Yes, I'm as infuriated by the AIG bonuses as everyone else. But I know in truth, this is a meaningless political football.The real shame is that after the Great Depression, which was caused in no small part by deregulation and irresponsible financial conglomerates, the government put measures in place to make sure institutes that were "too big to fail" would never plague the country again. There are two ugly options when banks get too massive and blow up: you either "let 'em fail!" or you give them a shitload of money so they don't.
Over decades, the banking industry (read: old fat rich white guys) effectively lobbied Glass-Steagall and other regulatory measures into oblivion. Now I'm no economist and maybe parts of those rules and legislation were draconian and counterproductive. But make no mistake, we are in this mess because the measures that were designed to keep us out of it were dismantled over decades by greed. The Bush administration sealed the deal by putting the term "free market" on crack.
The first time around, they just went ahead and "let 'em fail!" which put us into the Great Depression. "Let 'em fail" turned out to be a real Hindenburg of ideas, people. So, while it's emotionally satisfying to shake our fists and cry "outrage!" and demonize AIG et al., fact is we own that mother.
You, me, all of us.
Hence, as part owner of AIG, I say this: Those contracts were in place before I was. I'm obligated to pay these people whether I like it or not. There's nothing I hate more than someone who squelches on a deal and, (I hate to admit it) it just ain't that much money in the grand scheme of things.
So pay up, shut up and move on.
27 comments:
I used to think that the Iraq war would be BushII's legacy. More and more, I'm thinking that it will be the climate of fervent deregulation and blind-eye-turning that did so much to foster this. The bursting of the tech bubble and things like Enron should have been warning signs - indeed they were, to some people - of the dangers of the untrammeled free market that American right-wingers worship.
Instead, Bushies focused their attentions on a stupid colonial war.
No matter how you cut it, Bush's legacy is not a good one.
I guess I agree, Erin. It is just damn frustrating to see these people who caused most of this problem get even more money. Notice I said most, There is enough blame to go around.
But then again that is what Bush/Cheney wanted. They finished deregulating the banks, so their rich banking fiends could get richer. And then two wars and "no bid" contracts so the rest of their friends can get rich, i.e. Haliburton, KBR and Blackwater (XE). After all this mess, all the Rebublicans can say is we should do more of the same! Ronald Regan would be proud...never let the facts interfere with political ideology.
Although, you realize Erin, that all of our conservative friends on this blog are about to tell us it is all the Democrats' and Pres. Obama's fault.
Umm... you realize that you kinda sorta agree with Limbaugh on this, right?
Citigroup just announced they are spending $10 million of "our" money to remodel their executive offices.
To be honest, Miles, I don't listen to Rush and I don't know where he stands on this, but I'll take your word for it.
That said, he and I might agree on "pay up and shut up," but I wonder if he blames this bullshit on the same sources I do.
I hate to use a cliche, but this piece of shit mess is the trickle-down free-market chickens coming home to roost. There are no good options.
I just thank god we've got the Obama administration heading up the recovery.
Stockholders--sue these guys for bad business judgement! (Cf.: Brehm v. Eisner: "Okay to give your old camping buddy with no corporate experience a $100-million severence package as long as you incorporate in Delaware which says that a corporation can rape a nun as long as there is a 'quorum' and you all have D&O insurance." Okay it doesn't say that--but close...)
You could make a real case for "shorting" an American corporation as soon as it makes a grandiose sports sponsorship.
Don't make me rattle off all the cases where you would have MADE money (cough, cough...Citi Field! Enron Stadium!)--the only example I can think of where you would have LOST is Minute Maid. Okay, well, there are NASCAR cars painted with the Viagra logo, but you get the idea...
Okay...but stopping the outrageous bonuses and profiteering of these criminals is not a refusal to bail out the banks. Can't we at least put the execs in stocks and publicly humiliate them from here to eternity, or make them work the rest of their lives for McDonald's wages? Bail 'em out, for the people's sake...but please, punish the assholes at fault.
Clarification: 'em = the banks
No matter who you voted for, it was our elected officials who gave these motherfuckers (the banks) a license to steal. God knows I'd never find the link now, but Bush's SEC dropped the ball a million times.
So what? These people recreated the exact conditions that led to the Great Depression. Now it's our problem and the moment of satisfaction we'd get for hanging up some overpaid broker up by his buster browns doesn't mean shit.
History will judge this. In the meantime, we have to survive it.
I don't listen to him either, but I did hear a snippet where he essentially says that we should just pay and shut up, basically.
But no, I definitely don't think he blames the same source you do. He's a Republican mouthpiece, so naturally the Dems are to blame for everything. Not politicians, not elected officials, not consumers, not banks, but Democrats. If only the world were so simple.
Hey, I guess a girl's obliged to have something in common with Rush at least once in her life.
Maybe I ought to buy him lunch.
I think Zen's on to something. If we had all started shorting stocks when Greenspan was issuing his famous "irrational exuberance" warnings we'd all be rich, fat and happy right now. And believe me, plenty of die hard Republicans have ridden this downturn to the bank. Another of Wall Streets dirty little secrets.
RJ
We're cherry-picking socialism here.
Just nationalize the banks, and then FIRE the fuckers.
The House voted 328 to 93 today to get back most of the bonuses paid to executives of the foundering A.I.G. by levying a 90 percent tax on them.
Can we move on now? For fuck sake.
Amen and well put!
"Too big to fail? Then don't let them get that big in the first place!"
Former Republican Kevin Phillips (on C-span)
Yes, contracts should be honored, but I don't want to "move on" if moving on means forgetting, and we end up going through this same bullshit at some future date.
I mentioned socialism earlier, but a taxpayer supported moneyed class could easily resemble an aristocracy. I think we fought a little war in 1776 to get rid of that.
That's my whole point, Kirk. Glass-Steagall mandated the separation of commercial and investment banking, hence prohibiting the big conglomerates.
The feeling most Americans have when watching this shit is analogous to the feeling you get when you are standing in line at Kroger and watching people buy lobster tail with food stamps: I paid part of my check to diminish human suffering, and the asshole I was trying to help is now punishing my good intentions.
Wow, Erin. You sound like me - a Republican. Cats and dogs are indeed living together now.
Al
TRAG
and watching people buy lobster tail with food stamps
What part of this bothers you? They are free to spend their food stamps how they see fit ... if they choose to spend in an unwise manner, they will suffer the consequences. Either this shit I'm smokin' (for medicinal purposes folks, like, seriously) is really good or your attempt at an analogy really sucks.
So? Why wait for history...let's throw "the elected officials" in the stocks too. I'm all for it. They can have a seat right next to the "motherfuckers" they're in cahoots with. And perhaps "it doesn't mean shit," but it would still feel good. :)
Have a good day, Erin.
Andrew Sullivan, whose blog I think is a must read regardless of which side of the aisle you're on, had a great take from one of his readers
Here's what they said:
I just read the actual AIG FP bonus contract, which was posted on the NY Times website. Two things jumped out at me. One is that it's not a "bonus" contract at all. It's an "Employee Retention Plan." In other words, it's not meant to be structured as a reward for performance. It's more like just another part of the employee's salary package. To me it's a lot less upsetting if the payout is part of a standard pay/benefits package than if it was meant as an actual reward to reflect on the performance of the company.
The other thing that strikes me as very strange, though, is the self-stated rationale of the Retention Plan. According to the recitals section, the contract exists, among other things:
To recognize the uncertainty that the unrealized market valuation losses in AIG-FP's super senior credit derivative and originally-rated AAA cash CDO portfolios have created for AIG-FP's employees and consultants
I'm not an accountant or a lawyer, but the way I read that is that, as of the December 2007 effective date of the contract, AIG was already aware that their CDOs and market cap were diving or preparing to take a dive, and this was a way of offsetting those losses for the very employees responsible for those failures.
I've been around the block a few times, and have participated in a fair few bonus and retention programs myself, but I've NEVER worked anywhere ballsy enough to say "Hey, you're efforts are destroying this company, in fact we expect the company to go down in the next year or two, so here's some money to ensure that you stick around for the fun." I mean, this is why the letters W, T, and F were invented.
"This is why the letters W, T, and F were invented." I think I'm going to steal that.
If you're standing in line at a Kroger's, you are in a time warp.
Confusing a possessive with a contraction is another reason why the letters W, T, and F were invented.
If you're standing in line at a Kroger's in OHIO, you are indeed in a time warp, but I believe the supermarket chain still exists elsewhere in the country, possibly in Georgia, from whence Mr. Wizard hails.
I'm sure I'm using "whence" wrong, but I've got a cold and can't think.
Erin, you said:
"I hate to use a cliche, but this piece of shit mess is the trickle-down free-market chickens coming home to roost."
I would like to politely point out that this is in fact not correct.
This piece of sh*t mess was actually caused by the Federal Reserve Bank (in exactly the same way as the Great Depression was caused - by constant monetary inflation/currency debasement).
This is a very important point, which is why I mention it.
I'm curious - have you personally considered the explanation for this economic crisis (and the Great Depression) that is offered by Austrian economists?
For example, have you listened to any of the Ron Paul or Peter Schiff YouTubes on this topic?
If so, and if you've rejected that explanation as incorrect or intellectually unsound, that's one thing. But if you haven't, I really think you should.
I have considered it, and I am quite convinced it is the truth.
Also, I'm sure it's somewhat (fairly?) (really??) tedious to have me continually popping in here to beat this same drum.
But I do love you, and I want only the best for you.
G
Erin, you also said this:
"History will judge this. In the meantime, we have to survive it."
That is some Grade A Prime Truth right there.
Rock on.
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