Tales from the Trail

First Draft: Monday’s blue mood — AIG outrage

March 16, 2009

It’s on front pages, news shows and all over the Web: outrage at the bailout of AIG, AIG/ the troubled insurance giant that — so far — has gotten $173 billion in U.S. taxpayer money and has given out $165 million in bonuses to the very executives who brought the company to its knees.

A quick Web search of “AIG outrage” for March 2009 gets 190,000 hits, ranging from Al Jazeera (“Outrage against AIG set to mount”) to USA Today (“AIG bonus outrage plays Treasury officials for saps”). Part of the outrage stems from the Obama team’s contention that there’s nothing they can legally do to stop these bonus payments.

Barney Frank, a Massachusetts Democrat who heads the House Financial Services Committee, came up with a plan in an interview on NBC’s “Today”: AIG’s execs can keep their bonuses but they don’t have to keep their jobs. “These people may have a right to their bonuses but they don’t have a right to their jobs foever,” is how Frank put it.

At the White House, President Barack Obama and Treasury Secretary Timothy Geithner are set to talk with small business owners about a plan to make it easier for them to borrow money.

Outside the Beltway, the mood turns from outrage to madness — the college basketball kind of madness that comes in March when the NCAA unveils its tournament field. NCAA/ The national championship is April 6 in Detroit.

Photo credits:
The American International Group building in New York, March 2, 2009 file photo. REUTERS/Shannon Stapleton/Files

Duke’s guard Jon Scheyer (R) passes under the basket as Florida State guard Jordan DeMercy defends during men’s NCAA basketball action in Atlanta, Georgia March 15, 2009. REUTERS/Tami Chappell

Comments
23 comments so far | RSS Comments RSS

Tell all AIG employees that they can take the bonus if the contract says so, but if they do, they will be FIRED on the spot. There is no legal obligation to keep them employed.

On second thought, fire them all.

Posted by Hager | Report as abusive
 

I wouldn’t let Barney Frank plan a funeral for a dead goldfish. Him and his ilk were responsible to a high degree for our problems. In a video from July, 2008, he stated that Fannie Mae and Freddie Mac were in great shape. They were in desperate trouble at that point. It is my understanding this video clip was banned in the US and it came from Canada. Go figure!! http://WWW.youtube.Com/watch?v=cMnSp4qEX NM&NR=1 Watch the other clips.

Posted by Clancy | Report as abusive
 

I run a small business, or I should say, I did run a small freight business before it all completely fell apart. I do not get a bonus when I am not making any money. How can AIG justify giving a bonus to people that have lost billions of dollars? These bonus’s are coming from the tax money the people have paid in to our government and I said NO, I will not agree to this pay out. All people should write their Congressman, Senator, and House members and say, NO! We will not allow this.
Remember the term “WE THE PEOPLE”.

Posted by Sharon McKown | Report as abusive
 

Boycott AIG. Boycott any company receiving bailout funds and paying bonuses. Bonuses are extra pay, rewards, typically given for excellent, above average, performance. These companies should have to demonstrate, publicly, the validity of each bonus awarded. No more business as usual, but rather an enforced transparency in all dealings into which taxpayer money is being poured.

Posted by Don | Report as abusive
 

Firings?!!!

There should be widespread arrests and indictments. This is a clear indication of how messed up the U.S. has become. People that steal a few dollars worth of stuff end up in jail in this crazy country, but those responsible for stealing or wasting billions of dollars are threatened with POSSIBLY being fired. Talk about your two tiered system. Disgusting…

Posted by Mark | Report as abusive
 

In addition to firing the lot of them, let us boycott all their policies – auto, home, life, .. everything.

Posted by Mahesh Bhave | Report as abusive
 

I am an AIG employee (head hung). And I have to say that I am also ashamed of the way my company has been acting, but please do not think that this has been a bed of roses for us little people in the company. While management and execs get bonuses they rip on us about how we should be acting to save the company money. Our management team is abrasive and negative and according to them we do everything wrong. These people whom I just got aquainted with last summer are unbeliveable. I have literally seen them step over hundreds of dollars to pick up a nickel and yell when we let the nickel go but saved hundreds if not thousands in our day to day activities. Tax payers I am with you and just as disgusted and ashamed! Please do not cast stones at me as I pass by you on the streets, I have nothing to do with this!

Posted by caroline | Report as abusive
 

The President and his advisors clearly didn’t plan this out. I blame him for this bonus non-sense and him being outraged is smoke and mirror to cover his own mistakes. Mr. President how many more mistakes are you going to make that are going to cause the tax payers money?! Please be man enough to say, ‘ yes, my lack of foresight resulted in this 160M mistake ‘.

Posted by AJ | Report as abusive
 

I am thoroughly outraged! These crooks deserve no bonuses. Give them a bonus, give me a bonus. Send me a million $ check, and I’ll stop being angry at the American Taxpayer’s rape!

Posted by John | Report as abusive
 

I think that it is utterly reprehensible of these bottom feeders to pay out bonuses at a time when jobs are being lost on a daily basis, people are losing their homes and livelihoods. So what if it is a breach of contract, let the first AIG employee to sue them for that so-called breach of contract go ahead and sue them, then we will know exactly who these disgusting people are. On second thoughts, perhaps the entire list of those still wanting their payout should be published, shame them into some kind of action.

Posted by Gill | Report as abusive
 

They are betting that they will not be fired or taken over by the government and that they will get their bonuses.

Call their bluff!!!!!!!!!!!!!!!!

Posted by Bruce | Report as abusive
 

under Obamas watch, the US has only given 38 billion to aig. Why is this Obamas fault. Shouldnt we be asking ex-pres Bush (thank God) why he let this happen.

 

The AIG scandle is just the tip of the iceberg. Corporate heads in almost every industry are filling their pockets and justifying the bonus money as needed for retention for it’s top talent. Hello, wake up. With all the job losses, there is no need to pay retention bonuses. Where would these people go if they left. There is no reason on earth why corporate heads are being paid the kind of money that they are receiving and then being paid a retention bonus on top of it.

As for them being such talent, if they are that talented and needed – why are the companies that are paying them so much in such trouble that they need my tax dollars to pay retention bonuses.

This practice amongst the greedy must stop now.

Posted by Robert | Report as abusive
 

Health, Education and Welfare in this country has been in dire need of money for many years and each time Washington claim there is no more money. Now, all of a sudden we have billions to bailout banks. Where did it come from so fast and so easy? And how come we do not have money when Health, Education and welfare is in need of the money?

Posted by Mitch | Report as abusive
 

before anyone, including myself, points a finger at who helped create this great shedding of wealth, i would suggest we all look in the mirror. We all thought the ride would never end and I simply don’t mean this current meltdown, I would lump the whole century we have just left behind. Who pays for war? Who profits from poverty? Who benefits from cheap finance? We all did. Mea Culpa, so look past the personalities and listen to Cicero, who said . . .
“The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn’t want to go bankrupt. People must again learn to work, instead of living on public assistance”.

Cicero 55 BC
Roman author, orator and politician (106 BC – 43 BC)

or closer to home . . .

” I BELIEVE THAT BANKING INSTITUTIONS ARE MORE DANGEROUS THAN STANDING ARMIES . . . IF THE AMERICAN PEOPLE EVER ALLOW PRIVATE BANKS TO CONTROL THE ISSUE OF CURRENCY . . . THE BANKS AND CORPORATIONS THAT WILL GROW UP AROUND THEM WILL DEPRIVE THE PEOPLE OF THEIR PROPERTY UNTIL THEIR CHILDREN WAKE UP HOMELESS ON THE CONTINENT THEIR FATHERS CONQUERED.”
THOMAS JEFFERSON
1743 – 1826

 

It is foolish to believe that this is AIG’s fault. Our Federal Government should have had this sort of thing ruled-out prior to doling out more than $500 for every man, woman and child to a single entity. AIG has received $2,500 from my family alone via this bailout. Our country is the laughing stock of the world. Simply a circus.

Posted by Brook Leonard | Report as abusive
 

AIG’s management is certifiably criminally insane. Thus their insurance license should be revoked.

Posted by GIDEON | Report as abusive
 

Have you ever seen a Leech pulled off while bloodsucking its host? Its simply gasping for “breath”, in this case more blood. I am afraid it will be hard to pull these Leeches off their hosts without tearing flesh and leaving an ugly, bloody wound. I guess you have to kill the host before the Leeches drop off and look for anothe r fresh supply of blood. Such is the condition of Wall Street at the top. AIG has simply uncovered them for all to see.

Posted by Hank | Report as abusive
 

OK! Congress fell for it and decided to fund AIG. Now since AIG decided to give millions to the incompetent and dishonest it is evident that the incompetent and dishonest are still in charge at AIG. No loan for AIG because the incompetent and dishonest are still in charge and that is a misuse of public funds. It is time to break AIG up. OBAMA and congress will get a lot of praise they dispose of the liability and sell off the assets at AIG and do it quickly. We were told if we do not fund AIG the sky would fall. The sky has fallen now lets do the right thing.

 

I think you’re all wasting your time complaining. Because that’s all it is, complaining. By the time this article hits the archives these execs will have their millions in the bank, laughing that the public wants them fired. I can’t imagine they’d want to work for a company they destroyed that’s now 80% owned by the government and tax payers.

I seriously don’t see how any of this will do any good. The damage has been done. We’ve lost billions (or trillions) to greedy execs who are smiling ear to ear with the bailout money. Now excuse me I have to get back to work to pay my 33% taxes.

Posted by Jay | Report as abusive
 

Look, the outcry comes little bit too late and again Government fell asleep at the controls (why should the president deal with these issues in the first place..).
Nevertheless, any bonus payment by definition is surely based on past performance, company and individual, awarded restrospectively by the supervising officer – usualy in the March salary. Almost certainly such is the structure of AIG’s contracts also – anything else is doubtful. It’s designed to motivate employees to ‘extract more meat from the bones’ (you and me). It’s a normal practice at most corporations worldwide. As it happens AIG lost big last year so the preconditions have not been met. End of story. No one will leave the company voluntarily over this issue, after all who’d hire that ‘talent’ anyway (most folks would not know how to lose 50 billion, get paid while doing it and again after it’s confirmed). Future contracts ought to be structured such that top executives should have their floating part of salary increased (base salary decreased) but already we’re seeing the opposite trend – why bother with bonuses (not likely for years to come) if the base salary is going up. You can rest assured they’ll try whatever you let them. It’s counterproductive in the long run but in case of AIG – now majority state owned, it’s a disgrace. The Government will make a noise but after a while it will go away (citing legal issues) – the politicians on both sides wil do nothing as they need the campaign contributions. It’s a shame. Talk to your local politician. Well done Mr. Cuommo.

Posted by Franz Kafka | Report as abusive
 

The Treasury Sect has found the perfect way to make sure this is a one term President. Just let the Bonus money roll out, and everyone keep their cushion and job, and he will be voted out by the very people who voted him him into office. Amateur night at the White House is the song I hear playing.

Posted by Tom | Report as abusive
 

excuse my lack of knowledge… but, how on earth could someone consider this W.Street lads TOP TALENTED?? if i do wrong on my business and got expelled by the market for that reason, do i get paid by the government…? some 250 years ago, those who were filling for bankruptcy were jailed in the Tower of London.

Posted by Fausto Leund | Report as abusive
 

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