AIG and bonuses

3/16/09 2:02PM EST

I didn't post on this earlier, because I'm getting tired of expressing the same outrage over bonuses for bailed out executives. But it's probably worth doing anyhow. I'm having a hard time getting too excited about the fact that Barack Obama just announced that he's "asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole." My strong suspicion is that the government (80 percent owner of AIG) has known that these bonuses were coming for some time, and either fucked the dog or decided, for some reason, to let them go forward.

But this is basically what you should expect in a country where the government is so cozy with corporate interests. You saw a variant in the FISA fight last year, where telecommunications executives, the Republican party, and many Democrats put a big fight to win retroactive immunity for companies that helped the administration illegally spy on American citizens. That was a bailout in its own right, and the telecoms got their way based on the explicit (and legally questionable) threat that they'd refuse to assist the government in the future if they didn't get legal cover for what they'd done in the past.

You're seeing a variation on the same theme here, wherein financial services firms think they have the White House and the Congress by the balls and are just daring them to take too heavy a hand. "We need these bonuses," they seem to be saying. "We need them to retain talent to make sure we don't fail, and if you block us, the country will suffer." And the government seems all too happy to believe them.

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Possibly, Treasury/Obama knew that these bonuses were in the pipeline, waited until this moment to let the press know that they were coming up, jumped on them vigorously, and will next come up with some scheme to stop them in their tracks and save the taxpayer. Assuming Obama's capable of stopping the bonus payments one way or another, it makes sense to keep them close to the vest and stop them in sync with the roll-out of his recapitalizaiton/reregulation/reinvestment plan to show that he's showing AIG et al tough love at the same time he's bailing them out.

If they'd done whatever wrangling's necessary to stop the bonuses two months ago, it wouldn't have been such a big deal and they wouldn't get credit for doing it.

Posted by: Zach on March 16, 2009 05:38 PM

I believe the bonus payout excesses at AIG are just the tip of the iceberg of what is happening with the other Wall Street bailouts including Bank of America. Working productive Americans are bailing out the same crooks that destroyed our economy along with 45% of the wealth in the world. Now the American taxpayers and our posterity will be forced to live a far lower standard of living with reduced prosperity and opportunities due to the accumulated national debt to fund the bailouts and once again we will pay the price.

Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. I believe Washington plans to monetize the debt in future years while they tax and destroy our remaining wealth by depreciating the dollar.

To stop this wealth attack, the Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is beginning now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts

Posted by: Ron on March 17, 2009 11:24 AM

Posted by: Rap on September 6, 2009 05:19 PM

Posted by: nusret on September 18, 2009 10:57 PM

AIG and bonuses

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