AIG Fucking Pricks
We do. It’s called the bankruptcy code. Anything they get that they wouldn’t under bankruptcy is a windfall.
Perhaps you’re not aware that, down here, bankruptcy wipes out investors entirely. The only “plan” an investor has available to address that is to bail out ASAP.
Nobody is forcing any of them to take the gifts. That’s what they are, you know.
No, I guess you don’t know. Nobody would invest in a company that was going bankrupt, if they knew or plausibly suspected it was. Any value the stock still has is similarly a gift from the taxpayers.
The ones whose utter incompetency destroyed it? The company is better off without them.
It seems so, somehow.
It’s not hard to understand, unless of course the people we’re talking about had nothing to do with it. I’m amazed at the assumptions in this thread - that the people receiving bonuses are ‘pricks’ who deserve what they get, that they are the ones responsible for running their company into the ground. What, all 2,000-7,000 of them? Every one of these people is a prick who deserves what he gets? This class warfare stuff is getting awfully heated.
I work for a company that, if things get much worse, could ask for a bailout. It wouldn’t have anything to do with me - I wouldn’t want one, and my work has contributed plenty to the company’s bottom line. Does that mean I’m a fair target for the next politician who wants to grandstand on an issue? Does rule of law mean nothing any more? So long as the people affected are rich, and therefore pricks, it’s time to get the pitchforks and tar?
By the way, it seems that the administration is using AIG as a way to hide other bailouts. For example, 13 billion of AIG’s money went straight to paying off debt to Goldman Sachs - an action the treasury apparently approved a long time ago. Had AIG gone into Chapter 11, Goldman would have to line up with the other creditors - and probably seek a bailout of its own. But now Goldman Sachs benefits from AIGs bailout, but THEIR bonuses are intact. Does that seem fair to everyone?
This whole thing is rapidly becoming a complete cluster F&*k. And the Obama administration deserves a good part of the blame. They knew of the executive compensation plan long ago, and are now feigning ignorance. Chris Dodd or someone on his staff wrote the explicit exemption for AIG’s bonuses, and is now trying to weasel out of it. The Obama administration fanned the populist flames by engaging in the same demagoguery as the Congress, shooting their own program in the foot. Geithner has been completely incompetent to date. In the midst of the difficulty he’s having filling staff positions, one of the few people he has gets hung out to dry by the administration and Congress for just doing what he was told to do.
The incompetence on display is breathtaking. Even people like Robert Reich are complaining.
A perfectly legal but distasteful fix to a perfectly legal but distasteful problem, it evens out in the end.
So Franklin Raines will be giving back the $50 million bonus he got? Nope.
The tax increase in the bill would be applied to bonuses paid after December 31, 2008.
ROTFLMAO
Are you sure about that, Chief? You might be right, but since Fannie and Freddie are GSEs, I’m not sure this will apply to them. The language I saw refers to companies that received federal bailout money. Does that apply to the GSEs? Was their bailout an official ‘bailout’? Is a ‘bailout’ even a legally recognized term? It will be very interesting to see if the language of the bill is such that they wind up excluded.
I suspect this bill won’t make it out of the Senate anyway.
Looks like Fannie and Freddie are on the hook too.
From furt’s link above:
Gosh, it’s almost as if you keep repeating it, we will suddenly see your hyperbole reified.
Third time is the charm?
Is the money from AIG a matter of paying an insurance policy?
By the way, if the AIG bailout money came under TARP (and I believe it did), then this tax would be a violation of the government’s own legislation.
Here’s the relevant section on corporate governance for companies receiving TARP money:
Note the last section. The bill explicitly protects bonuses due to contracts signed before February 11. That’s the case with these bonuses.
The Democrats wrote this bill. They voted for it. Obama signed it. AIG accepted TARP money under these conditions. To then go after these bonuses through the tax system is, at best, sleazy and underhanded. At worst, a violation of contract and subject to legal action.
Well, Sam, people want somebody to get punished and this is a way to do it. It sucks that some “innocent” people are getting caught in this net, but the fact is they all played for the same team, and this team collapse catastrophically, in a manner that harmed nearly everyone.
Personally, I think the 90% rate is too high, but this bill does provide a wonderful personal incentive to pay the government the money back: not just AIG but also BOA, Citi, etc, and not just a corporate incentive but as personal initiative. And what conservative doesn’t mind a little “personal initiative”? 
Lastly, the bill provides that this applies to all companies who receive $5 billion+ in bailout money… and, really, it should, right? Because again, I can’t imagine anybody, conservative or liberal, who wants it to be profitable for people to do such a poor job for their company that the firm has to take on government loans to stay afloat. There has to be pain somewhere for the people involved, even indirectly.
Scott Norwood flubbed the kick, and yet the whole team felt the pain. That’s how it should be with AIG.
Look, they are not prohibiting the bonuses, they are just taxing the hell oout of them. Is it a backdoor method? Yes, no one is pretending this is not related to trying to in essence reneg on the previous agreement (well some may deny it, but it isn’t true). So is it legal, at least as it pertains to the part you highlighted, I would say yes. Now is it legal overall, that is quite a bit grayer, at least until someone actually challenges it in court.
If just before the bailout the Union and GM agreed that all workers would get 20 hours of overtime paid at triple rate, and that they didn’t really have to show up for it, I would damn well demand that this money get taken away or taxed.
Sure, they can go bankrupt - but then all the swaps held by banks all over the world would become worthless, they’d all go under, and the financial system would collapse. Much better than Congress passing a tax. If they didn’t, continued and necessary bailouts would be politically impossible, and we’d be just as screwed. It’s nice to see that half the Republicans got it.
Here in Silicon Valley, practically no one is getting a bonus. HP is laying off and cutting salaries. Around here we understand that a bonus lets you share in the success of your company. It is not an entitlement. We’ve met our goals and done our jobs, and we’re getting screwed because the financial sector screwed up. We’re not asking for hundreds of billions of bucks, and we didn’t bring the economy to the point of collapse. Why should the people in the division who did it, and who make enough to have at least a little part of the responsibility, get bonuses when we don’t?
I’m glad the secretaries and the clerks are not getting affected. I trust those who are supposed to get big bonuses get them because their actions have a major impact on results. If not, they shouldn’t be getting money for showing up. If so, they deserve some of the blame.
That the bonuses were guaranteed at 2007 levels even when there was some doubt about 2008 makes it even worse.
Nah, it’s just that 85 of them didn’t get the memo that “populism” is now a bad thing - apparently they haven’t decided if they want to have a beer with AIG executives or not.
-Joe
For an article sympathetic to AIG (the people, at the very least, not necessarily the company at large), turn to the Washington Post.
Wasn’t the alternative minimum tax originally aimed at a handful of people?
I hope this one was written even more narrowly defined so we don’t have middle class people getting hit with the AIG bonus tax in 30 years.
Yeah, the tax would be on the bonuses that were paid this year. Since you pay income taxes on income after the year you received it, its not an ex post facto law. I didn’t word that well, but basically the law doesn’t come into effect until the executives pay their income taxes at the end of the year.
Fannie Mae and Freddie Mac guaranteed half the US mortgages so I don’t know how you can say they weren’t knee deep in it.
The bonuses were specifically tied to performance goals designed to fix the problem. Congress should expect any executive trying to do the same thing to walk away.
When I was 9, I knew a kid who liked to start slapping me, all the while shouting, “Stop hitting me!” You’re sounding an awful lot like him.
The innocent executives who are getting 6-figure salaries at AIG are getting them courtesy of my taxes, taxes taken from my $30,000 schoolteacher salary. I am at LEAST as innocent of the meltdown as those executives are, but money is being taken from me to pay not only their salaries, but also their bonuses. If there’s class warfare, it’s the six-figure folks stealing from me. It takes some serious balls to whine about my objecting to their also taking a bonus.
Daniel
Sam, that’s kind of why they’re doing the AIG thing. Don’t you think?
There is plenty of fodder now for any decent challenger to use in a 2010 election against Dodd, Frank, Waters, etc. And even Obama himself in 2012. Although it’s pretty early to be talking about that.
Congress is doing what it always does when it screwed the pooch. It’s finding villians, holding hearings, and stoking populist anger to deflect attention away from their own incompetence.
$165 million in bonuses? That’s what all the fuss is about? Some staffer probably inserted an earmark for a bike path worth at least that much in the last 10 minutes of the stimulus bill write-up.
AIG has already taken over $170 billion. Why aren’t we talking about that? Why aren’t we getting a little more pointed in our questioning about that? Or about the next $300 billion lined up for more bailouts?
It’s easier for Chris Dodd and Barney Frank to ratchet up the rhetoric against AIG middle management than to account for their own actions. Hopefully the voters will think otherwise.