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Mar

2009

About those AIG Bonuses

Posted on 17:39, March 15th, 2009 by EKSwitaj

Read my latest story, "A Tale of Two Birthdays", at 52|250.

Of course, we should all be outraged that AIG plans to use taxpayer money to pay bonuses, but not one of us should be surprised, nor should we take at face value expressions of outrage from politicians who have done little or nothing to prevent such actions. The fact of the matter is that while this use of $165 million of our money is a highly visible outrage, it is actually in line with the goals of the bailout.

Bailouts for companies like AIG have always been intended to maintain the wealth of those in the higher classes and the instruments by which they expand their wealth in good economic times. A cheaper option would have been to allow these too-big-to-fail companies to fail and then use the money saved by not supporting them to help the little people—people like you and me—affected by that failure. TARP has been a sort of top-down class warfare that seeks to maintain an unsustainable system which has always included cycles of economic misery.

For all the populist positioning and expressions of outrage about these bonuses, it is difficult to believe then that any politicians truly object to these bonuses. Consider the excuses being offered by Obama’s advisers:

Mr. Summers suggested that the government’s ability to require the bonuses be scaled back was restricted by preexisting contracts, even though he did not specify what those restrictions may be.

“We are a country of law,” said Mr. Summers, one of several economic officials to hit the Sunday-morning talk show circuit. “There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.”

Mr. Goolsbee explained it this way: “I think the root of the problem has been some of the people have things written in their contract that say, ‘Look, you sell this much life insurance, you get a bonus of X,’ and it’s in their contract and that part can’t be changed.” (source: NYTimes)

Really? Contracts can’t be changed? Of course, that doesn’t apply to autoworkers, but then again, they are not members of the class that bailouts are supposed to protect.

Please, spare us from the melodramatic populism (mydd.com)
Bailed-out AIG doles out $165 million in bonuses. (thinkprogress.org)
AIG still paying bonuses. Oh wells. (dailykos.com)
AIG is doing it again (americablog.com)
Rating Agencies Sign Off On Revised AIG Bailout (huffingtonpost.com)
Why not let AIG fail? Can ‘systemic risk’ be a scare tactic? (dailyfinance.com)
Taxpayers hit by expanding black hole of AIG (telegraph.co.uk)
Huge amounts of AIG bailout went to Goldman Sachs (dailyfinance.com)
Stop Feeding Me A Shit Sandwich (eschatonblog.com)
Report: AIG to get billions more (msnbc.msn.com)
AIG Said to Be Getting $30B More from Feds (abcnews.go.com)
Liz Warren: If AIG, Giant Banks Are Too Big to Fail, Why Aren’t We Breaking Them Up? (oxdown.firedoglake.com)

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Tags: AIG, American International Group, Federal Reserve, Troubled Asset Relief Program

Posted in Uncategorized | print

3 Responses to “About those AIG Bonuses”

Sarah J on March 15th, 2009 at 5:47 pm

Hell yes. Excellent point about the auto workers, as well. Tired of this kind of posturing about “contracts.” Contracts are for rich folks. The rest of us get screwed.

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Jonas on March 16th, 2009 at 12:21 am

AIG = Allowing Irreversible Greed.
AIG = All in Greed.
AIG = Arn’t I Greedy.
AIG = A$#holes, in general.

This is sick. Why in the world are we helping these companies that keep sending millions to people who do not know how to run a company? They cry yet get paid millions on the “average joes” taxes. Furthermore, I fear this is just the tip of the iceberg. Look what Enterprise rent-a-car did to get bailout funds:

http://www.butasforme.com/2009/02/25/alert-enterprise-rent-a-car-may-have-fired-employees-as-fake-evidence-when-lobbing-for-bailout-money/

Not to make excuses for these people, but the bailouts are making crooks out of everyone that touches the money.

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Ron on March 16th, 2009 at 7:49 am

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 and now the American taxpayers and our children will be forced to live a far lower standard of living with reduced prosperity and opportunities due to this but only we 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. Find out what a growing repudiate the debt movement could mean for treasuries, the dollar, gold and the stock market and how this is a better alternative than Washington’s plans to monetize the debt in future years and tax and destroy our remaining wealth by depreciating the dollar.

The Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is starting now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts

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