Obama's gonna take 'em to the mat!

  • Posted by a hidden member.
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    Mar 16, 2009 6:27 PM GMT
    Obama blasts AIG 'outrage,' will try to block bonuses

    Story Highlights

    •President says he will try to block bonuses to AIG executives

    •Obama, referring to $165 million in extra pay, asks: "How do they justify this outrage?"

    •AIG has received $173 billion in U.S. bailouts over the past six months

    http://www.cnn.com/2009/POLITICS/03/16/AIG.bonuses/index.html

    I wonder how someone figures he deserves a bonus when his company is going under. They obviously didnt perform well.


    This is interesting...

    "In a letter to Geithner, obtained Saturday by CNN, AIG Chairman and CEO Edward Liddy said his company was taking steps to limit compensation in AIG Financial Products -- the British-based unit responsible for issuing the risky credit default swaps that have brought the company to the brink of collapse. "

    It was the brits who did it! ... icon_eek.gif
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    Mar 16, 2009 6:40 PM GMT
    The AIG answer is that these are contractual bonuses to which it is legally bound, negotiated prior to its financial collapse and subsequent taxpayer bailout.

    The problem is one of timing & appearances, not to mention that many of these senior executive recipients are the idiots who ruined AIG in the first place. It may ultimately be legally required to permit the bonuses, but Obama is wise to slam them. And use the issue to hammer AIG into submission regarding future government demands over strict oversight in return for the bailout. Not to mention being an object lesson for other businesses.
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    Mar 16, 2009 6:57 PM GMT
    I am behind the president here. I am sure there might be the exception that truely earned his bonus, but as a whole most are standing on thier contract agreement. Thier greed here is what drove the compnay under. I say fire them, and let them go on unemployment.
  • styrgan

    Posts: 2017

    Mar 16, 2009 7:06 PM GMT
    I'm amazed at AIG's attempt to even offer a defense of itself.

    Let's face facts.

    As an employee, when your company is losing $60 billion dollars in a quarter and on the verge of bankruptcy, your "bonus" is that you got to keep your job.
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    Mar 16, 2009 7:09 PM GMT
    styrgan saidI'm amazed at AIG's attempt to even offer a defense of itself.


    The letter from Libby, AIG's CEO, explaining the bonus fiasco reads like a giant middle finger to Geitner.

    Let us hope that the Obama administration, like the Bush administration, sees a Libby going to jail. icon_evil.gif
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    Mar 16, 2009 7:09 PM GMT
    Agree with Vespa. In addition, there was absolutley no restricitons placed on the money they received. As long as taxpayer money is being used to help idiots who lied and cheated on their mortgage applicaitions then there should be no double standard imposed on any other entity getting Obama money.
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    Mar 16, 2009 7:14 PM GMT
    I am always hesitant to give outright support to a politician who is in a state of righteous indignation. Often I feel they are playing to the polls as well as speaking from a sense of conviction.

    Until we know the details of the contractual obligations with AIG staff it is hard to say "yes roll them back".

    Based on my experience, performance contracts are drawn up at the beginning of a fiscal year with clear deliverables. If the staff met these deliverables then it is hard to reverse them. Perhaps the AIG staff who received the bonuses will turn them back (not that likely).
  • HndsmKansan

    Posts: 16311

    Mar 16, 2009 7:16 PM GMT
    These people are competitors of mine and when I have some ask me about AIG Valic and whether they are a decent company, I am very reluctant to condemn a competitor. However I think its ridiculous. You would think they would bend over backwards to look the model of..............

    Perhaps they will learn yet... minus 20% of their clients!

    icon_mad.gif
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    Mar 16, 2009 7:16 PM GMT
    houstonmuscle10 saidAgree with Vespa. In addition, there was absolutley no restricitons placed on the money they received. As long as taxpayer money is being used to help idiots who lied and cheated on their mortgage applicaitions then there should be no double standard imposed on any other entity getting Obama money.


    Well I did not buy property. I played by the rules

    When do I get my bail out?
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    Mar 16, 2009 7:32 PM GMT
    You and the rest of us that play(ed) by the rules are mad as hell. And while the politicos are at it, they should start by looking at their own house. For years there has been and still is outrageous misuse and waste of taxpayer money. Whoever is free of guilt throw the first stone!
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    Mar 16, 2009 7:38 PM GMT
    My suggestion to the President. Have AIG employees give back the money. If AIG refuses to then tell AIG to give back the 170 Billion. Im sure if they face thier company going under and unempolyment lines they will be more than eager to give it back.
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    Mar 16, 2009 7:40 PM GMT
    WWOD?
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    Mar 16, 2009 8:07 PM GMT
    I would like to hear what those contractual obligations are?

    Is AIG saying that they have contracts with execs that say no matter how the company performs they get a bonus. Usually bonuses are contingent on performance, I think.

    If the bonuses are contractual obligations, I hope Obama starts looking at other avenues of retribution. I could imagine a case could be made against execs of a corporation that used investors money....401Ks, pension funds, etc.... in a reckless manner and with no regard for the investor, so that these guys could be staring at some prison time. That might get their attention.

    Or replace the Merrill-Lynch bull with a guillotine.... In fact, that might not be a bad idea....a fake guillotine set up in the financial district just to remind of these days.
  • kaccioto

    Posts: 284

    Mar 16, 2009 8:13 PM GMT
    oh you mean after he gave 'em additional $30billion this month. i wonder who's doing his PR..probly same as AIG's guy..damn double commission for him.
  • styrgan

    Posts: 2017

    Mar 16, 2009 8:26 PM GMT
    SurrealLife said

    Until we know the details of the contractual obligations with AIG staff it is hard to say "yes roll them back".

    Based on my experience, performance contracts are drawn up at the beginning of a fiscal year with clear deliverables. If the staff met these deliverables then it is hard to reverse them. Perhaps the AIG staff who received the bonuses will turn them back (not that likely).


    So contracts don't mean anything if you are a UAW worker or a police officer for the city. Contracts like mortgages that never had a real chance of ever being paid have been thrown in the crapper. But if you're an AIG exec, your bonus is safe?

    Why are there two sets of standards in this country?

    These executives are the ones who caused this problem in the first place. Which is the only reason AIG really needs to keep these people onboard. They're the only ones who understand the mechanics of the exotic products that are driving their company into bankruptcy and our economy off a cliff.

    These people should be fired for their incompetence.

    The government needs to cut through this company in a ruthless and efficient manner and stop letting AIG dick around with itself.
  • styrgan

    Posts: 2017

    Mar 16, 2009 8:53 PM GMT
    I just thought of this...

    AIG has a track record now. They were the ones with the two $40 million sales conferences. Now it's $200 million in bonuses. These are small amounts of money relative to the size of the bailout.

    But should taxpayers be subsidizing white collar bonuses in the name of retention when white collar workers are desperate to find work right now? It is pure dishonesty to reference retention and competition over human resources when every large financial institution is laying off thousands of employees.

    If AIG is so committed to retaining a particular type of "talent," they can repay the government back at a rate that does not constitute a "rescue" but would be more equivalent to an unsecured loan.

    I can't believe I'm starting to sound like Lou Dobbs... ewwww.
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    Mar 16, 2009 9:03 PM GMT
    It also crosses my eyes when they say they have to pay these bonuses to retain this talent. What talent? These are the idiots that caused this. Why would you want to retain them?

    These people are living in the ego-sphere, totally divorced from reality.
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    Mar 16, 2009 9:06 PM GMT
    houstonmuscle10 saidYou and the rest of us that play(ed) by the rules are mad as hell. And while the politicos are at it, they should start by looking at their own house. For years there has been and still is outrageous misuse and waste of taxpayer money. Whoever is free of guilt throw the first stone!


    I could not agree more with this statement. Brilliantly said!! I think it is time that we clean house all the way around and put a halt to this culture of corrupt irresponsibility be it in Government or the Private Sector. Maybe we should start by term limiting everyone except the Supreme Court to two successive terms, one time only and then get them out of there. (None of that two successive terms, sit out one and run again - sorry Charlie). This would minimize the lobbyists effect to some degree and would go a long way to breaking the cycle of corruption. While we're at it, we cut pay for Senators and Congressmen and put them on, say $20.00 per hour worked. Then we'd get people who understand what the rest of us go through and who want the job to do something rather than BE something.

    I don't want to hear any arguments over "we need experience in DC" either. Look at this mess we're in and then look at what this so-called "experience" has bought us. The answers to our problems as a Nation do not lie with a bunch of corrupt elitists in a distant Capitol who are so far removed from daily life that they can't relate to anyone except each other - the answers lie within "We the People".

    If we want accountability and transparency and responsible behavior, then dammit we need to do something about it. DC works for US, not the other way around. If they don't do their jobs any better than AIG, then we need to fire them just like those incompetent bozos (my apologies to the clown by the same name who actually DID contribute something) at AIG richly deserve.
  • GQjock

    Posts: 11649

    Mar 16, 2009 10:27 PM GMT
    The problem isn't really these bonuses
    Yes they are outrageous and yes if we can they should be ripped right out of their greedy little hands
    we're only talking millions here
    The problem is that we tax payers paid out BILLIONS and BILLIONS of dollars to the same people who caused this mess
    and we are paying 100 Cents on the dollar
    If we are paying someone off and we hold the purse strings
    we have better bargaining power than that .... there is no way they should be getting 100% reimbursement
  • Menergy_1

    Posts: 737

    Mar 16, 2009 10:41 PM GMT
    Here's a link to an article showing the bailout money is mostly going through AIG (an insurance company after all) to banks with claims to cover the banks losses.

    Posted by a guy in the mortgage industry who I believe has a pretty clear view of what has happened/is happening. the bonuses, while repulsive, are a pittance in relation to the billions in the payments out to banks.

    http://www.reuters.com/article/marketsNews/idINN1548123620090316?rpc=44
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    Mar 16, 2009 10:44 PM GMT
    styrgan saidAs an employee, when your company is losing $60 billion dollars in a quarter and on the verge of bankruptcy, your "bonus" is that you got to keep your job.

    Stop being rational. God knows the execs aren't.
  • styrgan

    Posts: 2017

    Mar 16, 2009 11:40 PM GMT
    AbFab1 saidHere's a link to an article showing the bailout money is mostly going through AIG (an insurance company after all) to banks with claims to cover the banks losses.

    Posted by a guy in the mortgage industry who I believe has a pretty clear view of what has happened/is happening. the bonuses, while repulsive, are a pittance in relation to the billions in the payments out to banks.

    http://www.reuters.com/article/marketsNews/idINN1548123620090316?rpc=44


    As someone who is in the lending industry, you should understand the distinction between "bailout money" and "insurance money." The banks get a combination of both, depending on how they were specifically impacted by this crisis. Brokerage houses recieve insurance money from AIG because of derivatives issued by AIG to protect the banks from valuation changes in underlying assets. This is not the bailout money that was put forward by the federal government or the FDIC.

    Furthermore, the idea that we shouldn't worry about it because it's "only" $40 million or "only" $173 million begs the question, "How much money does it take before it becomes abusive to the taxpayer?"

    I doubt your position on earmarks is the same despite the fact that they are such a small part of the government's budget. (You are a Republican, right?)

  • t0theheights

    Posts: 428

    Mar 17, 2009 12:00 AM GMT
    Cheers to Styrgan! The republicans show themselves again to be a party of greedy, heartless hypocrites: They scream bloody murder at the sight of "earmarks," which constitute a downright trivial portion of the federal budget, yet have no problem with giving ludicrous bonuses to incompetent financial execs. As always, repubs oppose spending money on things that actually matter--like repairing bridges, rebuilding schools, or keeping those who were hit hardest by the recession the GOP caused from losing their homes. But they have no problem fueling corporate greed and lining the pockets of millionaires. What a party of insanity and corruption!
  • Menergy_1

    Posts: 737

    Mar 17, 2009 12:06 AM GMT

    styrgan said:
    "As someone who is in the lending industry, you should understand the distinction between "bailout money" and "insurance money." The banks get a combination of both, depending on how they were specifically impacted by this crisis. Brokerage houses recieve insurance money from AIG because of derivatives issued by AIG to protect the banks from valuation changes in underlying assets. This is not the bailout money that was put forward by the federal government or the FDIC.

    Furthermore, the idea that we shouldn't worry about it because it's "only" $40 million or "only" $173 million begs the question, "How much money does it take before it becomes abusive to the taxpayer?"

    I doubt your position on earmarks is the same despite the fact that they are such a small part of the government's budget. (You are a Republican, right?) "



    moi? Republican -- heheh not really

    I said the bonuses are repulsive, didn't I? I passed along an explanation from someone also in the industry which seemed to present information I thought was contrary to popular sentiment -- maybe it's erroneous; are you saying it is? If so, I can share the correct information back to him so he's aware of it.

    And I don't really think it's "excusable" just because it's a fraction of the overall bailout amounts - it did seem small by comparison with the money meant for the actual survival of the banks -- but then, again, I really don't have any knowledge of the banking/insurance/FDIC/executive salaries and bonuses or responsibilities.

    There is that small matter of legal contracts, though. Unless AIG went into bankruptcy/restructuring, as was suggested for the Big 3 car companies, and contracts could be renegotiated, it seems that the past binding contracts stand - or big expensive lawsuits against AIG would ensue -- and that would use bailout money to fight(?) and not go for relief. Maybe I'm wrong here, too, and welcome correct information. What DOES the bailout money go for to AIG and the banks, then? Enlighten us/me, please.

    Re: Earmarks....well I think there's some good critical articles about the (Republican) media overreaction to the amount of earmarks (whether inserted by Democratic or Republican enthusiasts and vested interests) compared to the trillions in the overall economic package.

    link: http://mediamatters.org/items/200903130027?f=h_latest

    And if I were in charge there wouldn't be any pork or earmarks in such emergency bills -- but I guess that would have taken weeks and maybe months of wrangling in Congress and by the Administration to clean out (if possible) before the financial relief was moving along to reality.

    Any ideas how to change that process?

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    Mar 17, 2009 12:06 AM GMT
    Well, looks like New York State attorney general just set himself to become governor. Today he subpoenaed information related to bonuses to be paid vis-a-vie contracts. Governor Patterson has become wildly unpopular after his budget proposals and dropping the ball on appointing a senator to replace Clinton. Instead of capitalizing on the AIG event by urging that info to be subpoenaed he just sat on his hands.

    My governor is not very politically astute. Congrats Governor Cuomo.