AIG: Geithner's Outraged? He Should Be Embarrassed

Washington and the nation are enraged that AIG is paying millions in bonuses to retain financial wizards that sold insurance on mortgage backed securities with few assets to back up their promises.

AIG is telling us that it must pay those bonuses, because they are required by employment contracts necessary to retain its financial engineers.

Treasury Secretary Geithner has expressed outrage. Instead, he should be embarrassed.

When the Bush White House agreed to bail out General Motors (GM) and Chrysler, it required those companies to renegotiate their labor contracts—that’s right contracts—and they are doing just that to keep their federal largess.

The Obama Treasury, headed by Tim Geithner, is forcing the terms of that deal on the United Autoworkers.

Why did Secretaries Paulson and Geithner not require the same at AIG? Remember Geithner was president of the New York Federal Reserve Bank and a key player when financial giants like Citigroup (C) and AIG were being bailed with the taxpayers’ cash. Those bailouts continue, with easy terms for the bankers and their contracts, on Geithner’s watch.

The threat was the same with AIG and GM. If either shut down, the economy would plummet into chaos and depression we were told.

So Mr. Geithner, instead of being outraged at AIG’s last revelations, perhaps you can explain to all of us why a UAW worker earning $29 dollars an hour must give back wages and benefits to keep their company alive, while the architects of the biggest financial disaster in history get to keep their gold plated contracts.

Mr. Geithner, we are waiting for your answer.

Comments

[ecliptix543]

Although I've felt for some time that the word 'outrage' should be banned from the media for overuse and misuse, this particular case with AIG does fit the definition quite well. We might just have a new Treasury Secretary before too long if this crap keeps up...

2009 Mar 16 09:31 AM

[skeptic44]

Yawn---I'm shocked, shocked, that Geithner is a doofus. Name one on the Dem team that's not a bumbler or at minimum, a tax cheat. Stop gnashing your teath and buy the damn stock at 50 cents. You really think the Dems are going to let the holder of congressional pensions go down? I'll bet you a can of Pelosi tuna fish that the crocodile tears will soon dry up and the Dems will line up to get their AIG payoffs come election time. The Repubs will sweep into control in 2012 and we'll at long last have-----another set of doofuses and tax cheats in charge. Hell with 'em all. Take care of yourself and family first and be smart about spending, saving, and investing your money. Most got smashed but not killed in the downdraft. Don't get mad, nor get even, but get ahead. This too will pass.

2009 Mar 16 09:39 AM

[Thadeus Thornton III]

Yet another "outrage" that the American public gets a whiff of. And now Bernanke thinks the "recession" will end in 9 months or so. I don't think the American public will stand idle that long. I expect civil unrest to start this summer in places like Detroit and other areas of massive unemployment and home loss. The "Big Boys" have wrung all they can out of lying, cheating, and misrepresenting financial statements to get high salaries and bonuses.
If GM and the auto makers had to modify their contracts with the UAW not once, but twice ( not even counting all the reduction in pay in the 2007 contract) so far to get a LOAN, why does AIG get off with this? Oh I know, these "contractural obligations of bonuses" were in place BEFORE the money was given to them. What!??? And the UAW contracts weren't? It's just another blatant demonstration that what's good enough for the "indians" doesn't apply to the "cheifs".

2009 Mar 16 10:36 AM

[slowdown]

Oh no….Let’s not stop with the Treasury Department….where the hell is Corker, Shelby and the rest of the Republicans that were more interested in where the Auto Execs stayed, ate and how there got to DC then they were about working with us to save our jobs and economy. They were the first ones to call our Execs “bumbling idiots” and immediately targeted the labor contracts as being out of touch with the market. They demanded viability plans that included re-opening the contracts and forcing workers to take reductions, bondholders to take less and the UAW to take company stock instead of cash to fund their pension plan. Yeah…..I’m not buying this contract thing at all and I’m more than angry, frustrated and furious.

I want those contracts reviewed and any that were written in the last 18 months declared null and void.
I want all of those employees severed and brought back the next day as contract bundled services at 60% of their current salaries with no benefits. If Delphi Automotive can do it to their salaried employees and it’s legal….so can AIG…and take my word for it – they’ll take the jobs because there aren’t any replacement jobs available. If they don’t…I’ll be happy to jump ship from Automotive to Financial…I’m sure my degree and skill-sets are transferable and I have plenty of co-workers that would be willing or are free to join me.

2009 Mar 16 11:11 AM

[Cobra 1]

I have sent a scathing letter to the white house and the treasury secretary! I am beyond pissed!

I suggest you all do the same and send your elected officials the same scathing messages! Its time to revolt against these pin heads that are our elected officials. We need to start a new, we the people need to remove all elected officials. We need to start out with a group that has term limits, and are common people in touch with reality!

Can I hear an amen!?

2009 Mar 16 11:14 AM

[Texas_Technoman]

It would be interesting to know what there bonus payout terms are. At my company the bonus's are tied directly to business performance (EPS, etc.). Seems like the financial industry's only requirement is a pulse.

2009 Mar 16 11:19 AM

[Suppo176]

Do you seriously believe that the "officials" in Washington and sundry State Capitols actually read the mail that is sent to them? They are too busy fishing money out of Lobbyist's pockets or browsing over potential legislation that is being provided to them by the people they represent - and by that I don't mean the taxpaying voter!

These charlatans have scores of underage minions who may open your strongly worded letter and then, time permitting, get a chuckle or two out of it before tossing it aside.

Members of Congress should not be paid to "serve". They should be forced to survive on the extremely lucrative hand outs they get from their true supporters and leave us, the taxpaying CHUMP, alone!


On Mar 16 11:14 AM Cobra 1 wrote:

> I have sent a scathing letter to the white house and the treasury
> secretary! I am beyond pissed!
>
> I suggest you all do the same and send your elected officials the
> same scathing messages! Its time to revolt against these pin heads
> that are our elected officials. We need to start a new, we the people
> need to remove all elected officials. We need to start out with a
> group that has term limits, and are common people in touch with reality!
>
>
> Can I hear an amen!?

2009 Mar 16 11:44 AM

[Cobra 1]

I am sure you are correct, to say nothing is justifying their existence!

2009 Mar 16 11:48 AM

[anarchist]

yeah, probably Summers (wretch wretch)


On Mar 16 09:31 AM ecliptix543 wrote:

> Although I've felt for some time that the word 'outrage' should be
> banned from the media for overuse and misuse, this particular case
> with AIG does fit the definition quite well. We might just have a
> new Treasury Secretary before too long if this crap keeps up...

2009 Mar 16 12:08 PM

[anarchist]

skeptic44, try and remember that most of Obama's "financial team" are holdovers from the last Republican Administration and therein lies the problem-sos.

2009 Mar 16 12:13 PM

[Cobra 1]

Can you name 2?


On Mar 16 12:13 PM anarchist wrote:

> skeptic44, try and remember that most of Obama's "financial team"
> are holdovers from the last Republican Administration and therein
> lies the problem-sos.

2009 Mar 16 12:51 PM

[fcountry]

I am outraged that Tim Geithner was ever allowed to hold the office that he does. He needs to be replaced...along with these "Executives" ridiculous overpaid compensations.
Tell me this...why do they even deserve ANY bonuses...they have allowed our economy to go to shambles and they think that deserve ANYTHING.
I agree 100% with "slowdown's" above post...

2009 Mar 16 01:06 PM

[Colombus123456789]

I'm with you...


On Mar 16 11:11 AM slowdown wrote:

> Oh no….Let’s not stop with the Treasury Department….where the hell
> is Corker, Shelby and the rest of the Republicans that were more
> interested in where the Auto Execs stayed, ate and how there got
> to DC then they were about working with us to save our jobs and economy.
> They were the first ones to call our Execs “bumbling idiots” and
> immediately targeted the labor contracts as being out of touch with
> the market. They demanded viability plans that included re-opening
> the contracts and forcing workers to take reductions, bondholders
> to take less and the UAW to take company stock instead of cash to
> fund their pension plan. Yeah…..I’m not buying this contract thing
> at all and I’m more than angry, frustrated and furious.
>
> I want those contracts reviewed and any that were written in the
> last 18 months declared null and void.
> I want all of those employees severed and brought back the next day
> as contract bundled services at 60% of their current salaries with
> no benefits. If Delphi Automotive can do it to their salaried employees
> and it’s legal….so can AIG…and take my word for it – they’ll take
> the jobs because there aren’t any replacement jobs available. If
> they don’t…I’ll be happy to jump ship from Automotive to Financial…I’m
> sure my degree and skill-sets are transferable and I have plenty
> of co-workers that would be willing or are free to join me.

2009 Mar 16 02:54 PM

[reality chk]

It is simply an outrage to think that thousands of stories and comments are writen about the auto industry's plight and now finaly someone is talking reality about the thieves and crooks at AIG. Clearly there are more experts on the auto industy than the banking industry, after all who really knows what goes on in those ivory towers? but driving a car make one an expert on the auto industry. It takes something like this to see the level of coruption and greed by these creative financial genius who at this time should be in Jail, instead we are talking about bonuses for a job well done. These guys all think they are superstars, first round draft choices,or the franchise players. Thousands of comments are writen about the overpaid auto workers daily on all the blogs and we are going to let these theives slither away like the snakes they are because we are to busy beating up on the small fish intead of going after the big ones.

2009 Mar 16 03:51 PM

[slowdown]

I can name one and it's the only one that matters...Bernacke. I think he's probably a pretty smart guy...but his comment on 60 minutes last night "mistakes were made" is not accpetable.


On Mar 16 12:51 PM Cobra 1 wrote:

> Can you name 2?

2009 Mar 16 08:17 PM

[john s. gordon]

not surprising that wall st bigwigs get preferential treatment & detroit gets no respect.

on a national basis, financial shenanigans are our most important product. not much stuff is manufactured here anymore. stuff is manufactured in asia or in mexico.
> jack

2009 Mar 17 08:30 AM

[Miken]

www.opensecrets.org/in...

You only have to go to the above web site to see why the financial services industries gets preferential treatment. They are the third highest industry (behind retired people and lawyers) in terms of giving to members of congress coughing up almost $63 million, 64% of that to Democrats.

We'll see what substantive action comes from this 'outrage'. I doubt very much. Detroit's biggest mistake is thinking they can get a fair shake without the big bribe.

Term limits are the only answer.

2009 Mar 17 09:50 AM

[Miken]

As a further update on my earlier post, Barack Obama was the highest recipient in the Senate, and Rahm Emanuel in the House.

Hmmmm

2009 Mar 17 09:56 AM

[Miken]

Absolutely right!! Where are the Republican fanatics of the South when we need them....awfully quiet out there. It just goes to further expose their hypocrisy and anti main street people as well as their self serving statements paid for by their Japanese bosses. We all knew it was there, but this just adds to the proof.

I see that Shelby has a quote out there, not attacking AIG, but the Obama administration. C'mon Senator, you'll have to do better than that!


On Mar 16 11:11 AM slowdown wrote:

> Oh no….Let’s not stop with the Treasury Department….where the hell
> is Corker, Shelby and the rest of the Republicans that were more
> interested in where the Auto Execs stayed, ate and how there got
> to DC then they were about working with us to save our jobs and economy.
> They were the first ones to call our Execs “bumbling idiots” and
> immediately targeted the labor contracts as being out of touch with
> the market. They demanded viability plans that included re-opening
> the contracts and forcing workers to take reductions, bondholders
> to take less and the UAW to take company stock instead of cash to
> fund their pension plan. Yeah…..I’m not buying this contract thing
> at all and I’m more than angry, frustrated and furious.
>
> I want those contracts reviewed and any that were written in the
> last 18 months declared null and void.
> I want all of those employees severed and brought back the next day
> as contract bundled services at 60% of their current salaries with
> no benefits. If Delphi Automotive can do it to their salaried employees
> and it’s legal….so can AIG…and take my word for it – they’ll take
> the jobs because there aren’t any replacement jobs available. If
> they don’t…I’ll be happy to jump ship from Automotive to Financial…I’m
> sure my degree and skill-sets are transferable and I have plenty
> of co-workers that would be willing or are free to join me.

2009 Mar 17 10:08 AM

[Miken]

Thank you Dr. Morici for you expression of all of our thoughts. Finally a SA contributor who is on track.

2009 Mar 17 10:10 AM