First of all, we do not live in a democracy. We vote for people to represent our best interests. They’re not hired guns.
The contract was entered into in order to get the job done. It was done with full congressional transparency and specifically protected by legislation toward that goal. Instead of backing up and explaining a good decision it was turned into class envy political fodder by Obama. This poisoned environment put politicians from both parties into spin mode. This is behavior I would expect from Castro or Chavez, not the President of the United States. Not only has Obama endangered the lives of AIG executives and their families he has torpedoed every other bailout endeavor. He has guaranteed that good talent will walk away.
So, you think that if the president had said “No, really, we rich politicians are perfectly okay with the rich AIG executives funnelling the bailout money we collected from you poor people into their own pockets. In fact we knew about it when we wrote the bailout and are perfectly happy with this state of affairs”, that the average underpaid fellow would say “Oh, okay I wasn’t aware that these guys need millions of dollars to be convinced to keep working, and that they really deserve our money much more than we ourselves do. Thanks for explaining!”
I’m sure you’re right. Why, before Obama turned this into a class war, everybody was quite happy with AIG and was wishing openly that even more of the public money would go to bonuses for them, to thank them and the entire financial industry for the wonderful state of the economy.
Not sure if this has been pointed out yet, but he was OK with that. In fact, his adminsitration specifically called for an exemption for the bonus money because they were worried about getting sued.
$250K is not totally arbitrary - it is the point above which people don’t get a tax cut. But I would have rather seen the cutoff be on the person’s income, not the family’s, since what a spouse makes should be immaterial in this case.
Yes, and then when the public found out about it, they gave subtle hints that they weren’t satisfied with the situation.
The question here is, if Obama and the democrats (and half the republicans) had chosen to rally against the american public on the matter, what would the likely reaction and consequences be? Presumably some here think that Obama “endangered the lives of AIG executives and their families” by not doing so; I’m wondering if they seriously believe that the Government cheerily saying that the AIG employees were special people who get more things than everybody else would have really made the populace less mad at them.
After these genius derivative traders brought the economy down in flames, this “keeping good talent” bullshit just doesn’t wash anymore. Somehow I am convinced there may be, just might be, one or two unemployed derivatives traders out there who would be willing to do the same job for much less money.
I work in software development, and more than one time I’ve been in a project where there is one “hero programmer” who produces huge amounts of code in a short amount of time, he’s the only one who understands it, and he ends up being the go-to guy for everything. Management acts as if he’s indispensable because he’s saved a couple of critical deadlines. But in the long view, the more time he spends there, the more of a liability he becomes because everything depends on him. The sooner you boot out these prima-donnas and replace them with team players, the better.
You certainly are going to be sorry, along with everyone else, when AIG folds because it can’t offer the competitive pay they need to be able to provide in order to retain the intelligent and capable workers it needs to get out of the mess it’s in.
Congratulations, your mindset has now resulted in ~$150 billion going to complete waste in the name of moral outrage. :rolleyes:
The last thing they need is more incompetent greedheads. It’s the people attracted by that “big pay for executives regardless of performance” corporate model who screwed the company and to a large degree the economy up in the first place.
The bonuses were set in March 2008. They were set at the same level as in 2007. Was AIG in bad shape back then so that they needed to pay to keep people?
Do you think retention bonuses begin when a company is in trouble? Or are they a nice excuse to give them that have even more. Before the crash the absurdly high levels of bonuses for financial people was well known, but it was assumed that they were creating real value, so there was at least some justification for it. When it turned out that they were not creating value, but only a house of cards, the justification kind of vanishes. There is now a lot of talk of clawbacks - keeping bonuses in escrow, to be paid only if it turns out the results are valid. There have been plenty of cases of CEOs and CFOs misstating results, getting whoppers, and then getting fired when the problem is discovered, but never having to give back the money earned based on their lies.
The problem here is not intentional deceit, but the principle that rewards should be based on real value remains.
In the real world, out here in the Valley anyway, companies going through hard times do cut bonuses. People do leave, and some people do stay. The computer business staggers on even with this impossible restriction on retention.
True, but millions who have done nothing wrong have lost bonuses at best and jobs thanks to this mess. Is it asking too much of those at ground zero (and I’m using that term properly) to not get giant bonuses. People lose out all the time even when their company doesn’t go bankrupt - and even when their senior managers get big bonuses for firing them.
Equally bad is the entitlement of our monied classes, especially in the financial sector, who seem to have lost track of the real impact of their activities. People are going to lose their jobs due to industry shifts, sure. That’s part of capitalism. But losing ones job because this asshole company did absolutely brain dead policy writing is another - and it is worst when you hear employees of the very division that did it demand the same pay as when they were supposedly doing a great job.
BTW, they know damn well they aren’t getting another cent of bonus money, no matter what happens to this round. How’s that going to work for retention? Even if they got the money, anyone who can walk would to a place where they could get a bonus. So, to keep people, this is a total waste. Or do you think they deserve bonuses as far as the eye can see for their excellent work and AIG’s excellent profitability?
I think if the President had pointed out that the people who caused this problem were gone and that we needed to fix it then the news story would be about how the problem was caused in the first place.
Obama should have pointed out the Robert Willumstad, who replaced Martin Sullivan, turned down $22 million in severance pay (Sullivan got $28 million plus consulting fees). It was Maurice Greenberg who caused the problems with Credit default swaps and he’s long gone. The people getting paid for their success are getting a lot less than the people who got paid for failure.
The President shouldn’t react to an angry crowd as if he was Judge Roy Bean handing out justice.
So…the plan is to attract competent employees…by offering less pay than other companies? :dubious:
Too bad most of the people we’re talking about here are not executives, and are the people currently working to fix the problems caused by the people you’re talking about.
The genius derivative traders are gone. That part is over.
The people who received the bonuses were paid for meeting specific short term goals so your analogy of long term indispensability is wrong. If you had a year-long project and half the programmers walked away the project would fail.
Yes, they represent our interests. Right now, they are representing mine, and quite a few others.
And just today I was reading about how the administration was trying to backpedal in the face of public pressure, when really, they orchestrated it that way! How devious of them.
Oh well in that case they should double their bonuses. What was I thinking?
Mr. Tribe’s “sufficiently broad” caveat could cover a multitude of sins. The patently obvious intent of the law to obtain the exec’s bonuses would make any judge scrutinize the law with some serious attention. I still think it’s a no go. An OBVIOUS no go. If this isn’t a bill of attainder, nothing is.
The people who got bonuses raised over a trillion dollars. What exactly are your interests?
I don’t think it was a well thought out venture. Kinda like wasting a day and $400,000 of taxpayer money flying out to LAX to insult the mentally handicapped. He had to backpedal on that too which has to be tough with one foot in his mouth. You would think someone trying to deal with an economic crisis had better things to do with his time (and our money).
President Obama still doesn’t have a full staff of people under Geitner who is the person dealing with this. Taxing away the wages of the people hired to fix the problem is one whopping bridge to burn down. In the case of AIG, they still have 1.7 trillion of assets to liquidate. The people getting screwed should donate their bonuses for a tax credit and walk away.
See, this is where it gets ridiculous. As has been pointed out, cutting down the income of 10% of AIG doesn’t represent the interests of the people; you don’t destabilize a company that you just poured $170bil into! Congress is representing its constituents’ anger (well, deflecting it, anyway.) That’s not really what I would think of as good governance.