A.I.G......Help me out.

[sweatboard]

            Ok, I know there are people on this board that know a lot more about this than me.  What I want to know is who's responsible for the bonus loop hole.  Correct me if I'm wrong but didn't the Bush administration provide the majority of the bail out money for AIG?  If so wouldn't the loop hole have been written into the proposal for the bailout that the Bush administration presented?

Personally I think A.I.G. is the one who needs take 95% of the heat on this one.  Let's stop protecting the corporations that are running us into the ground with greed.  It seems like the conservatives want to put the heat on Geithner and Obama for lending out this money and allowing the loop hole.  It also seems to me that the Republican Party is suddenly all about cutting ties with the same monster corporations that they've supported and in return received support from for way to long.  I think it's great that there is outrage over the bonuses but I have to ask....Couldn't we have used this same outrage all these years these Corporations have been acting completely irresponsible and robbing us blind.  I guess all good things come to an end.  I think it takes a while after you rub your eyes for things to come fully into focus, but at least we are waking up.

[capt. scotty]

Obviously we couldve used/needed the outrage when the economy was better and these people were still receiving their bonuses.

I dont think AIG needs to be singled out, because I think many more similar companies run the same protocol, but it just hasnt come to the surface/been as bad.

IMO it's also terrible because I think 1 of the most underpaid/appreciated professions is teachers, and their salary is severely lacking. What even gives people incentive to be teachers this days?! Honestly, I might have considered teaching if the pay wasnt the same as a tenured toll booth worker. Take them out of the equation, and where are even the most intelligent students???

[el_chode]

This is just but a small microcosm of the larger picture. What you have is a regulation giving a corporation an inch, and they take it a lightyear. The question for AIG is a question of ethics, not legality. The legality issue arises with Congress, both pre- and post-bonus.

From what I understand, Sen. Dodd included the provisions at the urging of Tim Geithner with assent/tacit consent from Obama. The media has sort of run wild with this by saying this is $193M in the face of $193B or whatever the numbers are, which makes it seem like a lot less. Put it in persepective and add some zeros (which doesn't make any more or less wrong), but it looks like this:

$193,000,000,000 in TARP funds
____$193,000,000 in bonuses

Yes they were contractual, and no, they were not really bonuses but retention expenses. A bonus implies contingency on success, which is obviously missing. So the question now becomes a matter of why anyone would want to retain these people and who is making the decision? If the government has a large stake in the company, shouldn't they be making an effort to fire these people? On the flip side, is it cost effective to fire these people when their replacments may cost millions more to replace?

At the end of the day, at least to me, it's on the people receiving these bonuses to return them. It's a massive affront to the rest of the public that the people who were complicit in losing the public's money is now taking it and padding their pockets with it.

It is also a failure of congress to proscribe these bonuses before hand. It is fairly unconstitutional to retroactively tax these people, but if congress has no problem doing that, it should have had no problem in prohibiting these bonuses regardless of contractual obligations. In fact, I think it would be more legally feasible to argue for the breaking of the contractual obligations over this stupid 90% tax

EDIT: Also, I believe the new rumor is that congress has their pensions tied up with AIG, but I'm not sure of the validity of that statmeent

[el_chode]

Obviously we couldve used/needed the outrage when the economy was better and these people were still receiving their bonuses.

I dont think AIG needs to be singled out, because I think many more similar companies run the same protocol, but it just hasnt come to the surface/been as bad.

IMO it's also terrible because I think 1 of the most underpaid/appreciated professions is teachers, and their salary is severely lacking. What even gives people incentive to be teachers this days?! Honestly, I might have considered teaching if the pay wasnt the same as a tenured toll booth worker. Take them out of the equation, and where are even the most intelligent students???

I hope Obama moves to the merit-based pay. My mom is a teacher and gets paid less than most of the gym teachers, who don't even have to plan a curriculum or deal with the parents.

Also, if you want outrage that escapes my other post with regards to number games, I believe Merril Lynch recieved 9B in TARP funds and allocated 3B to bonus payments.

[goose]

The problem lies with the fact that when everything is sunny they all take what they want.  If there were more stringent rules during these times, they would have to adhere to them, and possibly never get into this mess.  I for one think large corporations have too much control over things that happen around us. If everyoone thought about people as a whole, and not themselves, or their bonuses, this wouldn't be an issue.  But as we see, too many people thrive off of greed, and it hurts me as a human to see it.

[Penny Lane]

Well, that's  not an easy answer.  On the one hand, you have "bonuses" that are really people's compensation. The contracts were made a year ago. In Connecticut, if you sue a company for separation of wages and win, you're entitled to treble damages & lawyers fees. So, being a contract dispute, AIG could have been out 3 times as much on many of the Ks.  In addition, congress handed out money with no strings attached which allowed for this to happen.

So it's a little of column A -AIG irresponsibly paying out "bonuses", column B- contractually they were obligated to pay them & column C- Congress was asleep at the wheel, making knee jerk reactions to the financial situation and not thinking it through.

--the new tax law they're throwing out there to recapture the bonuses is another knee jerk reaction IMO--and unconstitutional? i am hoping most will volunteer to give them up, which i believe some already have?

There is a really great article in Rolling Stone this week that breaks down the housing crisis, the AIG issue and specifically CDOs that really caused most of this; the writer (i think matt thaibbe or taibbe) broke it down for normal people like us.

[Penny Lane]

EDIT: Also, I believe the new rumor is that congress has their pensions tied up with AIG, but I'm not sure of the validity of that statmeent

yes this makes sense---they have a bulk of the govt retirees pens/retirements

[Angry Ewok]

The problem lies with the fact that when everything is sunny they all take what they want.

This statement could also be applied to politicians.

If there were more stringent rules during these times, they would have to adhere to them, and possibly never get into this mess.

Yeah, that's likely - I mean, the government is awesome at oversight, right?

I for one think large corporations have too much control over things that happen around us.

Hey, we're close to agreement there - I think the government has too much control over things happening around us.

If everyoone thought about people as a whole, and not themselves, or their bonuses, this wouldn't be an issue.

This isn't going to be a popular statement, by far, but that just isn't human nature. We look out for ourselves and our families. We work, we toil, we suffer for our own good and our own moral imperative - not for the good of some "people as a whole"...

But as we see, too many people thrive off of greed, and it hurts me as a human to see it.

The War on Greed is like the War on Terror and the War on Drugs.

Quoting someone else,

I hope Obama moves to the merit-based pay.

I haven't put much thought into this, but I think I'm all for it as long as the criteria is measurable. It won't happen, though - the teacher's union won't let that happen.

[Angry Ewok]

--the new tax law they're throwing out there to recapture the bonuses is another knee jerk reaction IMO--and unconstitutional? i am hoping most will volunteer to give them up, which i believe some already have?

Yes, it was a knee-jerk reaction, and yes, like most knee-jerk reactions from congress, it's unconstitutional. And I think most of the people have already surrendered their bonuses, not sure.

[Angry Ewok]

EDIT: Also, I believe the new rumor is that congress has their pensions tied up with AIG, but I'm not sure of the validity of that statmeent

yes this makes sense---they have a bulk of the govt retirees pens/retirements

BINGO

[el_chode]

US V Carlton

Now, I believe that the 90% tax should fail on a bill of attainder or ex post facto grounds. However, in this case decided in the Tax Court and ultimately SCOTUS, the basic idea is that the court would uphold such a retroactive tax if it was the intended ends of a misguided means on behalf of congress.

Bleh.

[el_chode]

A few cartoons I found amusing:

[Penny Lane]

politics too, obama can't come across too p*ssed about this (well he did in the beginning, but since then, he's pulled back) he still has to work w/Congress and get more stimulus passed; not much he can do; he barely passed the first TARP.

[el_chode]

politics too, obama can't come across too p*ssed about this (well he did in the beginning, but since then, he's pulled back) he still has to work w/Congress and get more stimulus passed; not much he can do; he barely passed the first TARP.

You know what really annoys me? The pork was put in the TARP only to get people on board. If you're not on board for its intended purpose, then what are you on board for?

[Angry Ewok]

What pisses me off is that politicians voted for something they didn't even read. You want to talk about the dangers of greedy people running wild? These elected losers are a threat to national security.

[el_chode]

What pisses me off is that politicians voted for something they didn't even read. You want to talk about the dangers of greedy people running wild? These elected losers are a threat to national security.

In all honesty, if there were smart lawyers out there, I wonder if the mere fact of the bonuses being paid could be unconstitutional. Article VIII of the Const provides:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States

Depending how you read that, if the taxes are directly related to paying the debts and general welfare, then how is the paying of the bonus related to this means?

[Angry Ewok]

Okay, how is a monetary bonus different than employer's providing health care?

[Penny Lane]

What pisses me off is that politicians voted for something they didn't even read. You want to talk about the dangers of greedy people running wild? These elected losers are a threat to national security.

patriot act?  

they are a threat to nat'l security and they pretty much slaughtered the 4th amend in one swoop

[Penny Lane]

What pisses me off is that politicians voted for something they didn't even read. You want to talk about the dangers of greedy people running wild? These elected losers are a threat to national security.

In all honesty, if there were smart lawyers out there, I wonder if the mere fact of the bonuses being paid could be unconstitutional. Article VIII of the Const provides:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States

Depending how you read that, if the taxes are directly related to paying the debts and general welfare, then how is the paying of the bonus related to this means?

i agree but lack of oversight is part of the reason this happened. hands off approach and these 4 or 5 guys at AIG running wild; even a smart lawyer and this stuff is so complex; years of litigation and for what? will AIG still go under? i get depressed thinking about it.

[el_chode]

What pisses me off is that politicians voted for something they didn't even read. You want to talk about the dangers of greedy people running wild? These elected losers are a threat to national security.

In all honesty, if there were smart lawyers out there, I wonder if the mere fact of the bonuses being paid could be unconstitutional. Article VIII of the Const provides:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States

Depending how you read that, if the taxes are directly related to paying the debts and general welfare, then how is the paying of the bonus related to this means?

i agree but lack of oversight is part of the reason this happened. hands off approach and these 4 or 5 guys at AIG running wild; even a smart lawyer and this stuff is so complex; years of litigation and for what? will AIG still go under? i get depressed thinking about it.

I get depressed that we now have an opportunity to start fresh and build a new boat, but everyone seems more content to ride in a raft covered in patches that are covered in patches and hope that we don't run out of material for the patches.

I don't even think it was hands off or hands on or it was too much regulation or not enough, it was just half-assed mis-guided regulation that basically was warned against in Federalist 9 & 10 - regulation and laws in favor of the factions.