We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Roger's post here today captures some of the inanity swirling around the AIG situation over the past few days. In my view, the AIG focus is populist, boob-bait scapegoating - along with a (doubtless welcome) chance to trash Wall St. Everybody loves to trash it until they need a loan, want to make an investment, or want to start a business. It's a distraction from the real issues in the economy which pose hard and complicated questions. Tough finance and tough politics.
The previous owners of AIG (the shareholders and bond holders - me included, I am sorry to say) have already been thoroughly punished. Like it or not, though, AIG is still one stone in the arch that holds up the superstructure of the global economy, same as Citigroup (same as Lehman was, and we saw how that worked out). Unlike Citi, We The People now own AIG, so it behooves us to run it well in a businesslike fashion unless or until it is broken into parts and sold. Thus of course those folks should get their contractual bonuses. That's how these folks get paid: it's not "extra" for doing a good job. Their salaries are token, and generally quite modest. Not getting your bonus is a finance company's gentle way of saying "Start looking for another job. We don't need you here anymore because you are not adding enough value to our enterprise." If they don't get paid they will leave, and our national "investment" in AIG will go down the toilet. We are getting these guys cheap, too.
Giving our AIG 2007 bonuses to "retain employees" smells bad because these same people, apparently, are agreeing to work for $1 plus negligible extras in 2009. Hmmm...doesn't make sense to me. Nor does the administration and Congress NOT knowing how the bailout money would be spent. They doth protest too much. Who did they think would get these billions AIG owed to the likes of Goldman, etc? They were insuring the banks for Pete's sake.
This looks like another one of Emanuel's catastrophes "to be taken advantage of" while trying to ensnare the populace in a trillion-$ budget and more gov't control of e-v-e-r-y-t-h-i-n-g. Just try reading that stimulus package. A governor would have to be crazy to sign on to it.
Note Peter Wallison's article in the WJS on another STUPID, STUPID, STUPID step being considered by our politicians all:
"While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. The provision, now called “the Dodd Amendment” by the Obama Administration, provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax.
Some one of our commenters here corrected me when I gave the date of this pivotal law before in a discussion, [and bless you for doing so, whoever you are] but this whole meltdown mess was started during Jimmy Carter's administration, in 1978, when the Community Reinvestment Act was passed. As you all know, this was a ruling that banks could not use their traditional methods of verifying the credit histories of those folks applying for mortgages, because the Democrats decided that pretty near everybody should be able to get mortgages and buy houses, even those with miserable credit and no ability to pay mortgages on $250,000 houses when they earned $30,000 a year. This stupid law was expanded and reinforced during Clinton's administration, again to make Democrats feel good about how generous they were being with other folks' money.
Despite all of the Democrats inelegant tap-dancing on this issue and others connected to the present financial meltdown, they own this recession. And all the prevarication by the present Administration is so much "blowing smoke."
And I don't quite see how they can take those bonuses, which have already been paid, away from the recipients. As far as I know, Congress can't pass a Bill of Attainder ex post facto. That's unconstitutional.
So all that Congressional rushing around last evening on the news was not only disgusting, it was smoke and mirrors. I'm sure we all share a disgust at having our hard-earned taxes flung at the 'wolves of Wall Street.' But it's legal. And if AIG is ever going to be dismembered properly, we'll need those particular wolves to do the job. Damn them.