Like many of us, I was pretty upset to learn about AIG’s decision to pay out more than $165 million in executive bonuses.
Much of the funds are retention bonuses for employees that are no longer with the company. All of it is going to reward AIG’s top decision-makers for decisions that were…
The recipients of this money are the same people who ran the company into the ground to begin with, resulting in four federal bailouts to-date.
AIG claims they had no choice, that they were obligated by contract to distribute the bonuses.
The federal government has considered forcing AIG to stop the pay-outs, voiding the employer/employee contracts but wisely decided against such a move. I’m as ill as the next person over AIG’s nonsense, but I don’t like the idea of my government involving itself- potentially nullifying- legal contracts.
I wouldn’t mind the fallout in the case of AIG, but I cringe at the precedent such a move would set.
The Senate is currently mulling legislation that would allow the government to recoup the bonuses, but Senate Majority Leader Harry Reid’s effort to pass the legislation by unanimous consent was blocked by Representative Jon Kyl, from Arizona.
I think blocking the legislation is the right move.
AIG has made some terrible business decisions… and has definitely shown that they haven’t learned their lesson, as evidenced by the greedy, nonsensical method in which they have spent their billions in bailout funding.
However, horrible business decisions do not equate to illegal activity.
Currently, as far as I know, it is still legal in this country to be both stupid and greedy.
Simultaneously, no less.
Next we learn that the House, no doubt knowing Congress doesn’t have a leg to stand on with regards to pulling AIG’s bonuses, yesterday passed a bill that would instead tax the bejesus out of the funds.
The bill stipulates that any employee who works for a company that has received more than $5 billion in federal bailout funds and makes more than $250,000 a year will be heavily taxed on their bonuses- and by heavily, I mean 90%.
Now that’s what I call a bonus tax!
If this crap didn’t so drastically effect my loved ones- their day to day lives, and their hopes for financial security during their later years- it would be downright humorous.
Unfortunately, because the stakes are so high, and so many little people are paying the price for these shenanigans, the situation falls less in the “ha ha funny” category and more in the maddening “OMG how can people fuck up this damn badly?!?!” category instead.
Many of us were against the idea of a federal bailout to begin with.
Some of us were against it because of our belief in a free-market economy… a notion that is decidedly in jeopardy once the government gets to intervene any time it chooses.
Most of us simply don’t trust Uncle Sam- not to the extent of handling our investments, anyway. We knew, instinctively that if the government started runnin’ this particular show, mass chaos and huge amounts of dumb-assery were sure to follow.
True to form, the government has managed to make a huge clusterfuck out of an already distasteful situation.
Does anyone else remember, for example, back when the bailout was orignally being mulled by congress, that Senator Dodd (Chair of the Treasury Committee) was busy messing with the law to make sure that once the bill passed, the bonuses would be legal?
Seems to me, had he not done that, perhaps we could have already had a bill in place- one that is part of the original bailout legislation- that would have stopped AIG (and others) from even considering such wasteful spending as bonuses for irresponsible executives who have made deplorable financial decisions… and special spa retreats… and million dollar office renovations.
So, am I pissed off that it has come to this?
Do I think AIG is comprised of a bunch of greedy bastards?
More importantly though, I am even more pissed off at our own government and its hasty, poorly thought-out involvement in this mess.
Hindsight is 20/20, but had our congressional representatives heeded the wishes of their constituents- the little people like you and me- and not jumped headfirst into this stinky hole to begin with, perhaps we wouldn’t be dealing with this bullshit today.
The vast majority of us were against the bailout to begin with. We knew Congress was going to figure out a way to make a jacked up situation even worse.
Will they ever listen?
Not if the currently pending legislation is any indication of lessons learned (or not learned, in this case).
I don’t know about you, but at this point, I’m just going to sit back, grab some popcorn and watch the show.
I hear there’s gonna be fireworks towards the end.