AIG -- Time To Rewrite the Dictionary
Based on this latest story in The Washington Post about millions in bonuses being paid to AIG executives, there are any number of words whose meanings need to be revised:
1) Bonus: My understanding is that a bonus is related to performance. At a company that needed a federal bailout to remain afloat, what metric is being used to assert that the bonus payment is positive? If there is no metric, then why is it called a bonus at all?
2) Retention: The bonus payments are sometimes referred to in the context of retaining these employees. In what universe have the talents of those at AIG Financial Products just become more valuable? Are there other financial firms just lining up at the door of AIG FP, begging these folks to come wreck their companies like they wrecked AIG?
3) Ownership: The article notes that for its $170 billion, the government has an 80% ownership stake in the company. And the "owners" are being told by the CEO that they cannot determine compensation levels of the "workers?" This is yet another reason why the government should not "own" corporations.
Even more importantly, this is another example of why bailout in lieu of bankruptcy is a terrible idea. Do we now still think that we couldn't have done better with our $170 billion by selectively supporting AIG's creditors after AIG went into bankruptcy than by shoveling that money to AIG so that it could be siphoned off in any number of ways, including these bonuses?
AIG BONUSES !!!!!!
I VOTED FOR President Obama but I did not VOTE for him to approve my tax money to PAY AIG executives bonuses.
If there was an agreement to pay them bonus before TAX PAYERS MONIES they should be paid with STOCK in AIG ….and why should they get bonuses AT ALL???? They failed …..They should be FIRED!!!!!!! Lots of people AVAILABLE to do their job ….
WHY HAS NOBODY FROM THE SEC BEEN FIRED YET???????? AT BEST THEY ARE INCOMPETENT AND AT WORSE CORRUPT!!!!!!
It was the Fed, not the Treasury
The AIG bailout was done by the Fed from it's balance sheet, not the Treasury. The Fed is what's known as an independent federal agency. It has its own source of funds, doesn't get an appropriation, its budget isn't approved by Congress, etc. This is Bernanke's responsibility.
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"Do we now still think that we couldn't have done better with our $170 billion by selectively supporting AIG's creditors after AIG went into bankruptcy than by shoveling that money to AIG so that it could be siphoned off in any number of ways, including these bonuses?"
What does "selectively" mean? Wouldn't this be hard to implement?
Selectively
Selectively can mean a number of things. Institutions with deposits insured by the FDIC would have a high priority. Everybody else -- European banks, investment banks, and hedge funds would have a low priority.
Tackle from another angle
Change the rules.
If you recieve money from company X, which has been bailed out by the US tax payer, then you qualify for a new tax.
Bailout/Anti-looter tax - Set at income over $500k, for this finacial year; first stipulation is no exemptions, rate is 120% of all funds over $500k.
So if you were paid $600k your EXTRA (bailout) tax bill is $120k, let alone the cost of the no exemptions on the rest of your income.
You wouldn't need to stop bonuses, because no one would want a $1 Million bonus that would cost them at least $1.2M in tax.
This would also catch all the rats who left a sinking ship with their bags of money. And also punish the Captains of Industry who let their ships run aground by inaction or greed.