73 AIG executives - including 11 who no longer work for the company - were each last week given bonuses worth more than $1m [with total payouts at 165 million dollars].
Problem is AIG have already received 170 billion dollars in Federal money, and are due to receive another 30 billion. Obama has sucker written all over him even as AIG vacuums up billions.
So what's the spin on this? Well, instead of throwing AIG another 30 billion, they'll deduct a bit of money from that figure, and rush through some legislation to tax the bonuses at 100% or some some nonsense.
So basically, AIG symbolically pay back 165 million out of 200 BILLION, and the Democrats are happy?
The real nonsense is that Government money keeps the fat cats going, and we can argue all we like about how it may have been government policy that fueled this, or any number of other reasons, but the real issue is how much the State will use such events to interfere with business. It's the wrong way to "fix" things.
As an aside, those bonuses were effectively contracted retention payments. With AIG viable, can they simply break contracts because Obama didn't clarify how the money was to be spent?
If AIG had gone into receivership, these people would be lined up to receive 2 cents in every dollar over 5 years, as some sort of "generous" compensation scheme, like genuine investors are being offered in some of the spectacular finance company crashes here in New Zealand (and I doubt staff did that well either).
Here's the real challenge to Obama - check who still has loads of money at the end of your first term in office. They'll probably be the only people able to afford to contribute to your re-election campaign. Will you accept their money then, or insist they pay their taxes?
Related Link: US Government to force repayment
Related Link: An ideal time for bonuses is right before an election campaign, not right after one
Problem is AIG have already received 170 billion dollars in Federal money, and are due to receive another 30 billion. Obama has sucker written all over him even as AIG vacuums up billions.
So what's the spin on this? Well, instead of throwing AIG another 30 billion, they'll deduct a bit of money from that figure, and rush through some legislation to tax the bonuses at 100% or some some nonsense.
So basically, AIG symbolically pay back 165 million out of 200 BILLION, and the Democrats are happy?
The real nonsense is that Government money keeps the fat cats going, and we can argue all we like about how it may have been government policy that fueled this, or any number of other reasons, but the real issue is how much the State will use such events to interfere with business. It's the wrong way to "fix" things.
As an aside, those bonuses were effectively contracted retention payments. With AIG viable, can they simply break contracts because Obama didn't clarify how the money was to be spent?
If AIG had gone into receivership, these people would be lined up to receive 2 cents in every dollar over 5 years, as some sort of "generous" compensation scheme, like genuine investors are being offered in some of the spectacular finance company crashes here in New Zealand (and I doubt staff did that well either).
Here's the real challenge to Obama - check who still has loads of money at the end of your first term in office. They'll probably be the only people able to afford to contribute to your re-election campaign. Will you accept their money then, or insist they pay their taxes?
Related Link: US Government to force repayment
Related Link: An ideal time for bonuses is right before an election campaign, not right after one
The problem with AIG is that it is so embedded in other organisations that if it went bust, the havoc it would wreak could potentially spark another depression. The very real fear of that happening gives the suits at AIG all the leverage.
ReplyDeletePersonally I would prefer GM and Chrysler to go bust, the staff of Fannie May et al. be tried for fraud and for Bill Clinton to be impeached a posterori for signing into law the Bill that allowed such blatantly stupid credit lines.
What an absolutely bloody marvelous headline.
ReplyDelete10 points for the title - brilliant!
ReplyDeleteNice points in the content too.
Funnily enough, I've left the same sort of comment on various blogs whenever I come across a good post title, musing that it would almost be worth creating a blog that recorded such things.
ReplyDeleteI am appreciative that I've managed to hit the button, so to speak.
(It only takes one or two comments to qualify, let's not set the bar too high)
Turns out specific wording was added BY THE DEMOCRATS to the bailouts to ensure that the bonuses were paid.
ReplyDeleteThe members of Obama's own party have some explaining to do!
"The members of Obama's own party have some explaining to do!"
ReplyDeleteNot to the MSM, they won't Skyman because they won't be asked.
Great headline Zen!
Mr Tips, I unfortunately agree with your assessment - unfortunate because it deserves to fail, but the consequences are potentially catastrophic.
ReplyDeleteOn the other hand, I felt I had to make a point about the righteous handwringing from the Obama government is merely symbolism and empty posturing.
Not to mention the the increasing danger that Obama will intervene in far more destructive ways than we might realise.
Skyman's comment adds an interesting twist to that thought.
Zen
ReplyDeleteabsolutely. You are quite right in your headline (which was a cracker!). Obama is a sucker - he is so up to his eyeballs in paybacks he is effectively stymied.
The USA is about to enter a decline as the economic powerhouse. For that reason I am learning Hindi.
I like the way the media completely ignores the contributions the Obama team have received from AIG. Would be nice of those parasites paid 90% tax on those wouldn't it.
ReplyDelete