Anyone else really impressed by the grasp of the issues and calm under fire of Liddy at today’s hearing?
Dan - I would agree with you. Liddy is amazing in his patience, his understanding of the mood of the Congress and the people, and his ability to sit there and be calm. If I were preparing a potentially hostile witness to testify before a court or Congress, I would show them this tape.
He is defending the indefensible. He is fighting against paperwork and written contracts which show they were internally trying to keep the company bonuses away from the huge losses. He admitted that if they were not saved by taxpayer money, there would have been no bonuses. But once they got their hands on that money, they went ahead.
It is hard to defend calling them retention bonuses when many who got them left.
There’s no question of that, gonzomax. But he’s really, really good. And he’s even feeding them some meat, calling for half of the bonus to be returned, and even saying some have given all of it back." He’s not doing the abject coward thing, he’s just being cool and even.
Where does the great debate come in?
The pitchforks haven’t arrived yet and the torches are being fueled as we speak. Have patience… 
I rise against radical and extreme punishment. Though it is perfectly fair and just that his testicles be torn from the nutsack by rabid chihuahua, he cannot be forced to eat them, as he may very well have religious objections to eating human flesh and/or pork…
By the by, ThinkProgress has reported on the calm and deliberate way he shoved a hand grenade up Bernanke’s Nixon, and pulled the pin…
http://thinkprogress.org/2009/03/18/bernanke-approved-aig-bonuses/
Well…I am unclear on who is responsible for okaying the bonuses and whether that person really had their hands-tied on the matter or not.
At least in one respect I suppose we could say with regard to Liddy “the buck stops there” and he bears responsibility even if it was not his direct decision.
I saw some references that AIG was explicitly told to NOT do bonuses by some Congresscritters (sorry no cite…was half-listening to CNBC here in the office and that is what I gathered).
Told or not was AIG totally unable to avoid giving the bonuses? One critter suggested the bonuses should have been withheld and those who thought they were entitled could sue and spend three years in court sorting it out.
I think what REALLY gets me is AIG refusing to hand over details on who got what and other such matters. If the government is now 80% share holder in the company then it seems to me it has an explicit right to such information not to mention their right to conduct an inquiry to these events.
I have also seen people suggest Geithner is partially to blame…if for nothing else than not sitting on AIG enough and making them not do this.
Okay…I am rambling a bit here mostly because I am not sure where/who to direct my ire towards. I have plenty and this is just one aspect but for this thread I’ll stick to this line.
AIG is legally obligate to pay, period. Congress (particularly Chris Dodd) specifically authorized them in the bailout. They were set in contract before the bailout, and the company’s survival this long makes the payout a legal neccessity.
That was my thought before the hearing, but it seems that they were an incentive to stay through last month and help sort out the mess (that they admittedly created). If so, my issue is just the size of the bonus.
Ok…
There was the suggestion to withhold and let them sue them (which might well have resulted in a penalty added to the payments but would be years from now and this will have been sorted one way or another).
And as an aside…how the hell do they get bonuses for overseeing the largest financial collapse in corporate history? $61.7 BILLION in a quarterly loss? So it’s, “Thanks guys, awesome job on the new record…keep up the good work!”
Seriously…something is messed up. Who writes those contracts? Every job I got a bonus in it was very clearly pegged to positive performance. Pretty sure if I lost my company $100,000 much less over $60 billion they’d be showing me the door…not writing me checks.
Didn’t watch it, but just read an article and enjoyed this reported exchange:
Rep. Lynch (D. Mass) likened AIG’s practices to a ship’s officers and crew reserving the lifeboats.
Liddy: “I take offense, Sir.”
Lynch: “Well you take it rightly. Offense was intended.”
Ouch!
This made my day. I love it.
While I see the argument for paying some of the bonuses ( a gut was promised X if he delivered Y), I do think the company was better off issuing some sort of decree that NO BONUSES WILL BE PAID, for obvious reasons. If someone wants to sue, fine. If their worthy of it, they’ll finally get it. Those who failed at their jobs yet still were scheduled for bonuses, screw 'em. I think this wold have set the right tenor for what they, and we, are going through.
If he had objections to pork, he shouldn’t have accepted the bailout money. 
Hmm…seems these bonuses were a special deal and not tied to performance. It was a bonus to stay (the whole “retention” bonus thing). I guess it sounds semi reasonable but the amounts…jeez.
Actually, that would probably destroy the company. Between documents being turned over, staff being subpeona’d, and th legal issues itself, you’d be lucky if AIG then survived, which was the whole point of the bailout. And it would stil have to be paid, period.
Even thinking of it as a “retention payment”, it’s still weird.
Imagine if a nuclear plant engineer did something terribly stupid/negligent/incompetent, and he brought the nuclear plant to the brink of collapse.
If we follow the AIG example, instead of punishing this engineer in some way, the plant gives him money to stay long enough to help undo part of the damage that he himself created.
So, this guy gets to almost destroy the power plant with his incompetence, and he is rewarded with millions to stay and fix the problem he created.
This makes no sense.
As an aside, in my opinion, AIG has collapsed. It didn’t almost collapse. Without the bailout, there would be no AIG today. So, in essence, the AIG before the bailout has collapsed and what we have today is a new entity that goes by the same name.
I’m missing how that follows?
$167 million is the issue here with the bonuses. If I heard the TV right if AIG withheld them them then those people who should have gotten them could sue and the penalty, if they won, would be double that $167 million (or $334 million). This however would be in three years and the company will doubtless be sorted one way or another. If AIG fails then those guys would not get their money. If AIG becomes profitable again they could afford to pay the extra amount in three years.
And while $334 million is a lot relative to the whole company it is not so much. Hard to see that being the straw that would break the camel’s back.
Paid by whom? If the company is destroyed, who will be left to pay these amounts?
I agree with the sentiment but sadly it can make sense.
While the nuclear plant operator deserves to be dropped in the nearest toxic waste pit if that is the only guy who can undo the mess he created then you actually need the bastard. Sucks but there it is and seems to be the case here.
Presumably others could have done the same but how much damage would be done while the new guys tried to just get a handle on what’s what much less start fixing it?
The appalling part here is the guys who made the mess get MORE money to start to undo the mess and will walk away free, rich men for collapsing a corporate giant not to mention the world economy. It’s really fucked up.