In today's news, Barack Obama threw a hissy fit over the AIG bonuses. We already know that our President is not a big fan of executive compensation and bonuses, but today he flipped his lid. AIG is planning to pay out over 165 million dollars in bonuses, while receiving nearly 150 billion dollars in government funds. AIG is a quasi-private/public institution that only exists in it current form because of bail-out dollars. Our President is upset that this government funded "company" is paying out $165 million dollars in bonuses. In fact, Obama has claimed that he will stop this "reckless and greedy" company from paying out bonuses. There is only one, sorta kinda big problem with Obama's statement. The bonuses are contractually agreed upon. Or in other words, AIG is legally bound to pay out bonuses that were established before financial troubles occurred. Barack is aware of this, but vows to stop them anyways. Realistically, who knows whether the bonuses will help retain the remaining talent at AIG, or simply waste millions of dollars. At the end of the day, contracts are legally binding, and Barack doesn't seem to care.
Barack Obama's blatant disregard for legally binding contracts shouldn't come as a surprise. His 275 billion dollar housing bailout calls for judges to rewrite loans if lenders refuse to rewrite loan terms, clearly ignoring the legal power of contracts. Barack's refusal to respect contractual obligations always stems from the same motive; economic equality. He doesn't care if bonuses are awarded to productive employees, if AIG is contractually bound to pay them, or if a lender believes a loan can be repaid at its agreed upon rate, Barack wants economic equality, and for that he will sacrifice legal equality.
Before the government "invested" billions of our dollars they should have read the fine print. They should have seen the guarantees and obligations. Then again, maybe they did and just didn't care.
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6 comments:
I agree that Obama has flipped his noodle. The problem I have is that these bonuses are contracted and tied to performance. Obviously these guys aren't performing or they would not be under the microscopic eye of the public.
I have to spend 50 dollars on software and 8 hours of my day proving that all year the government withheld more money than they should have. These guys insure the retirement accounts of the Senators and Representatives and that gets them the label of "too important to fail" and yet my 401K and my investment account took a dive and where is the bailout for me? If the media would give the full details of this AIG thing, you would find out that these bonuses are tied to performance. They performed alright. They made exceptionally risky investments and decisions and somehow they still get this bonus. Makes no sense to me whatsoever. On the flip side of this coin, where does O have the authority? The only real thing he can do is block the stimulus deal and keep AIG from getting more of my money. He doesn't have the intestinal fortitude to do that. The Senators and Reps do not have the intestinal fortitude to tell the people that are insuring their pension funds that they can not have federal funds that belong to the American people. I wonder if anyone reading this blog has any investment accounts with AIG. I wonder if their accounts have an unexplained increase in cash. Somehow, I doubt it. I bet the account holders are left holding the empty bag again while the company gets all this money to make more stupid decisions.
Jesse, I agree that these bonuses seem preposterous. You bring up and interesting point in saying that these are performance bonuses. Before writing the entry I discovered, ann granted this is coming from AIG, that the bonuses are previously agreed upon retention bonuses. Retaining whom, I don't know. Much of the company remains profitable, especially their insurance units, so lets hope the bonuses were targeted there. But realistically, AIG must meet its contractual obligations. Perhaps, the government should do their due diligence before investing. (Sounds kind of like AIG)
Thanks for the comment Jesse, interesting response.
Unfortunately, Jesse, you're wrong. These bonuses are not tied to performance whatsoever. They are retention bonuses, which have nothing to do with performance. In fact, if they had underperformed at their jobs, they would have been fired, or -- and HERE is where we find the crux of the problem -- their company would have gone bankrupt.
Instead of allowing market forces to do what they are supposed to do, the government decided to prop up the business by funneling cash into it. And instead of being angry at people who are merely collecting money that is legally theirs, our population should be outraged at the horrific "stimulus" used to bail out their company.
The bonuses were directed to workers in the "derivatives" department, which is the one that is responsible for AIG's problems. While clearly I am not happy with my money being used to pay people who bankrupted a massive company, I am not upset with them. Instead, the blame should reside with our representatives who felt it was fiscally responsible to bail them out using my and your money.
Dear BFREE09,
Ive been reading your articles for a number of weeks now and I would just like to let your readers know you are an absolute joke. May I just inform you that before you swing your hate-filled, blind slander towards our president, that you need to consider the view of those less then you. Its obvious to me from reading your elitist republican slush that your an over-privileged under-witted drone who needs unnecessary terms and wording to pathetically plead for the readers sympathy.
STOP polluting the internet with this trash and get an education.
Get some information
or
Get some style.
please.
wow...
totally agreed,
this is faggot shit
"May I just inform you that before you swing your hate-filled, blind slander towards our president, that you need to consider the view of those less then you. Its obvious to me from reading your elitist republican slush that your an over-privileged under-witted drone who needs unnecessary terms and wording to pathetically plead for the readers sympathy."
I am not entirely sure how to respond to such ambiguity. You do not bring up a specific example of "hate-filled slander." All of my recent postings have been anchored in fact, and do not tag along to a republican party line. I see the actions of republicans and democrats in the House as a travesty in regards to AIG backlash tax. I do not mind if you attack my postings, I desire debate, but please be specific.
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