“witch hunt” has really inflated in value if it has come to mean depriving some rich banker guy of another million dollar payout. Used to be about burning people at the cross and such lovely stuff - and removing dicks of men still alive. Which I should assume is a lot more uncomfortable than having to forego another Porsche.
First Deutsche Bank got US bailout money and then they poach the most talented employees. Good for them. The clever always cheat the less clever (=US taxpayers). Perhaps Deutsche Bank is using the very money it got from US taxpayers to pay for hiring these people.
in any case, as has already been posted in this thread, a lot of those receiving bonuses aren’t even with AIG anymore. Including “Eleven of the individuals who received “retention” bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million”. Fat good it is going to do for AIG retaining their talented people, by throwing bonuses at people working in other companies. And a lot of the rest receiving bonuses worked in the very sections of AIG that brought such astronomic losses that it ruined the company. If that is talent, then God protect us from talented people.
I suppose it is constitutional.
But is it wise?:smack:
This gives me the “You might be next” willies. :dubious:
I think this knee-jerk emotional , and more importantly, political response will fall into the** unintentional consequences** category of future regrets.
I also would like less attention paid to this small group of rapacious plunderers/innocent victims in their communion dresses, whichever. What needs attention is how closely the interests of financial institutions have become intertwined with the interests of the nation. As a lifelong lefty, been railing about this for quite some time.
If our interests and theirs are not intimately connected, then they can thrash about and fail, and the rest of us can toddle along quite well without them. In that instance, strict and intrusive regulation is not necessary, in that instance, the market can police itself with Darwinistic principles of a ruthless struggle for survival. And mazel tov, much good may it do them.
But if any institution is “too big to fail”, then all bets are off, this simply does not apply. If the health and well-being of these entities can reflect with dire consequence on our own well-being, then we have every right…nay, duty!..to stick our regulatory noses up any orifice we please.
Seems with the decades long dominance of the right, we have achieved the worst of both worlds: a financial sector that is far, far too cozy with our governance, is permitted if not encouraged to grow out of any sane proportion, and must be saved by us if it fails. All the downsides of socialism, none of the benefit, all of the risk of capitalism, none of the security.
Gotta agree with that - I’ve had quite enough of top management saying their huge salaries and bonuses are because of the risks they assume when they aren’t assuming any. Where’s the entrepreneurial capitalism there?
It’s been no more tolerable to hear them and their apologists speak of their being the productive ones, that any success their companies have had is solely because of their hard labor, and implicitly dismissing anything the thousands of others in the company do or contribute. It’s easier to stiff them if you can make yourself see them that way, naturally.
Let’s hope that this pathological culture of this latest Gilded Age is being cured, that the strategy of privatizing gains while socializing losses, of misallocating responsibility and rewards, of seeing fellow human beings as “externalities”, is coming to a close. It was pretty damn painful the last time we had to do it, though.
Well, in the interest of fighting micro-ignorance, we live in a representative democracy as opposed to a direct democracy. What these yahoos want is mobocracy.
Yeah, working for another company because it pays better is sure greedy. I can’t believe anyone would commit such an immoral act, when these people committed the clear sin of working for companies that received bailout money and getting paid well. :rolleyes:
Hear, hear. But, sadly, that’s a nuanced and controversial problem that’ll never get airtime on CNN…
Interesting claim, Sam, that Europe’s banks are going to be better plays for compensation than America’s banks and that Deutsche Bank and that group will “pick off” the best talent. Interesting in context of the press compensation of banker has had in the EU
These are the people who failed and the mood there is no different than it is here.
But hey, Barclay’s and Deutsche didn’t get bail-out monies, so those banks may be willing to thumb their noses at the stockholders’ moods. Right? Seems to be a “no.”
Nah. These highly compensated workers really don’t have too many great options.
The better bet is to fight this legally (I understand there is a constitutional argument) or better yet to weather it out by just giving it back and get better compensation again after the public has moved along in a year or two, just by having the contract written as salary rather than “bonus” … but still overpaid for what they do.
Raking in huge amounts of money even as you ruin the company you work for IS greedy. And grabbing money given to save the company to line your own pockets is ALSO greedy.
And if their company needs bailout money, they SHOULDN’T be paid extravagantly. They are not “getting paid well” - they are being paid extravagantly; that’s what we are talking about. That money is to keep the company alive so their collapse doesn’t wreck the economy further, not to pay for their third gold bathtub.
These few are the nails that are sticking out the most obviously and an angry public with a bunch of hammers could indeed end up doing more harm than good in their desire to give them a good pounding. To not have handled these bonuses better knowing that this has been the public’s mood was just stupid, even if it was somehow “logical”, but … Will the public still have any interest left to actually notice that the whole compensation structure has some screws loose and actually follow through in fixing it for the long haul? I wouldn’t get our hopes up.
It was a special house vote and required a 2/3 rds majority to pass. The vote was 328-93. Are there only 93 repubs in the house now? They had the numbers to easily vote it down. They did not. Those dems ,those bad bad dems.
I actually didn’t refute that part of it. I refuted the part that says that unless you pay big bonuses, even when you are losing money like crazy, everyone will leave and doom will ensue.
But I can refute it. First, clearly everyone getting bonuses was around before this thing went south. It is true that the CEO is gone. But what about the other people.
We wouldn’t expect clerks and secretaries and newbies to be able to do anything about a problem, but they aren’t making a ton of money, so they keep their bonuses, which is only fair. As for the rest, if you are making, say $200K before bonuses, you should damn well know enough to know when something stinks, and you should speak up if you do. I don’t make that kind of money, but I am senior enough so that if my company was screwing the pooch I’d say something. I might or might not get listened to, but I’d speak up. If none of these geniuses spoke up, they either couldn’t figure out that they were doing something wrong, in which case they don’t deserve their big checks, or they were complicit in the bad policy, in which case they also don’t deserve their big checks.
The bankers might want to be less mad at Congress and more mad at a company that sold them insurance that they can’t afford to make good on. It might be a bit unfortunate that they got caught too, but if AIG people hadn’t been so greedy this wouldn’t have happened. Remember, Merrill pulled the same shit.
It appears that the Fed and Treasury and the Congress are all working on a new regulatory structure, but I’m glad they’re not rushing it. The bonuses are a symptom of two things: first, the gap between the rich and everyone else, which has been pissing people off from before the crash, and second, the spreadsheet fantasy land the investment bankers are living in, which involved the invention of ever more arcane instruments which gave good returns because of the underlying risk, risk either lied about thanks to the rating agencies or swept under the 1% probability carpet of their risk models. Taxing the bonuses isn’t going to fix any of that, but not doing it will likely mean the banks and AIG get no more money, which I’m afraid they are going to need. I wonder if those getting the bonuses think that their being on the street like the people at Lehmann is a better outcome than keeping their jobs and losing their bonuses.
You’re really so worried about that 0.1% that you’re in favour of the government making a massive power grab, sabotaging the whole bailout, and egging on an ignorant mob all at the same time? And people say libertarians are penny-pinchers. :rolleyes:
I disagree. The pricing and actuarial details behind products as complicated as the toxic ones AIG created are mind-numbingly complex. How to hedge, reserve, account, etc.–these would not necessarily have come together in some obvious “this is toxically risky” package. I’ve worked in the financial services industry for about 25 years, and the days of vanilla whole life driving the industry are long gone. I’ve seen products at other firms WAY less complicated that were as far from intuitive as you can imagine.
And their forecasts and modeling, also to the short-sightedness of those at the top, may have been way too optimistic, not accounting for the type of low-end, market dropping off a cliff scenario that occurred. I think there were senior people at AIG who were the champions of the strategy who were aware of the total risk, but rolled the dice anyway. As Sam points out, I’ve read in several places (don’t have a cite handy at the moment, so feel free to disregard as you see fit) that these guys are long gone. But it’s also absolutely plausible to me that the key staff who remain have critical expertise, and their actual knowledge of the grave risk that was taken, while it was taken, ranged from “none at all” to a vague “I hope those guys know what they’re doing.”
What makes you think it’s “1%” ? What makes you think that if no stink had been raised they wouldn’t have just shoved more and more of the bailout into their own bank accounts and let AIG burn ?
And it’s not a “power grab” for the government to demand accountability for it’s money, any more than it would be if some company had bought out AIG. If they don’t want the government to meddle, then they shouldn’t take the government’s money. The government has a right to take an interest in how the money it hands out is spent.
Given how people freak out about the merest possibility of someone on welfare possibly getting money “they don’t deserve”, it’s disgusting to see people defend the right of these incompetent parasites to guzzle far more money, after having done far more harm.
Oh; and AFAIKT most people don’t think that libertarians are penny pinchers. They think libertarians are sociopaths, or just fools.
It’s not, it’s 1/10th of 1%. 165,000,000 (the bonuses that the government is going after) divided by 170,000,000,000 (the entire bailout) is equal to approximately 0.1%.
Because they aren’t shoving more money into their own bank accounts, they’re trying to pay bonuses that were already required by legally binding contracts, which they were specifically allowed to do under the terms of the TARP. It’s the government, not AIG, which is trying to change things after the fact.
How are they supposed to make an informed decision whether or not to accept the government’s money when the government has decided that they can change the rules whenever they feel like it?
You don’t seem to understand that there is a time to change the terms of an agreement, and that is before both sides have committed themselves to that agreement. If the government didn’t want people at AIG to get paid these bonuses, they should have said so, instead of explicitly stating that these payments were not prohibited and then going back on their word.
There are two choices here: to prop up the failing corporations (with rules defined beforehand), or to let them die. The third option, the one the government is taking, combines the worst attributes of both, by giving them the money and then sabotaging the possibility of getting that money back.
Why should the probability of getting the bailout money back depend on the bonus tax?
Do you think AIG customers won’t deal with people who are required to pay a special tax?
AIG’s reputation was already trashed, everybody knows they were practically bankrupt, they had a bad business model, but they are now backed by the government, which needs to protect its investment and has deemed them too big to fail.
Those are the facts that should concern AIG customers, not what their sales rep is earning, and I bet those rational capitalists will do exactly that.
Because you need people to be willing to work for AIG if you want a return. But when working at AIG means you don’t have job security, you don’t get paid what you were promised, the government is using you as a scapegoat for your predecessor’s actions, and people are threatening to kill you, people aren’t going to be willing.