The unions were asked to renegotiate their contracts going forward, not to return money they’d already earned and been paid.
No one is disputing the idea that going forward, bonuses will be drastically different for the AIG folks. And no one is suggesting that union members give back any money they’ve already been paid. OK?
More to the point, there’s right and there’s legal. This seems to be an intersection where the two meet, and what should prevail is what’s right, as opposed to what’s legal. As a taxpayer, I did not make the agreement with AIG employees, but I’m the one paying, aren’t I? I say, and we should all say NO!
The bottom line is that AIG has failed already, we’re just padding the landing so the richest 1% of the company can land softly while the rest of the employees as well as the taxpayers corkscrew into the ground, throttle forward and stick to the boards. I respect and believe however in the position Bricker takes, but I believe we are well and truly past the point of saving AIG, rather, like Ma Bell in the 70’s and 80’s we ought to bust it up into smaller companies and either sell or support them, but when you funnel billions upon billions into a great gaping maw of greed such as AIG and trust THEM to use the money wisely, well, I have a hard time with that, given the fact they’ve done such a poor job so far.
Yeah but, there’s a very fine line here, a critical distinction between giving back and going forward to be sure, but to someone who’s money you’re taking to support the ones who are taking your money, the lines can blur for some.
Frankly, AIG would probably still find a way to shovel bonus money if they could. They have proven themselves completely without honor and completely without the ability to instill trust. If they were more transparent about to whom and how the money would be spent, I think they’d come off a little better in the eyes of the everyman.
The key thing then, is the forward part. There are probably a lot of bonuses that were keyed to individual performance, and people at various levels did make those goals. As one poster said, they’ll be rightly upset if they lose the bonuses they earned. A middle manager or any other empoloyee, who did outstanding work or extra work, should be rewarded. It wasn’t his fault the whole thing floundered. (*)
In the future, bonuses for top execs should be tied to performance. How you measure that needs to be decided in a way that both “sides” would be willing to sign up to it.
(*) I still contend that the highest level people should feel some responsibility for the problems that resulted from their policies and direction.
For me the question is, why were certain politicians so adamant about contract renegotiations for the auto industry before giving bailout money, but AIG didn’t get the same provisos. The answer to me is pretty obvious, some folks hate unions and saw it as an opportunity to kill them.
A lot of people in this thread are demanding that, but I’d like to hear it from someone at AIG.
I think I can translate it for you:
Blah blah blah status quo blah blah greed is good blah
Amen. And I like your so big and no bigger w/o regs approach as well. AND I want to see exec salary tied to company performance and more in line with, well, reality, really. Exec pay has been covered by the media in recent years. If I know about the disparity, it must have been covered well–I do not read financial stuff as a matter of course.
I wish more people paid attention to history. It was unfettered capitalism that gave us child labor in this country (and it’s horrid in other countries, but that’s another thread), the Pullman type companies and towns (the company store etc). I’m no great fan of unions (most of them became corrupt and real obstacles to progress), but they were one of the few ways the common man could have some basic rights while working. Those rights should never be assumed to be sacrosanct. IOW, we need to remember to learn from history.
They were set to go under 4 months ago. This is going forward. They would have been in the streets and unemployment lines. Now they are once again entitled. OK
Your analogy of motorcycle helmets is a huge miss, If a guy on a bike cracked his head and it killed thousands of innocent people ,it might fit.The harm they did went far beyond their own selves.
You must have missed the part about where society is forced to pay for the injuries of the motorcyclist, which would not have happened if he wore his helmet. Sure it is not as big, but the principle is the same.
And thinking of things that are the same, here is another instance of the same problem. I believe I’ve read of suits by the owners of mortgage backed securities to force banks to not renegotiate the mortgages they are based on, since this will reduce the return on the securities. Writing them off after a foreclosure must be better. Now, I believe the proposed housing package allows a bankruptcy judge to change the terms of the mortgage, right, and as in other bankruptcies creditors have to deal with it. Is it possible to have a law (that is constitutional) to change the terms without bankruptcy, and keep even the owner of a tiny piece of a mortgage from screwing up the deal? The similarity is that in both cases the government is modifying a previously existing contract.
Can anyone tell me just what strategy President Obama’s team might be thinking they can employ to “block” these payouts? Short of just doing it, I mean?
I really find it hard to believe that nobody saw this coming. Then again, if they had during the run-up to the initial bailout, could they have forcibly negotiated these bonuses out of the deal? Presumably yes, since they were saving AIG’s bacon, but if that’s the case, can they still do so now? The bonuses were no less contractually obligated during the bailout period than they are now, I believe, but it seems like the government could have done something about them before they disbursed bailout money. Am I wrong about that? About everything, perhaps?
I’m just guessing here, but I think my joke above is largely accurate: it didn’t occur to anybody to forbid this sort of thing because it never occurred to them that anyone might have the solid brass cojones del chutzpah to try it. That’s all, just didn’t think of it.
Stop me if you’ve heard this one before, but surely they’re not that dunderheaded. It doesn’t strike me as that outside the box to have considered just what legal obligations AIG was subject to.
Billion-with-a-capital-“B”, actually. Although it wasn’t 64 billion, it was “only” 61.7 billion.
Replies to gonzomax only encourage him to post more. That is a bad thing.
I believe that the basic argument being made is that AIG has verious contracts with other financial institutions, mostly derivatives, that say that if AIG starts defaulting on some obligations, the holders of the derivatives can call in their chips.
You’ve probably held a debt like this through a credit card (and probably didn’t even know it, because they don’t like to mention it to you.) A lot of credit cards have language like this, whereby if you fall behind on ANY DEBT AT ALL, the credit card company can jack up your interest rate or, theoretically, cancel the card. It doesn’t have to be the debt you owe them, or even any sort of traditional financial instrument; if, say, you fail to pay a gas bill on time, MBNA can screw you. No, really, I’m not kidding; credit card companies put that shit into the cardholder agreements.
Now, I stress that it’s all probably bullshit (as explained later on in your own cite) but that’s the argument. It’s just a stretchy excuse.
Your stepson is absolutely over his head in debts that range from a few dollars to her dry cleaners to a storage house to child support to alimony to his cleaning lady to… well, you name it, he owes 'em. He’s a chronic gambler and drug addict who’s proven that he cannot be trusted with money. He owes millions between his mortgages and car loans, is in foreclosure on three houses (all mortgaged to the hilt), has almost no unencumbered assets, has three ex-wives and five kids he owes money too, etc.
You’re rich and in a position to help him- not without feeling a pinch yourself, but you do it. You give him $25000 up front and co-sign a loan with him for $150,000 more. Stupidly you pretty much let him have the credit line without a lot of preconditions, so your son pays $165 to his personal trainer for his last two sessions- neither of which he actually went to- because that’s what he’d contracted with him for, and meanwhile his last two wives are filing for food stamps and his cleaning lady has been evicted for non-payment of her rent since she hasn’t gotten her money.
Now to me the $165 paid to a personal trainer in this analogy isn’t half as sickening as the fact that $165 is to the $175,000 amount of your bailout of your son what $165 million is to the $175 billion promised to AIG. Now if this were a real analogy, what I would have told my kid, since I’m not at all obligated to help an adult son who’s pissed away a fortune, is this:
Okay Sonny, first thing is you’re not getting a dime from me. Your creditors are- the checks will pass from my hand to theirs.
The second thing is, this is my money but these aren’t my debts, so I’ll pay who I like how much I like and I’m not under any legal responsibility to do that.
The third thing is, every penny I pay is a penny you owe me.
—Okay, your beach house is worth $900,000 you owe $1.0 million on it… looks to me like your banker just lost $100K but 90% of a debt’s better than most people are getting from you.
—Your pied-a-terre in the city is worth $1 million and you owe $1 million. Bye bye pied a terre.
—Your primary residence is worth $800,000, you have a $750,000 mortgage, and you’re $30,000 behind in the payments. Here’s the $30,000 in back payments and I’ll take over the house payment in exchange for which the house is now in my name. You live there until such time as it pleases me that you don’t. If you’re ever back on your feet again I’ll sell it back to you for 100 cents on the dollar, or if you’re not I’ll keep it.
—Nice Jaguar. It’s worth $70,000 and you owe $80,000. Hmmm. Bye bye Jaguar- Mr. Jaguar dealer, hopefully you’ve learned a lesson- btw I’ll give you $40,000 bid for it if it goes up for sale.
Okay, now for the money you owe that isn’t secured- Give me the bills for the amount you owe in child support— you owe $20,000 in child support? Okay, I’m sending your ex-wives cashier’s checks for $12,500. That’s not the full amount, but it’s a helluva lot better than nothing and you still owe them the rest.
—You owe how much in alimony? $16,000? I’ll send them checks for $4,000- when you recover you can pay them the rest, til then you owe them.
—You owe Guadalupe $3,250 for back services? And she’s still working for you? I’m going to give Guadalupe a check for $3,250.
—You owe your personal trainer $165 for two sessions you didn’t even attend?
Well then… I don’t give a damn how, if, or when he gets paid. This is my money, not yours, and I’ll decide who gets it and he is wwwwwwwaaaaaaaaaaayyyyyyyyyyy down the list.
Oh he’s threatening to sue? Okay…
Now of course if the personal trainer wants to sue you then he certainly can and he might even win, but I wager that you and me and the personal trainer and Jayne Mansfield and the Baby Jesus and the Vampire Lestat and the Trix Rabbit will all be holding hands singing Ring Around the Rosies on the 9th largest moon of Jupiter before he collects it since you ain’t got it and there’s a wwhhhhhhhooooooooooooooooooooooooooooooolllle long line of people with bigger and more pressing claims in front of him.
And of course you can say to me, ‘Pop, I want to pay off my trainer, he’s my friend, and I don’t want you telling me what to do because I’m 40 years old’, to which I say, I respect your determination. Them’s my terms, take 'em or leave 'em, and you need to start picking up aluminum cans and selling plasma because I’m calling the shots here and you’re not just getting a shitload of money dropped in your lap with me not even asking for receipts. I’m looking over your accounts and I’m deciding who gets paid with MY money and your trainer can go screw himself or you can find the $165 some other way.
Man, when you make analogies, you don’t fuck around. Bravo.
I am not sure why the number 64 was in my head, but this was a careless error; thanks for clarifying.
How are you not working for the CBO? Hell, how are you not the HEAD of the CBO?