost certain that the last thing the bonus-receiving execs want right now is to have to explain under oath what they did and how they did it. They would give those bonuses up without a whimper if the government insisted.

Which it should do. But it shouldn’t stop there.

AIG has been happy to take $170 billion of taxpayer money and then do with it what it damn well pleased, including losing more than $60 billion of it last quarter. The president and Geithner need to make abundantly clear to Liddy and his minions that they don’t call the shots, and if Liddy still doesn’t get it, they need to take over the rest of the company (taxpayers now own 80%), fire everyone above the rank of junior VP, fix the damn thing (including destroying the division that got them into this mess) and then sell the newly healthy company back to private interests.

At a profit to taxpayers.

UPDATE: This is beyond contemptible. Seems some of the AIGFP execs are threatening to blow the company up, financially speaking, if they don’t get their bonuses. Inasmuch as “the company” is, to all intents and purposes, U.S. taxpayers, we should just arrest the lot of them.

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8 Comments

  1. FALLOUT GROWS: Those who voted for the stimulus supported the clause to protect the AIG’s bonuses. Obama’s Own Stimulus Bill Protects the AIG Bonuses He Now Condemns —


    http://www.butasforme.com/2009/03/17/obamas-stimulus-bill-explicitly-grants-aig-the-legal-right-to-hand-out-bonuses/

    Comment by Jax — Tuesday, March 17, 2009 4:09 pm @ 4:09 pm

  2. That’s actually not a surprise.

    Comment by Lex — Tuesday, March 17, 2009 4:13 pm @ 4:13 pm

  3. WHAT I SAID AT EDCONE.COM

    It appears that Obama’s whiz kid Chancellor of the Exchequer was asleep at the wheel cuz he had a chance to prevent this ( phony ? ) bonus ” outrage ” .

    Jim Geraghty points this out as follows:

    “Pres. Barack Obama says his administration will “pursue every legal avenue” to stop insurance giant American International Group from paying $165 million in executive bonuses.

    It’s nice to hear that, but it’s a little after-the-fact. Not that long ago, the government had considerably more leverage over AIG.

    Despite this administration’s reflexive instinct to talk about the problems it inherited, the fourth round of AIG’s government assistance — an additional $30 billion — was approved March 2.

    Why couldn’t someone at Treasury* have made that assistance contingent on not handing out additional bonuses to managers who put the company in this hole?

    * I suppose it might help to have someone besides Tim Geithner working at the Treasury Department, to help manage issues like these . . .”

    Posted by: Fred Gregory | Mar 17, 2009 at 06:42 PM

    Speaking of Tubo Tax Tim,
    the words of Cole Porter come to mind.

    “Like the beat beat beat of the tom-tom
    When the jungle shadows fall
    Like the tick tick tock of the stately clock
    As it stands against the wall

    Like the drip drip drip of the raindrops
    When the summer shower is through
    So a voice within me keeps repeating

    **INCOMPETENCE AT TREASURY**

    AND: Obama’s latest costly blunder.
    http://www.riehlworldview.com/carnivorous_conservative/2009/03/obamas-latest-costly-blunder.html

    Posted by: Fred Gregory | Mar 17, 2009 at 06:57 PM

    Comment by Fred Gregory — Tuesday, March 17, 2009 9:39 pm @ 9:39 pm

  4. It gets worse. A provision inserted into the bill by Olympia Snowe that would have let the government tear up contracts like that got struck at Geithner’s insistence. I’m pretty sure he doesn’t realize whom he’s supposed to be working for. Between this and his failure to go ahead and nationalize clearly insolvent banks (something you and I might disagree on), I think he’s a clear failure.

    Comment by Lex — Wednesday, March 18, 2009 3:32 pm @ 3:32 pm

  5. Heh !

    http://finance.yahoo.com/news/Analysis-White-House-Dems-apf-14677357.html

    Comment by Fred Gregory — Wednesday, March 18, 2009 4:47 pm @ 4:47 pm

  6. Grandstanding gets bitch slapped. Yeah !

    http://www.denverpost.com/harsanyi/ci_11935722

    Comment by Fred Gregory — Wednesday, March 18, 2009 10:13 pm @ 10:13 pm

  7. Now Fannie wants to play Santa

    http://finance.yahoo.com/news/Fannie-plans-bonuses-of-up-to-apf-14679491.html

    Comment by Fred Gregory — Thursday, March 19, 2009 3:59 pm @ 3:59 pm

  8. It just never ends, does it?

    Comment by Lex — Thursday, March 19, 2009 4:22 pm @ 4:22 pm


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