Bill Kristol sees an opportunity for the GOP in the backlash over the inexcusable AIG bonuses:
But if capitalism is to survive, shouldn’t the Republican party, the party that defends democratic capitalism, be particularly vehement in denouncing its excesses? Isn’t this a pretty spectacular one? And isn’t this a moment for the GOP to separate itself from the Bush administration as well as the Obama administration, who together have been responsible for an incompetent and improvident bailout? Figuring out the right policy going forward with respect to toxic assets and the rest is, of course, a major intellectual task. But being on the side of a healthy populist reaction to the AIG situation is at least a good political start.
Good luck with that:
Senate Minority Whip Jon Kyl (R-AZ) blamed the “tone deaf” bankers for creating the political environment that allows Obama to call for a cap.
“Because of their excesses, very bad things begin to happen, like the United States government telling a company what it can pay its employees. That’s not a good thing in America,” Kyl told the Huffington Post.
“What executives have done is troubling, but it’s equally troubling to have government telling shareholders how much they can pay the executives,” said Sen. Mel Martinez (R-FL).
Sen. James Inhofe (R-OK) said that he is “one of the chief defenders of Obama on the Republican side” for the president’s efforts to reach across the aisle. But, said Inhofe, “as I was listening to him make those statements I thought, is this still America? Do we really tell people how to run [a business], and who to pay and how much to pay?”
Up next, Bill Kristol proposes the GOP get in front of the populist rage over the War in Iraq.
I know everyone and his sister has said this already, but these GOPers had no problem telling GM, Ford and Chrysler how much their employees should make.
It’s the old adage: Steal $100 and you’re a crook; steal $100 billion and you’re a Captain of Industry™.
I figured we’d hear something like from these guys at some point.
When all you have is tactics…
Okay. I’m pissed off about AIG executives getting big bonuses after the bailout, too.
But I’m hearing things that suggest that at least some of these bonuses were already locked in contractually before the bailout was even requested. In other words, if AIG chose not to honor those contracts by paying bonuses already agreed on, they’d get sued–and lose.
Does anyone know if that’s the case?
If so, then obviously, considering the performance of these executives, the contracts were bad bargains. Putting into an employment contract, ‘you get a bonus, no matter what,’ is, no doubt, a bad deal. But "we made a bad deal" has never been an defense for simply not paying.
But if we demand as a cost of the bailout that the company spend attorney fees defending a contract claim that AIG’S going to lose and end up paying anyway (with interest), doesn’t that seem like a worse deal?
Now, demanding as a cost of the bailout that these idiots get shitcanned, given their agreed-on bonuses and escorted off the property by security with the contents of their desk drawers in a little box…THAT I could get behind without reservation. Demanding as a condition of the bailout that all future compensation be tied to actual performance benchmarks, definitely.
But the Feds coming in and saying "previous contracts are null and void…." Hmmm. Don’t know if we want to go there.
Nim, ham hock of liberty
Gee, we don’t seem to have any problem telling people who receive social welfare benefits what they can and/or should spend the money on. Food stamps? Subsidized housing? Workfare?
Attaching conditions to welfare benefits, so that the scolds can make sure that every penny is spent in an approved way, is practically a national sport. And, more importantly, it often makes sense, as long as it’s implemented through sensible policy.
I find the AIG story a bit hard to follow in general. I also don’t understand the ramifications of possible contractual obligations here. I guess once I’ve sorted it through I’ll feel more outraged, or maybe less.
Bill Kristol, comically wrong. Again! This guy just gives and gives.
@J.D. Rhoades: The contracts should have a termination "for cause" clause in them. For those that truly screwed up, AIG should be able to terminate the contract for cause and not pay the bonus. They could get sued, but that is nothing unusual.
Isn’t this akin to trying to separate one’s skin from one’s body?
I’d love to see "Republicans United Against teh Excesses of Capitalism". It sounds like the sort of thing you’d see on Slow Wave.
Telling unions what they can pay the workers? You betcha!
Telling shareholders what they can pay executives? Deeply troubling!
Of course, there’s also the point that the government *is* a shareholder in these companies…a very big one at that.
Read Glen Greenwald about this issue. AIG could easily block the payments IF they wanted to. Congress could pass immunity to lawsuits for AIG if we really wanted to block this crap.
The Democratic party is lucky Republicans are so wedded to defending the interests of the rich that they won’t take advantage of this opportunity. They’ll continue to yell about the administration helping people who can’t pay their mortgages or their medical bills, while we dole out billions of dollars to make sure executives of failed companies get their bonuses. And isn’t it remarkable that Republicans had no problem regulating what a company could pay it’s employees as a condition for receiving government aid, when those employees were union auto-workers; but bonuses for executives are sacrosanct!
And to continue, while I realize it’s a difficult situation, I’m beginning to feel sick contemplating how the current administration has handled the banking crises, and I say this as someone who’s an enthusiastic supporter of it in almost every other area. It’s not just the billions of dollars were giving to ensure AIG executives get their bailouts, it’s the hundreds of billions we’re giving to Geitner and Paulson’s pals who bet and lost on complicated risky derivatives. From Jane Hamsher:
Businesses like Goldman Sachs bet huge amounts of money on the derivatives market, insured them by using AIG, and now we are paying them off. And now it sounds like we’re paying them off even when defaults didn’t occur. These people are stealing us blind, and if the administration doesn’t wake up,it’s going to undermine everything else they’re trying to do.
And where do you propose that the jury that would find in favor of AIG’s incompetent employees (and, in effect, against every taxpayer in the country) would come from?
This is what was reported on NPR this morning and there may be something to it. As Barney Frank noted, however, that while these greedheads may be legally entitled to their bonuses, they are not legally entitled to their jobs.
To add insult to injury, we’ve been sucker brunched. Don’t read this before lunch. You’ll lose your apetite.
“Because of their excesses, very bad things begin to happen, like the United States government telling a company what it can pay its employees. That’s not a good thing in America,” Kyl told the Huffington Post.
Talk about tone deaf. *We are only discussing these rules for companies owned by the U.S. Taxpayer.* GAH, this whole thing is so maddening. It’s a wonder this country held together as long as it did.
@J.D. Rhoades, this is one more reason why keeping these institutions afloat as zombies is a such a problem. If you simply bankrupted them and cleaned up, all these old contracts are void. Course because of the republican rewrite of bankruptcy law, counterparties get first dibs. Even the shadow market counterparties. You know, this grand theft has been a long time in the making, and well planned, no wonder it is working out so well for those benefiting.
If the choice is between bankruptcy where they get nothing or renegotiation, I’d imagine many of these ‘geniuses’ would opt for the latter.
Aside from which, aren’t insurance companies kind of famous for being the douchebags who will find and invent all sorts of new justifications for why they can’t pay for your operation or the damage to your car or home even though you’ve paid all of your premiums on time?
I’ve read elsewhere that AIG is justifying this saying that a lot of the derivative contracts could be in default if they don’t pay out these bonuses or if their managers quit en masse and a foreign government appoints a minister to manage the accounts in their place.
So essentially, it’s a ransom note saying, let us pay them millions or the US government will be on the hook for billions (or trillions).
I’m tempted to call for investigation and some enhanced interrogation of managers at this company.
Godfather Vito "Don" Corleone (R-NY) blamed the “tone deaf” heroin dealers for creating the political environment that has prompted law enforcement to crack down on organized crime.
“Because of their excesses, very bad things begin to happen, like the United States government telling a man that he can’t do what he has to to protect his family’s financial holdings. That’s not a good thing in America,” Corleone told the Huffington Post.
“What heroin dealers have done is troubling, but it’s equally troubling to have government telling family men how much they can pay the executives,” said Mr. Barzini, a competitor of Corleone’s.
Mr. Virgil Sollozzo, an independent businessman, said that he is “one of the chief defenders of law enforcement” for the Police Department’s efforts to work with the small family business community. But, said Sollozzo, “as I was listening to [Capt. McCluskey] make those statements I thought, is this still America? Do we really tell people how to run [a business], and who to pay and how much to pay?”
well yes, but they were talking about middle-class welder monkeys. and union members to boot. fuck em!
but god forbid you say how much a CEO on the dole should make, that there’s communism.
Thanks, I’ll read that.
I say renege on the contracts and let the executives sue. I don’t think that there is a jury in the world right now, considering the circumstances, that would rule in favor of these shitheads.
It might be the case, but it’s not obvious that it would be. If there was any fraud taking place by those individuals, they most certainly wouldn’t win. Further, AIG shareholders have an equally good case against the company which AIG seems to not be concerned about – and a case which is likely worth more than the bonus lawsuits combined.
Since the government now owns controlling interest in AIG, I think Geithner could (and should) tell the CEO to not pay the bonuses and let the lawsuits fly, with the understanding that any malfeasance uncovered during discovery (since Treasury would be doing some of the legwork for the defense) would be handed from Treasury to Justice. If they want to sue the Federal Govt’s company, they should be well aware of the risks associated with doing so. My guess is that you wouldn’t see many lawsuits at all.
Well, when all you have is reactionary snark ….
Oops, sorry, thinking out loud.
But anyway, none of this matters. What matters is what Obama did and said today, along with Geithner. The administration is taking the point on the AIG PR disaster, and the GOP can just eat our dust.
Also, both Obama and Geithner made remarks about the real economic dangers today, having to do with credit flows and the effects on small business, that were sharp, effective, and intelligent responses to a real-life danger to the economy.
Good luck to the Grumpy Old Party(tm) trying to gain a foothold on the fear and anxiety in this economy. They are totally out of ideas, and power, at the same time. Ha ha, there may not be a better-deserved collapse of influence in American history.
Be sure to follow Glenn’s link to Emptywheel.
I don’t get where these capitalist defenders get off even hinting that there is a problem with excessive executive pay. Traitors. By definition if you can get any money, even using a gun to the taxpayer’s head to pay for your bonuses or insisting that your workers won’t perform their contractual obligations to work hard at their jobs, that’s just peachy under strict market loving capitalist rules. If Boehner et al think there’s some kind of problem with the naturally occuring looting of the shareholders and the public then they are halfway to admitting that prior restraint and government action is wholly justified and necessary. Damned slippery slope.
Damned at Random
The bailout money should be linked to representation on the board of directors. If the taxpayers "own" a substantial interest in the corporation, they should have a number of seats proportional to the percentage of ownership until the money is paid back. There will not be accountability until the cronies on the board stop setting salaries for their sponsors in management.
@Nim, ham hock of liberty:
Some Republican asshole (but I repeat myself) was on the tube this morning saying there should be mandatory drug testing for people receiving unemployment benefits…because they wouldn’t want any deadbeat drug users getting taxpayer money, donchano. Fine, I says to self, let’s do mandatory drug testing on our AIG/Citi/JPMorgan overlords, as well, before they get any taxpayer money.
Does this mean Bill Kristol will have to apologize to Rush Limbaugh?
Maybe if we unionized the investment bankers, then they would require some concessions for a bailout.
Kinda not the issue. The problem was making the bailout grants without any conditions. The feds should have been much more savvy about the bailouts, instead of wishing and hoping that Wall Street executives would not be rapacious and greedy fools.
What a maroon! Yeah, we tell people how to run a business when they are using the taxpayer’s money.
And as others have noted, it’s amazing that the GOP loves to opine on how much (or how little) union workers should earn, while scurrying to protect corporate weasels.
Its amazing isnt it? That the GOP says they dont want the govt telling businesses how much bonuses to give out but these govts wont accept money from the govt to help unemployment benefits. So businesses being unemployed let them get their bonuses. People being unemployed they dont need more unemployment benefits we may have to readjust our state policies. lol
“What executives have done is troubling, but it’s equally troubling to have government telling shareholders how much they can pay the executives,” said Sen. Mel Martinez (R-FL).
This f-tard hasn’t been paying attention – the US government is the major shareholder, and shareholders make these compensation decisions all the time. The Repigs want a crony-capitalist system where corporations get a firehose of taxpayer money but taxpayers don’t get to make any decisions or have any influence.
Are these assholes even remotely credible? Perhaps I’ve missed something, but the only people that would be held to a pay cap–a proposed pay cap, mind you–are those working for firms that take bail out money. So if Exxon or Google wants to pay its top executives $75 million a year per person, they can, because they aren’t taking bail out money.
I’m somewhat sympathetic to the argument that excessive limits would make it harder to attract top talent, but I’d like those who make this argument to answer the following: (1) if these people are so talented, wouldn’t they have no problem being hired by firms that aren’t subject to the limit since they aren’t taking government money? (2) Even if they are subjected to the caps for a short period of time, aren’t most of the people in contention for such positions already very, very rich? (2) Even if they aren’t rich, aren’t they likely to jump at the offer to be in such a high position since it would be a big step up and since compensation would likely increase dramatically once the heavy government involvement ends? (4) Exactly how how are the people who would be subject to these caps really "top talent"? How many of them are responsible for what dragged their companies down?
I’m not. There are 10,000 hungry people waiting to take those capped pay jobs for every Galtian fucker that doesn’t want it.
Just to add, while AIG bonuses have focussed peoples’ anger, they are just a pittance, a small percentage of the hundreds of billions of dollars we’re pouring in to shore up the bad bets companies made on the derivatives markets. It’s infuriating that we taxpayers are paying out so much money to the people who helped to bring down the world economy, but in the end it won’t make much difference.
Who will make the first "Bill Kristol is a fucking RINO!" claim?
These statements from Inhofe are stunning. Talk about tone-deaf.
That alone is the entire Republican party. They are a bunch of tone deaf retards.
I hear that also. But "locked in" based on what? The basis of a binding contract is quid pro quo. So exactly what service did the execs provide to fulfill their end of the deal? I somehow think that running the company into the ground is a not a convincing legal argument for claiming they kept up their part of the bargain and deserve their bonuses.
What a ludicrous suggestion. I bet the idiot making this suggestion doesn’t realize that doing anything like that would probably waste much more money than would be prevented from going to any drug users. That’s assuming, of course, he was okay with the massive invasion of privacy by the government.
I think I made myself sound a lot more open than I really am. It’s not an entirely ridiculous idea, like the idea that endless tax cuts promote endless revenue growth. I just meant that I am not willing to automatically rule out any sort of negative consequences from such a cap. I just want to hear some legitimate questions, like the ones I asked above. Instead, the Republicans have offered nothing but straw men and repsonses like, "Hey, look, there are two women kissing! OMGOMGOMGOMGOMGOMGOMGOMGOOOMMMGGG!"
I believe it will to some extent. If we don’t I fear the alternative. Too big to fail better become extinct once this mess subsides.
Point, but after watching years of rank and file being told "If you don’t want this job with its shitty pay and benefits, we can always find someone else who’ll take it and like it", I have no sympathy for ‘allstars’.
micheal steele is talking again and its not pretty. hes so embarrassing
I would be on that side as well, if not for everyone, or just about, that understands the overall situation, saying the entire world economy would collapse if AIG were to.
If he’s just talking about the bonuses and overall pay these crooks are getting, then I think everyone in America is having a healthy populist reaction against that, save for some wingnut congresscritter big bidness tools.
Although Geithner seems to be getting the message on not focusing on helping his buddies on Wall Street, I still think he is Obama’s biggest mistake so far, and needs to go. Though I am changing my mind about Bernanke, as he seems to have grown a pair lately.
All AIG had to do was defer the bonuses until the eyes were pointed elsewhere. But no, they couldn’t show an ounce of restraint and common sense, and now they have the direct attention of the Big O himself. Morans – what were these bonuses for – it’s clearly not for excellence in performance.
umm, i am no fan of our crony oligarchy, but i think there’s a pretty good case to be made that these contracts cannot be voided. See A.I, s.10, US Const.
in the vernacular, except in limited circumstances, the government may not void private contracts. period. Obama most assuredly knows this, which is why he’s trying to tap dance on this point. litigation would simply cost the US taxpayer even more $.
imo, the thing to do is honor the contracts, and then nationalize the company, then renegotiate the deals, (this to avoid triggering default provisions), then fire everyone. the counterparties, most of whom are speculators, will take a large haircut if they are confronted with endless litigation instead of cash.
How to run a business: FDA; SEC; and a host of laws and other acronyms.
Who to pay: immigration laws and quotas, anti-discrimination laws, overtime and workplace laws and regulations regarding compensation, etc.
How much to pay: Federal minimum wage laws.
You might think being a congressman would mean knowing about all of the above already.
Congress can give retroactive immunity to telecoms, but can’t give AIG immunity to bonus lawsuits? Yeah, I believe that.
@Comrade Stuck: Um, no. I saw somewhere–can’t remember where at the moment–that 80% of the CDS action was speculative, that is, not actual underwriting ala traditional insurance. if it all goes poof, the only thing that happens is that the hedgies make less. this is another instance of our professional class feathering their nest through speculation and then asking us to pick up the tab. keep in mind that outfits like GS also made money shorting this economy, too. so they made money selling crap, shorting the crap, and insuring the crap, knowing full well it was crap. there isn’t going to be any collapse if one of those legs gets amputated.
Under the present circumstances?
Or, we can close your doors. Or nationalize you. Which would you prefer, Mister Fatcat?
jake 4 that 1
When I saw a bunch of big bad capitalists screaming for help from the government (or else the economy gets it right in the neck), I thought: Is this still America?
Someone please tell me those clowns all voted against the bailout.
It is all certainly above my paygrade, but if I’m not mistaken, these toxic loans and CDS thingy’s were sold all over the world and are insured by AIG. If they go under and can’t pay up, then it would be like a metastatic cancer on the world economy. Somebody who knows something a bout this should correct me, if I have it wrong.
I see your edit on this and hope your right, because I about don’t believe anything anybody says on this topic anymore.
**I hate economics, I really do.
@Comrade Stuck: some of it, yes, absolutely. an example would be "insurance" written to cover capital ratios for a bank. failure there would perhaps have all kinds of repercussions, though even there i’m not sure, as the governing authority could either guarantee the debt or simply loan the bank the cash to achieve the necessary reserve level, or the new banana republic of the US favorite ploy, just change the rules. yay!
my point is that much–apparently the majority–of these obligations are speculative, nothing else. they are nothing other than exotic variations on futures. the entire market could disappear and the other existing markets could all keep functioning. keep in mind this market (1) is less than 20 years old (2) is totally opaque so that nobody really knows so they can tell all kinds of lies. my point is that for the most part it’s just speculators. we can (a) honor the speculators’ bets while the real economy dries up and blows away due to lack of capital/lack of free cash or (b) let those speculators take either a haircut or just go down the toilet. i have a hard time saying we have to protect all speculative bets in the face of other demands on our money (ex a would be the FDIC). keep in mind that the bill for this is already coming due with spreads on TBills widening. at some point the US will hit the debt ceiling. i would rather the debt was incurred for public goods than for GS.
note that i have a different take on the AIG bonus business–there the issue is whether the government can void a contract. answer: no. as for the CDS, they can simply be unwound, be renegotiated, or just fail. just fail is not going to be more of a catastrophe than a bankruptcy–this is mostly speculation, not productive investment.
dollar general spice
The only explanation for this is that Kristol wants to remain relevant. Don’t feed the monster.
Has anyone ever bought the spices at the dollar store? I’m scared to, I figure they’re ten years old, but the price is certainly right. I do enjoy the weirdo foreign foods at Big Lots…
I’m sure a Michelle Malkin or Rick Santelli-led tea-party would set everybody at AIG straight. Oh, sorry. Tea parties are only for the benefit of those making $250k or more. My mistake.
If you’re actually running a business, of course you would have these underperformers sacked after they had run their division into the ground but before their bonusses were due. But if you’re running a scam to transfer middle class savings to your upper class buddies, making sure that your buddies (and yourself) get those bonusses no matter what is of course far more important.
The underlying problem with companies like AIG (and probably most of the US economy) is that executive compensation is so excessive that instead of providing an incentive for executives to do their best for the company, it has actually become a disincentive. Why worry about the long term health of the company when you can rake in tens of millions in a few years?
Apologies if the point was made above, but I woke up today mad as hell and have to get it off my chest….
This is called shareholder accountability, which is the most capitalist thing around. We’re the primary, overwhelming shareholders of AIG. If we don’t like the way the business is being run, we put pressure on (or fire) the management to do what we want them to do.
In fact, research has shown that compensation committees on executive boards have been piss-ass poor at holding executives accountable for their actions. Instead, every CEO wants to be just above average in a Lake Wobegon way.
Don’t be stupid. [The Yglesias Conjecture: Conservative leaders are, on average, far stupider than you think, even after you think they’re stupid.]
We could honor them with a Necktie Party.
I’ve bought stuff that I figure would be purchased often enough to have a halfway decent turnover rate. Cinnamon, oregano, black pepper, etc. I wouldn’t bother buying anything that’s less frequently used, because goodness knows how long it would be there. (Mind you, when buying stuff that’s infrequently used, I just buy a tiny amount at the Bulk Barn, so that I’m not throwing out 99% of a big jar of Garam Masala in a year.)
@Comrade Stuck: my suggestion: first, all their property confiscated and put up on ebay and then forced labor for five years at a walmart checkout counter. they can live in hegievilles in the parking lots under the floodlights so they can’t scurry away under cover of dark. then, the day before their term is up, we announce that due to effective lobbying, the date of release has been delayed….
beyond reintroducing humiliation as a public punishment when your offense is against the public weal, they would serve as a lasting reminder. much better than heads on pikes (unless the latter were mummified).
@J.D. Rhoades: The question to ask is why they are contractually obligated to pay a "bonus". Bonuses by definition should not be guaranteed, but rather contingent on some sort of benchmark being hit.
My guess is that the guaranteed bonuses provide a way to pretend like financial service salaries weren’t even more outlandish than they are reported to be. Those bonuses were "earned". By "earned" they mean the person was employed and had a pulse, not the company exceeded any particular benchmark.
Who cares if the contracts are air-tight. All the US govt has to do is collect all the bonus recipients in the room and suggest that they voluntarily return their bonuses. In exchange, they:
1) avoid a full body cavity search every single time they fly anywhere (unless they get on a no-fly list, in which case they’ll never fly anywhere).
2) get audited by the IRS every year, for the rest of their lives.
3) have their lives turned upside down in a search for any malfeasance (i.e. not paying taxes on their nannies)
Or they could simply be declared enemy combatants, decked out in orange jumpsuits and sent off to some hellhole prison. We’re talking the US government here. They can do anything they want to anyone. And these fuckers are waving the threat of contracts and lawyers? It’s time to play hardball with these pricks.
Or we could have one of the terms of their bonuses be that they have to eat a literal shit sandwich on live tv, since they’re making eat the figurative one.
Only if the entire country, including pets and farm animals, get to contribute to a shit sandwich equal to the size of the one that we are having eat.
At what point do people start saying that these guys should just be lined up against a wall and shot? They’re sociopaths, the whole lot of them. Think about how we all just raised $5000 for Svensker’s friend. Money isn’t just an abstraction. The money that goes to these fuckers is money that isn’t saving lives in countless other ways (health care, reducing pollution, etc.). Sure the bonuses are a fraction of the bailout but they’re going right into the pockets of the perpetrators of the whole mess. And any claim that these people are necessary to save any of the taxpayers "investment" in this mess is pure, undisguised extortion.
@jibeaux: Dunno about the dollar store, but the ethno-mart is the best way to get fresh tasty spices cheap.
A quote entirely relevant to now:
"The graveyards are full of indispensable men." – Charles de Gaulle
The actions of those executives in exposing the company to liability via fraud is a delightful counterclaim in any suit against AIG. Discovery would be entertaining as all hell and would lead to some serious "Pound Me In the Ass Prison" indictments.
I’d really enjoy having Geightner and Holder make a joint announcement of an AIG task force headed up by a Special Prosecutor.
That might stop the bullshit immediately.
But, said Inhofe, “as I was listening to him make those statements I thought, is this still America? Do we really tell people how to run [a business], and who to pay and how much to pay?”
Well, when WE own 80% of the company… then, yes, we’re the majority stock holder and WE call the shots.
[EDIT: To add, if AIG had not accepted the bailout money, had they still been 100% private and currently floundering and announced these hundreds of millions of dollars in bonuses… then more power to them. Under that scenario, the government and taxpayers could huff and puff all they wanted and then be told to go STFU by the execs, and rightfully so. But, they took the money, they ceded over 80% of their company, making US the majority stockholder; therefore, it’s now our way or the highway for these guys.]
long past time to invest in guillotines
Fuck that. Killing them is too easy. I say let all the drug convictions out of prison and put all the bankers in, instead.
among the owners of those CDS are pension funds and governments large and small, both in this country and around the world.
It’s not as if the only people who are counterparties are a bunch of greedy rich bastards whom we could safely stiff. Lots of retired teachers, cops and firemen (among many others, perhaps including some of your family members) could suffer the consequences if their pension funds take a hit on something like this.
Everybody’s going to have to take a hit, the pain will be spread all around and the only question is who’s taking how much of a hit without the world economy completely collapsing. It’s a hell of a needle to thread and while Geithner is none too popular nor loved these days, thank your lucky stars neither Bush nor McCain nor shudder Palin is running the show.
As for those AIG bastards in London, I’m starting to understand why the proles sometimes resort to revolutionary show trials followed by executions.
IANAL, but just from reading about the Contract Clause on Wikipedia, it looks like it only applies to the states, not the federal government. This makes sense, too, because isn’t this exactly the kind of thing that would happen in a bankruptcy proceeding? Banks won’t go through bankruptcy because it would cause a panic (and because the government is wrapped around their little finger), but in theory this would just amount to moving executives to the bottom of the list of creditors to be compensated.
I don’t plan to worry about this too much, though. There is no way in hell that Congress would lead the charge on this. If we ever get to the point that there’s enough popular pressure to make Congress stick its neck out and void contracts between banks and billionaires, then it will mean that things are very bad indeed.
The ethno-mart and the Bulk Barn, huh? I don’t think I have those. I have ethnic supermarkets, of course, which are always fun. The Latino one closest to me sometimes puts their limes on sale, so they go from the regular price of 10 for a dollar to 20 for a dollar.
Somewhere here there is a giant international foods grocery store that is sort of pan-ethnic. Some day I should go there with $100 and only buy things that I have no idea what to do with, and see what develops.
it’s a win-win for GOP’ers (at least, for their mouth-breathing base). They can bitch about the gummint telling business how to pay employees, or they can bitch about the gummint irresponsibly giving away taxpayer money without any accountability.
This is one of the (many, many) reasons I could never be a shiteating fucking Republican. So much of their traditional agenda – getting the gummint off your back – is a Trojan horse for hidden agendas:
"Get the government off your back" = tax cuts for the rich and government in your bedroom
"Fiscal conservatism" = borrow-and-spend government money on what the Right likes, rather than tax-and-spend government money on what the Left likes
"Ease environmental over-regulation" = gut all environmental regulation and where it cannot be gutted, make sure it’s not enforced.
"Deregulate" = let corporate America run wild, every man and woman and child for themselves.
"Activist Judges" = judges whose rulings don’t consistently favor Republicans
and of course the rest of the time they are flat-out fucking lying to your face. Remember how in 2000 Bush/Cheney said they would pursue a ‘humble’ foreign policy? Remember how they alleged Clinton had overextended our military and only 10 of 12 Army divisions would be ready to fight if there were a war?
So you are saying we have to save AIG to prevent the catastrophe of people losing pensions and such?
And it goes without saying we are better off not having Bush and his cronies who caused this shitpile in charge.
It’s much easier said than done, but I’d much rather bail out pension funds and other entities we’re trying to shore up directly, rather than directing billions of dollars through AIG to Goldman Sachs and other huge companies and hoping the money trickles through the system to them. And then regardless, we need to regulate pension funds and make sure it’s illegal for them to be betting money on derivatives and the like.
Cuomo went nuclear on AIG.
I think I need a cigarette, that was sooooo good.
I smell Grand Juries that are forming as we speak.
This goes beyond tone-deafness. We’re swimming in proof that the capitalist theory of executive pay is a sham protecting a criminal CEO cabal that robs working people of just compensation, shareholders of returns, and the taxpayer of everything these people can take taxpayers for. And the guardians of the common wealth are concerned about the preservation of their dead theories.
There was a General Ullmann in the Civil War who wrote: "The first gun that was fired at Fort Sumter sounded the death-knell of slavery. Those who fired it were the greatest practical abolitionists this nation has produced." Well, by that measure, John Thain was the greatest practical socialist this nation has produced since Eugene Debs. This unfettered capitalism we’ve seen looting every coffer it could find, both private and public, is not a capitalism that works, and if you are not in favor of a capitalism that works, you are objectively pro-socialist.
And yes, Glen Reynolds, this means you.
I’m saying that just declaring the CDS null-and-void might solve one problem while creating a host of much larger problems, like the collapse of European banks who bought A LOT of them and, yes, retired Aunt Millie might open the mail one day to find out her pension is being slashed 30% because all those CDS held by her pension fund are now worth zero.
And how popular do you think Obama would be when a few million pensioners get that happy news?
I am not an expert on this matter but I have read enough about it to realize these CDS are EVERYWHERE and there are no simple solutions. Like I wrote, ObamaCo is really attempting to thread the needle here.
I can hear them now – "its just business. Why do you want to kick my ass over business?"
Its a shame we don’t have a real, live Dexter around to take care of these little things.
I suspect that’s what Geithner, for all the shit he’s taking, is doing–deciding which debts HAVE to be carried (at the peril of countries actually going to war) and which can be written off.
It does no good to make the bondholders take a bath if some bondholders are sovereign governments who’ll take to military solutions for their economic problems.
part of the reason so many pension funds held CDS and MBS is due to the demands on the managers of such funds. In order to meet expected obligations, they must generate a return of X%. (Also, the managers typically are paid in some part based upon their results.) You’re not going to achieve the rate of return needed to pay all those future pensions by just leaving the money in low risk/low reward instruments (like your average CD).
So that’s why they invested in these instruments. They were considered relatively safe (Moody’s said so; everyone relies on Moody’s!) as a way of achieving an expected level of return.
In the long run, if we are not going to allow pension funds to put money in derivatives (and we shouldn’t, or at least greatly restrict it), then either the money needed to pay out pensions is going to have to come from elsewhere (higher contributions? future investments in other instruments which pay similar rates of interest?) or pensions will have to be cut, or some combination of both.
FWIW I get really impatient with the occasional person (Jim Cramer did it most recently) who says, ‘yeah but we got these phenomenal returns for X years!’
yeah and that time I got drunk before I tried to drive home, I was feeling pretty damned good right up until the moment I slammed into a tree at 80mph.
There’s an argument AIG needs to pay out these bonuses as incentives because they need the expertise of these people to help unwind this catastrophe. They’ve argued that if people leave, it might cost us billions of dollars if there are defaults (emptywheel)
Here’s a thought. If the executives at the unit of AIG that helped to bring down the world economy and required huge amounts of money to stay in business need incentives to help clean up the mess they made, let’s make it clear to them that if they do what they can in good faith to get us out of this mess, we will in return not seek jail sentences for selling hundreds of billions worth of . That seems fair to me, and ought to be all the incentive anyone should need.
Damn, that was good.
No one is more ticked than me over these bonuses but I find it hard to believe this wasn’t lawyered to death by the administration to try to stop them but it aint easy….Remember Dick Grasso…..he walked with the lot because he had a contract……As for Kristol……he’s not really a conservative…..we know what his agenda is
Sounds like Cuomo might be part of a solution to this – he’s talking subpoenas and the like and has been investigating the compensation issue since the fall. This is what needs to be done – go after these bastards for fraud or anything else that is applicable that may have been illegal. The deregulators must have left some rules in place that these fuckers stomped on, it’s not like these guys were worried about getting caught at anything illegal or punished if they were caught.
I don’t know. You never want to bet on Bill Kristol’s political judgment, so my instinctive reaction is to say that paying these bonuses must obviously be the right thing to do politically, since he’s saying the opposite. But in this case, I think the Obama administration might do well to follow the GOP’s lead on this (if not exactly Kristol’s). That is, if they start throwing hissy fits and want to take away AIG’s bonuses, Obama should just say: "If you have a good way of doing this, write up that bill, we’ll get it passed, and I’ll sign it."
Sounds to me like AIG needs to be carved up into manageable factions to save what is important, and most of all innocent of the other AIG gambling scams, and to keep from throwing good money down the rathole. Seems also like maybe the only way to do that is for the government to take over operations and stabilize things till the necessary divestitures are accomplished.
I have a headache. Stella! Stellllla!
This whole era is so peculiar. Since Jr was selected in 2000, I went from being a hardline Repub/Libertarian, to someone whose heroes are Byrd, Kennedy and Cuomo. Would ya?
Now, my problem with Obama is that, for all the ululating on the Right, he’s waaaayyyy to centrist for my taste. Let’s get radical, baby. Where are the pitchforks and axes?
Yea, I heard that too. They made a complicated and well booby trapped bomb that only they know how to diffuse. What a fucking country!
Yes, but the discovery and testimony and public shaming of these turdwacks might be worth losing a lawsuit.
Here’s a solution to the whole contractual payment issue:
AIG should ask every employee to give up his/her bonus voluntarily. Have a policy where every employee who refuses to do so will not see their contract renewed (i.e. will be fired).
That way, you’re really putting the pressure on employees to give it up themselves and avoid legal troubles. It’s simple, clean and is a win for AIG since they would be doing something proactive to reduce bonuses, and gives the responsibility to the employees themselves.
Man, the new NYT oped flunky is a real piece of shit.
I’d be all for that.
The Moar You Know
@Andrew: That is FUCKED UP.
Ha ha ha. These Repubs, what they write. The lack of self reflection is always astounding. What a turd.
Mike in NC
AIG is creating new jobs! Bravo!
Don’t see why as a precondition to getting bailout money or guarantees the gov doesn’t let, encourage, or push companies like AIG into Chapter 11 reorganization bankruptcy. A bankruptcy judge could immediately void those executive bonuses and apply other common sense and oversight to expenses like spa retreats and corporate jets.
Believed originally the logic was didn’t want “Too Big to Fail” companies like AIG and other financials entering bankruptcy as it could shaken public and investor confidence. Yeah. That ship has long since sailed. It is way, way, way over the horizon.
Most of the commentors see this as proof that he’s in the closet, that should thrill him. lol.
I have a problem with this. I fundamentally don’t buy that mammoth insurance provider AIG is so rattled by the threat of a lawsuit that they hurry-up-quick paid a contract obligation.
That isn’t how insurance companies operate.
If AIG wanted to dodge this obligation, they would, and they’d have no problem litigating, for years and years. No rush.
Treasury wants these people paid, and so does AIG. Libby makes my skin crawl with this sanctimonious and ridiculous argument that AIG operates on "trust". No they don’t. They operate on holding onto premiums for as long as legally possible before paying a claim. He was the CEO of Allstate. He’s spent the last 20 years listening to his own bullshit. Maybe he believes it.
I also resent like hell the fact that the Obama Administration released this information on the Saturday prior to the Sunday the payments were due. Cute.
In or out, he’s bound to be awfully lonely, I’ve seen his picture and frankly, I doubt if he could attract flies, let alone a sex partner. And gay guys are even more selective than I am.
Via Jane Hamsher, a proposal on how to block the bonuses:
They don’t want to block the payments. In fact, the payments might have gone out last night.
Look, I know these aren’t technically "bonuses". They’re salary guarantees that business people are currently pretending are tied to "merit". I have no idea how long they have used this silly dishonest language, or whether they use it for tax purposes, or balance sheet purposes, and I agree that people have to get paid for the work that they do.
I just can’t stand all this faux outrage. Just pay them.
If the mighty federal government wanted to block these payments, they would. They’re wildly powerful, and the last time I checked they employed 10,000 hot-shot lawyers in the criminal division of the DOJ alone. I have no idea what the civil-end litigation federal lawyer corps includes. Thousands.
Last I checked, the Democrats won the election and bolstered majorities in both congressional chambers.
Also, Tim Geithner was approved by the appropriate Senate committee, and Larry Summers, who presided over and all but encouraged the deregulation of the very markets that AIG is enmeshed in, is basically in charge of the Treasury. The Obama Administration has had the better part of four months to pore over the conditions regarding employment contacts and evaluate said conditions with regards to the "gravest economic crisis since the Great Depression",….and it’s still Republicans fault?
And not for nothing, the bonuses come out to less than 1% of the total bailout money AIG has received so far. The amounts AIG has paid to counterparty and correspondent banks total nearly 60% of the total—money going to various other banks, including Goldman Sachs.
Yes, I understand its only been two months since the Inauguration, but please tell me that Democrats have something more powerful in the holster than "its those damn Republicans…" still. Our government CONTINUES to dole out taxpayer money to Wall Street—no matter which party has control of the government.
The Obama-led Treasury looks like clueless deer in so many headlights and sadly inept for the task at hand.
So what do you propose they do?
Can’t happen that way.
1. AIG made the original obligation, so it is stuck with those, and can’t "spin off" the derivative unit. About the only thing that could be done would be to spin off the good portions, and the BK court could easily unwind that as being a transfer in fraud of creditors.
2. Remember BAPCA 2005, the wonderful credit card purchased bankruptcy reform? The one that Clinton repeatedly vetoed but Bush signed? Under that, derivative counterparties have superliens and aren’t even stayed by a BK filing. They can just snag anything they can reach, without seeking a court order.
Last I checked, the Democrats couldn’t pass a bill to re-affirm that this country is called the United States of America unless they capitulate to 2-3 crybaby Republican obstructionists in the Senate.
I don’t think you DO understand, or you wouldn’t write such drivel. Obama has to unravel EIGHT FUCKING YEARS of Bush’s handiwork. Even if he didn’t, economic policies and cycles take much longer than two fucking months to come to fruition – even in far less dire circumstances.
I agree that at some point (most likely by the end of next year), the Democrats will have to point to their successes rather than Bush’s failures. Save your disdain for then, and a lot of us will happily join you.
Sometimes, this is true. But the alternatives were far worse. The Bush-led Treasury create this clusterfuck, and a McCain-led Treasury would have frozen spending and passed $1 trillion in tax cuts, plunging us into an even Greater Depression.
What magic pony-led Treasury were you hoping for, exactly?
Comrade Stuck @109
You asked, so what do you propose they do?
..and that is the nub of the issue for those who complain about Geithner/Obama isnt it? There aren’t any fail safe, easy solutions — only carefully as possible allocated PAIN.
Believe me, I have plenty of reservations/questions/doubts but as I have posted over and over, there are no really viable alternatives for the uncertainty and even fewer options for knowledgeable, experienced folks who would be willing to take the unbearable heat and punishment of this thing. Geithner can’t even get his deputy positions filled and some want to kick him to the ashcan like we could get a replacement who could take the heat and have the requisite experience with the current system – (not saying its a good system, just that its the one we are in) – not the shiny new one we want to evolve to…
As for the Republicants, they are slow to react on everything. They are responding with yesterday’s dead point of view and keep doing it. Michael Steele is crazy as a June bug and by the time he figures out something to say, events are way beyond whatever his current grasp can appreciate. They are all yesterday’s news getting farther and farther behind in the rear view mirror….I think they will have to develop a new party because this one is dead.
Great posts everyone! — I’m enjoying reading and learning..
@jibeaux: Dunno if you are still hanging around this thread, but I like mail order spices. It works best if you have a friend or 3 to split your order with, tho. My fave is the San Francisco Herb Company.
I’m not talking about economic cycles, but a stipulation of a bailout. It was only two weeks ago that AIG received another $30 billion in bailout money. Two weeks ago. Not two months ago. Not 6 months ago. Two weeks ago. I sincerely hope that the administration knew about this stipulation as far back as two weeks ago and if they did, apparently nothing was done and they hoped nobody would notice. And if they didn’t, then they are even more incompetent than I suspect.
And I said to myself, "Is this America, where a company executive runs his company into the ground so bad the U.S. taxpayer has to bail us out by continually giving us their hard-earned money, and they I can say to that taxpayer, ‘F*@% you you piece of god awful sh!t peasant f*@%ing taxpayers, fork over my god-damned millions of dollars in bonuses from your Depression-hit wallets and do it right now, and also, again F*@% you’?"
Can I say such a thing in America?
Well, actually, yeah, I guess it does look that way here.
You keep shoveling the shit Oliander, someday you will find that pony.
And I noticed you didn’t answer my question about what you propose to fix Bush’s GOP clusterfucking of our country. If your going to come here and sling shit, it will be ignored until you provide an alternate solution to your whining criticism.
Jungle Jim’s "Six acres of food under one roof and the best grocery store ever (at least in Ohio).
Hey, someone has to be frivolous.
> in the vernacular, except in limited circumstances, the government may not void private contracts
Nah, it was established under Bush, in the telecom spying affair, that it’s not illegal for a corporation to do something illegal if the President asks you to do it.
(thx to Glenn Greenwald for picking this up from one of his commenters.)
This would be a good time for Obama to deploy those super executive powers from the Bush legacy. You’ll notice he’s been holding on to those (enemy combatants, signing statements, the FISA ‘compromise’.)
Yes, the super executive powers can be used for GOOD … and not EVIL … and in Obama, we will have a wise and benevolent king (and hopefully the next king will be too.)
Some points to consider.
1) We do not know the terms under which the bonuses were provided. It is possible – VERY possible – that it was money due from 2008, deferred till after various accounting was completed in 2009. While seizure of bonuses isn’t criminal law, most the things I have seen discussed fall into wanting some form of ex post facto action, and that happens to be unconstitutional.
2) We do not know the terms under which the bonuses were contracted. However, under standard business law if a company fails to pay contracted fees (and bonuses do count here) then they hit a number of default triggers. What this means is that any and all counterparties may demand their pound of flesh. That’s estimated at $12 Trillion, more than the estimated asset value of AIG. AIG’s failure to provide this due to lack of assets triggers a revaluation of assets among any counterparties, which in turn MAY allow THEIR counterparties to demand immediate repayment. It cascades from there.
3) In counter to this, if it is determined that the individuals receiving bonuses did so after fraud, the preceding two paragraphs are mooted. A criminal is not allowed to profit or retain profits due to his criminal act. (One of the jobs of an attorney is to sufficiently confuse whether assets are due to criminal or non-criminal profit for this reason – with some legal and moral restrictions.) If Coumo’s action results in convictions of various members of the recipients of bonuses, those members can have their bonuses revoked. If it is determined that the entire department (and AIG) committed fraud (like Enron) then all the bonuses can potentially be recovered. Note, please, the word "if" in the preceding sentences.
4) Confusing the legality and compounding the mess is the fact this department was wholly based in London. It’s possible that most if not all of the members were NOT US citizens. At that point unless the company can be shown to be fraudulent the individuals may escape barring extradition. Extradition is likely but not guaranteed.
It’s a mess, folk, and it will be neither pretty nor easy to clean.
J. Michael Neal
So what? They may have been speculative, but they are also assets on these banks’ balance sheets. If they get wiped out, the bank does to. Shareholder equity is assets minus liabilities. It isn’t assets except the ones that are speculative minus liabilities that get adjusted since they made bad bets.
You can’t take just part of a company into bankruptcy. Either the insurance parts go into bankruptcy, with all of the policies getting in line with the trustee, or the financial products division doesn’t go into bankruptcy. Pick one, because those are your two options.
This is quite aside from the problem that there are a bunch of the counter-parties of the financial products division that we can’t afford to let take the hit. Of course, I don’t think that there’s a way to bail out some of them without bailing out Goldman, too. This runs into the same problem of ending up in court for asset stripping. If the government owns AIG, and the government pays off some counter-parties, good luck trying to defend letting the others sink.
Obviously, I haven’t seen the contracts, but I’d bet that they are written in such a way that AIG is obligated to pay them. It’s not like the financial services industry has never heard of salary that’s called a "bonus" for assorted reasons. It happens all the time. It sounds as if these contracts were negotiated in early 2008, when the fan could already see the oncoming shit. What do you think the odds are that these clowns didn’t cover this possibility?
You guys want discovery in a trial? Again, you aren’t going to get what you wish for. It’s likely to be a pretty open and shut case of contract law. Discovery would get squashed as a fishing expedition.
What kind of fraud are you alleging took place? What they did should have been illegal, but it wasn’t. It was well within the bounds of permitted trading for AIG to sell these contracts naked. There were no capital requirements for these contracts until collateral was demanded. That’s when all hell broke loose and AIG went under. They were acting within the law. Legally, there’s no fraud. Morally wrong doesn’t get you anywhere in court.
A lot of people are clamoring to know who the counter-parties are. I don’t think that that’s all that important. What I want to know is what AIG has already pledged as collateral. This is a very important point. We had a discussion a few days ago about the changes in the bankruptcy code. I still don’t think the law is all that clear, but I was convinced that derivative counter-parties don’t get to seize whatever they want without regard to other creditors. However, it is clear that they can seize collateral that has already been pledged within the contract. It’s critically important to know what has been pledged. Those are assets that do go *poof* from AIG’s balance sheet in the case of bankruptcy. If the pledged assets are large enough, it would be the same thing as saying that the derivatives counter-parties get to go to the head of the line before everyone else. There may be nothing left.
J. Michael Neal
Not so fast. AIG has not received another $30 billion in bailout money. Another $30 billion of bailout money was authorized. There’s a big difference between the two things.
Apparently, the administration has decided that they are going to play Chicken with the bonus recipients. How serious they are, we’ll have to see. I’m not convinced that the people at AIG don’t have us over a barrel. There is a real possibility that, when they say not giving them the bailout money would hurt us more than it hurts them, they’re right.
Like someone here said earlier, give the AIG sh*ts their contractual bonuses and tax them at 99%.
The government’s still allowed to tax, right? Or does AIG get to veto that, too?
Uh, one not led by Geithner and influenced by Summers and Rubin?
J. Michael Neal
Sure, the government gets to tax. How do you plan to write this tax such that it’s not a bill of attainder?
@J. Michael Neal: A special tax based on the authorizing funds as a taxpayer subsidy.
The tax isn’t based on the identity of the people paying taxes, but on the source of the income.
I called this company to investigate possible insurance fraud on a policy of which I am a part owner.
Bastards hung up on me.
Does anyone know of another good company or organization I can call to investigate this matter for me?
J. Michael Neal
Then it would apply to every AIG employee, even the janitors.
@J. Michael Neal: Yes, yes it would, which is why it would be treated like a tax and vary by amount, say, at a progressive rate.
Are you just playing at this? Really?
Yes, he’s obviously funning you. Because any moron could write the policy in 6 seconds. Allow me to demonstrate: Any income over $500,000 earned at a firm that receives federal bailout money is taxed at 100%. Dang, that there was tough.
J. Michael Neal
Actually, I suspect that that wouldn’t pass muster to cover retroactive income. Sure, it’ll prevent future bonuses, but I don’t think that’s what you’re trying to do.
I’ll jump on board your OT comment to agree wholeheartedly with you. I can find the best Spanish or Chinese oddities there for real cheap. The olive oils are my favorite items to score.
On topic, I’d just like to add that the world has gone completely mad.
The 2008 bonuses have not yet been paid, which is why the whole issue came up now.
The London wing troubles me.
From the wapo article today: "It’s going to blow up," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I have a horrible, horrible, horrible feeling that this is going to end badly."
Yeah. You crooks should have taken your freekin’ 500k pay cap and humbly slunk away and done your freekin’ jobs. Yeah, dipsh*t, it’s gonna end badly all right and I think we know who was too bloody tone deaf to see it coming half a year before it got out of control.
I’m hoping someone can take minute (a day and a half more like) to spoon feed this to me: Is AIG not eligible for something comparable to Chapter 11? If it is, why wouldn’t they opt for that? And if they did, would they still be required to pay these bonuses?
Were these bonuses written into this year’s contracts, but promised for last year’s business? If they were, how could AIG have promised such bonuses last year while knowing they were in such dire straits? Did they know, and put these bonuses into contracts to undermine the inevitable bailout? Or did they not know, and therefore should not be trusted to know their own business? Either way…
Does bonus really mean “bonus” (which seems to me to mean something that is beyond what one can reasonably expect)? If “bonus” means what it means, then how can a “bonus” be written in to a contract?
Also, were there no contractual obligations involved in AIG’s receiving bailout money? Wouldn’t there be more pressing financial obligations to be met before bonuses are paid out. Have these been met?
It seems to me that AIG is behaving, upfront, as if they are going to charge off their debt, by paying these bonuses before they do anything else. This company is in the business of owing people money. Shouldn’t they have to square off with their customers before they pay out the beyond-what-can-reasonably-be-expected money to themselves?
If AIG did not receive bailout money, would they have been able to meet the "contractual" bonus obligations? And would they have done so? And if they did not have the funds available, before bailout, to pay out these bonuses, then how can they consider this bailout money “available” in the same sense as, say, profit money would be available, which means after their obligation to their customers? And, if the money were not available for the bonuses, what would they have done, and can’t they do that now? And if last year’s bonuses were promised with funds that did not exist (which they obviously did not), then why don’t we allow the company to get sued however many times it needs to get sued – and just factor that into what they owe? (And who decided how much they needed, anyway?) So, they have to pay out what they promised, plus court costs. So what? Seriously, so what? And they have to pay interest on it: Fuck’em.
Why would the government hand over a shiiiitload of money to a failed company that deals in dividends (puts and calls – which seems analogous to running around like a nut blowing on soap bubbles to keep them in the air), without asking for some accounting, the way that I’d be asked for some accounting if I applied for a business loan?
I am seriously so sorry for the epic list of questions…
No, there were pretty much no guidelines or contractual obligations from the government to any bank / etc receiving these funds.
This was part of the controversy on the part of a lot of people who complained loudly about the lack of regulations and guidelines beginning with Hank & Paul’s 3 page ransom note, then the hardly better bill passed by Congress, and so forth.
As Atrios correctly sums it, it’s just lighting piles of money on fire to try to voodoo off Big Shitpile.
But don’t you god-damn suggest lending money to U.S. automakers — we gots to make sure them damn greedy union workers finally got to give up their ritzy lifestyles!
From the Daily Kos — the idea of taxing the AIG etc bonuses has been made into an actual proposal.
Congressman Gary Peters, according the diary by a former staffer of his, will release this:
Thank you, Congressman Peters. Please don’t ride in any small planes too soon.
“These bonuses are in effect a raid on taxpayer dollars."
Just this morning I was thinking that the word "raid" applied to what the AIG Fatcats were doing. Had they not received taxpayer money, they surely would have taken the (contractual) bonuses anyway and then we’d have called it "raiding their company". (And haven’t they been doing that all these years anyway.)
"The legislation I’m proposing will get taxpayers their money back. Congress must act swiftly on this matter to show AIG, other companies receiving federal support and taxpayers that we mean business when we say that tax dollars are not to be used to enrich company executives.”
Uh huh, yeah. There’s nothing so useful as closing the barn door once the horses have run out.
It’s always been obvious to everyone that the provision about executive compensation should have, could have easily been written into this deal prior to the money being given.
Why did that not happen? Hmmmm…
Many government officials lazily assume that something will not really be a problem among the general public until it is.
I’m personally convinced that that’s one of the reasons the Bush Jr. types were surprised by the severe reaction to their awful running of the Iraq occupation & its disastrous results — they just never really thought anyone would care that much.
More and more things are not going unnoticed because the media are getting in on the act, but for all our outrage on the intertubes and despite letters to our congress folk, this madness continues unabated.
These wall street guys have been caught with their hand in the cookie jar, red-handed mind you. We should be rioting in the streets.
Someone here the other day pointed out, quite correctly I think, that the voting booth has become the new pitchfork.
Vote the mo-fos out.