Rage at the AIG Machine

Not to belabor this AIG bonus issue, because the amounts genuinely pale against the total capital infused into AIG - which has been saved more times than a holy-roller -- but the following quote from the WashPost caught my attention today. In addition to senior managers leaving AIG with the news, there was this:

President Obama yesterday vowed to "pursue every legal avenue to block these bonuses." But that pledge might have come too late. About $165 million in retention payments started to go out Friday to employees at Financial Products, after numerous discussions with the Treasury Department and the Federal Reserve.

Attorneys working for the Fed had been examining the matter for months and determined that the retention payments couldn't be touched because AIG would face costly lawsuits and be subject to penalties from states and foreign governments. Administration officials said over the weekend that they agreed with that assessment.

AIG disclosed its retention-payment program more than a year ago, and the amount of the bonuses -- more than $400 million for Financial Products alone -- had been widely reported. But as the payments were coming due in recent days, the White House began to express its indignation.

Talk about slamming the barn door after the cows have gone.

[via WashPost]

Comments

[Silk32:]

The entire bail out of Corporate America and its prima dona traders and executives who have destroyed value over the past decade is beyond ridiculous. AIG may no longer be a going concern regardless of what the government does. If it cannot generate new business then part of the bail out is going to fund future losses. It may have been better for the government to have sent the money directly to AIG's trading partners than to trust AIG with the funds. To learn more go to www.newyorkshockexchan.../

Mar 17 11:16 AM

[User 68127:]

B.O. is grandstanding, and the people are eating it up!

The bonuses amount to 1/1000th of the most recent bailout funds. They are contractually mandated. It would be a seizure of property and violation of the law to break the contracts.

If the feds were so worried about it, why did they give them the money in the first place? And are they going to micromanage EVERY single expenditure and exploit for political gain each one they don'd like, however small? Direct your anger where it belongs--at the government! No bailouts=no need to worry.

And one more thing, for those populist sheep who are taking the bait--don't bother to complain or be outraged unless you belong to the half of this country that actually PAYS the taxes!

Mar 17 12:03 PM

[tshk1221:]

The government must choose a softer approach when dealing with AIG. The government and the public should not drive this time-bomb like company into a corner to explode. If it explodes, we can't get our tax money back. The fact that even the State of California got the bail-out money through AIG signifies that the whole thing entangling AIG and world's financial institutions is a matter of problem solving, not the matter of criticizing. We must calm ourselves and must be cooled down.

The single most important thing we have to think of is how we are going to get our billions of dollars of tax money back from AIG, not the bonuses paid already. If we can get the billions of dollars back from AIG, it wouldn't be a big deal to get the bonuses back. Reduction of future bonuses will do. We must help AIG stand up again as one of the economic engines of the US to get our tax money back. If not, we will just end up with pennies for billions of dollars poured in.

Mar 17 12:27 PM

[Stimpy:]

YOU PEOPLE STILL DON'T GET IT.

All these mega banks (AIG and Goldman included) are the Matrix.

THEY are the true reality of "financial civilization" as we know it.

They are not even separate Companies anymore, in the absolute sense.

They CREATE the LIBOR forwards and the currency forwards, without which there would be little if any trade, National or International.

They will be protected (by the G20) at any and all cost. Just get used to it.

Stopping AIG bonuses would create a potential default event (departure of key personell) --something the Gov has ALREADY spent 130B to prevent. You think another 160 M matters?

Taxes are a cute idea, but where does that stop?

Art sometimes imitates life boys and girls, so DON'T take the blue pill unles you want to wake up puking saline with wires in the back of your head.

Go back sleep,

STIMPY

Mar 17 01:46 PM

[nLightn:]

Thank you for exposing yet one more hypocrisy of the Obama/Pelosi/Reed administration.

Mar 18 01:56 PM