Bonuses For AIG

[Fear_Itself]

@Rand_Rover

There aren’t 2000 people in the world qualified to do my job.

Patently false. You make good fries, but so do all the other pimply faced grill jockeys in America.

Looks like i can turn in now too.

[Voyager]

@xtisme

It’s almost as if the company had a split personality. I don’t think they ever tried to assess what the actual risks were on the non-insurance side. My guess is they made a calculation about that risk that factored in the government taking on part of that risk and that the house of cards could never collapse completely (i.e. there may be some percentage of failure, but it would ALL fail at once, and they would be covered).

-XT

I know credit default swaps weren’t sold by the insurance side of the business, but aren’t they basically insurance? With some nice qualities, of course. It’s like me being able to buy fire insurance on my neighbor’s house - especially if I happen to know he smokes in bed.

[Measure_for_Measure]

@Scylla

I believe a company should fulfill it’s contractual obligations to those employees, just as it should fulfill say, a life insurance contract, or any other written financial obligation. If there are any discretionary bonuses, I don’t think those fall into that category.

I find the idea of a special tax to reclaim those bonuses as very scary. Ex Post Facto legislation. I find the idea of this sort of blackmail the government is pulling as repugnant. Would they expect the recipient of a life insurance policy payout to refuse it? This contractual obligation is no different.

Contractual obligations go up in smoke in the course of bankruptcy. The government was forced to bail out AIG because if they didn’t the company would take the economy down with it.

Under such circumstances, I have no problem with an Ex Post Facto cram-down. As noted earlier, the US purchase of AIG happened over the weekend – there simply wasn’t time to pour over the books.

Oh and xtsme? The government owns AIG, correct? As a shareholder it has every right to blanche at management’s piss-poor decisions.

Snowboard Bo: If you respond to a request for a cite with a hearty Fuck You, you are not fighting ignorance. Why are you here? For shame.

[Snowboarder_Bo]

@Measure_for_Measure

Snowboard Bo: If you respond to a request for a cite with a hearty Fuck You, you are not fighting ignorance. Why are you here? For shame.

#1. As I stated, this isn’t GD. This is the pit.

#2. It was Rand Rover. Fuck him. He’s a piece of shit.

[Rune]

@The_Tao_s_Revenge

This is one of those few times a lynch mob would be performing a public service.

It may well come to that yet

AIG Offices patrolled by Armed Guards

A tidal wave of public outrage over bonus payments swamped American International Group yesterday. Hired guards stood watch outside the suburban Connecticut offices of AIG Financial Products, the division whose exotic derivatives brought the insurance giant to the brink of collapse last year. Inside, death threats and angry letters flooded e-mail inboxes. Irate callers lit up the phone lines. Senior managers submitted their resignations. Some employees didn’t show up at all.

“It’s a mob effect,” one senior executive said. “It’s putting people’s lives in danger.”

“It’s going to blow up,” said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. “I have a horrible, horrible, horrible feeling that this is going to end badly.”

AIG Offices patrolled by Armed Guards

• fuckhead didn’t even notice it already blew the fuck up. Here’s to ending badly. Cheers.

[Der_Trihs]

@Rand_Rover

Do you have a cite for that? Because you are wrong (at least for value of “rich” that include all millionaires).

Millionaires aren’t all that rich these days. Were you advising Dr Evil ?

And yes, upward mobility in America isn’t nearly as easy as people like you claim.

A substantial body of research finds that at least 45 percent of parents’ advantage in income is passed along to their children, and perhaps as much as 60 percent. With the higher estimate, it’s not only how much money your parents have that matters – even your great-great grandfather’s wealth might give you a noticeable edge today.

< snip >

Despite the widespread belief that the U.S. remains a more mobile society than Europe, economists and sociologists say that in recent decades the typical child starting out in poverty in continental Europe (or in Canada) has had a better chance at prosperity. Miles Corak, an economist for Canada’s national statistical agency who edited a recent Cambridge University Press book on mobility in Europe and North America, tweaked dozens of studies of the U.S., Canada and European countries to make them comparable. “The U.S. and Britain appear to stand out as the least mobile societies among the rich countries studied,” he finds.

[amarone]

@Mtgman

Just wanted to make a couple general comments. Firstly, I’m not upset about the bonuses. Some bonehead probably set a compensation structure based on how many sales people made or how many sales people under them made. Those people busted their butts, made the sales, or enabled their people to make the sales of these financial products. The system is probably set up on how they performed in selling or administrating the products, it’s not based on if the products create long-term value or not. As such they performed their jobs and deserve their compensation. Most executive positions have nominal salaries and huge bonus structures to help ensure they work their asses off. Bill Gates, just a couple years before he stopped being the active CEO of Microsoft, was paying himself about $650K in salary. Doing the math, you’ll quickly see that he’d have to live a few thousand lifetimes as Microsoft CEO in order to amass his billions if his salary was his only compensation. That’s just business as usual. I’ve been saying it needs overhaul for years, but you do that before people sign contracts for their labor, not after.

Your comments may be generally true, but using Gates as an example doesn’t work. Gates is fabulously rich because he founded Microsoft and still owns a lot of the shares. Ditto Ballmer. Both get very modest bonuses ($300 - 400k) and no stock options.

[Enderw24]

@Scylla

But let me ask, what is the difference between being less sympathetic to somebody because they are rich and being less sympathetic to somebody because they are…jewish?

But you repeated yourself.
I keed I keed because I’m Jewish.
And poor.

[Rand_Rover]

@Fear_Itself

Patently false. You make good fries, but so do all the other pimply faced grill jockeys in America.

Looks like i can turn in now too.

IOW you got nothin’.

[Rand_Rover]

@Der_Trihs

Millionaires aren’t all that rich these days. Were you advising Dr Evil ?

And yes, upward mobility in America isn’t nearly as easy as people like you claim.

I’ll read your cite when I get some more time, but does the article say those numbers control for race? If not, then it’s all just a fancy way to say that white people are richer than black people, which is a somehwat separate question from the general issue of upward mobility.

[tagos]

@Rand_Rover

I’ll read your cite when I get some more time, but does the article say those numbers control for race? If not, then it’s all just a fancy way to say that white people are richer than black people, which is a somehwat separate question from the general issue of upward mobility.

Why the fuck should it control for race? Unless you think there’s something inherently inferior about one race compared to another that is.

[Maeglin]

@Rand_Rover

I’ll read your cite when I get some more time, but does the article say those numbers control for race? If not, then it’s all just a fancy way to say that white people are richer than black people, which is a somehwat separate question from the general issue of upward mobility.

Race explains some of the variance.

In the U.S., race appears to be a significant reason that children’s economic success resembles their parents’. From 32 years of data on 6,273 families recorded by the University of Michigan’s long-running survey, American University economist Tom Hertz calculates that 17 percent of whites born to the bottom 10 percent of families ranked by income remained there as adults, but 42 percent of the blacks did. Perhaps as a consequence, public-opinion surveys find African-Americans more likely to favor government redistribution programs than whites.

This is far more interesting, though.

The notion that the offspring of smart, successful people are also smart and successful is appealing, and there is a link between parent and child IQ scores. But most research finds IQ isn’t a very big factor in predicting economic success.

[Sitnam]

The argument for the bonuses from the business sector is if we don’t give bonuses the talent will leave and we will face an even greater economic downturn.

Fuck them, that’s blackmail.

As a tax payer I own 80% of AIG, if it costs me an extra 100 billion to fire the fuckers that were irresponsible enough to sink the company it will be worth it, for communal catharsis alone.

Not only that, but any company hiring said fired fuck ups will not be allowed to do business with the US government.

[eleanorigby]

I find this incredibly ironic and rather funny:

“It’s going to blow up,” said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. “I have a horrible, horrible, horrible feeling that this is going to end badly.”

NOW it’s going to end badly? It already has ended badly. Hello? Reality check, Mr Senior “Financial Products Manager” (that sounds an awful lot like Cheez Wiz to me).

[Maeglin]

@Scylla

I’m in the financial industry. My company received Tarp dollars. I received a retention bonus.

I also work in the financial industry. My company took TARP funds. I am not high enough on the totem pole to get a retention bonus, but I did get an only somewhat anemic bonus and restricted stock allocation.

They could leave and earn money in an uninterrupted fashion, but the company is paying them to stay as an investment in their earning power. If you don’t pay them, they will go and the company will be further weakened in its ability do business and get out of this mess.

This is kind of the problem, though. We make a prediction of the earnings power of this supposedly top talent. But many of these predictions were completely and utterly wrong. The cash investments made in the earnings power of these individuals have yielded ambiguous returns at best. I think this aspect is what we really need to question. Our structure of incentives is designed by the same people who benefit from it, and it is obvious to see how incredibly self-serving it is. It is difficult to falsify during good times that top talent delivers top returns Everyone is making money, so eventually the person lucky enough to make slightly more than his equally intelligent and hard-working colleagues will rise a little higher.

But it is hard to justify the retention of top talent when these top talents have led people over the cliff. It does ask us to rethink fundamentally whether this prima facie rational system of incentives and rewards actually delivers the results we think it does.

[Bricker]

@Snowboarder_Bo

Tax it back. That’s the new strategy being looked at in DC.

story here

@Article I Sec. 9 U.S. Constitution

No bill of attainder or ex post facto Law shall be passed.

What’s a bill of attainder? It’s a law that legislatively determines guilt and inflicts punishment upon an identifiable individual or group without providing the protections of a judicial trial. United States v. Brown, 381 U.S. 437 (1965); United States v. Lovett, 328 U.S. 303 (1946); Ex parte Garland, 4 Wall. 333 (1867).

It’s unclear to me just what form this tax might take. But if it’s a tax that specifically targets bonuses paid by a particular company, and it’s at or near 100%, then it’s very likely to run afoul of the rule against bills of attainder, because “punishment” includes punitive confiscation of property or money, and any review of the legislative history of the bill would find plenty of evidence that it was motivated by a desire to punish AIG’s bonus recipients.

[tagos]

@Bricker

What’s a bill of attainder? It’s a law that legislatively determines guilt and inflicts punishment upon an identifiable individual or group without providing the protections of a judicial trial. United States v. Brown, 381 U.S. 437 (1965); United States v. Lovett, 328 U.S. 303 (1946); Ex parte Garland, 4 Wall. 333 (1867).

It’s unclear to me just what form this tax might take. But if it’s a tax that specifically targets bonuses paid by a particular company, and it’s at or near 100%, then it’s very likely to run afoul of the rule against bills of attainder, because “punishment” includes punitive confiscation of property or money, and any review of the legislative history of the bill would find plenty of evidence that it was motivated by a desire to punish AIG’s bonus recipients.

Yea - well let them spend their unearned millions and the next 10 years fighting it in court. I’m sure the Govt can out-lawyer them. Even if they win one hopes it will be Pyrrhic.

[elucidator]

Whaddaya wanna bet these guys are broke? Whaddaya wanna bet they figured they’d be pulling down these mega-bucks forever, and are in debt up to their eyeballs?

[tagos]

@elucidator

Whaddaya wanna bet these guys are broke? Whaddaya wanna bet they figured they’d be pulling down these mega-bucks forever, and are in debt up to their eyeballs?

I like it. Now tell me they all have syphilis.

[elucidator]

Depends on the pooch.