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"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."

Ayn Rand

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MORE FALLOUT FROM THESE AIG BONUSES

By
Neal Boortz
@ March 17, 2009 9:05 AM Permalink | Comments (31) | TrackBacks (0)

Yesterday, President Obama and tax cheat Tim Geithner outlined their plan for small businesses. But before doing that, Obama wanted to make sure he had his say about these AIG bonuses. And not surprisingly, he believes that they are outrageous. Not only that, but he wants tax cheat Tim Geithner to "pursue every single legal avenue" to block the payments.

Obama, of course, just had to use this occasion to play into the wealth envy. He used one of my favorite words ... "greed." He said, "This is a corporation that finds itself in financial distress due to recklessness and greed ... This isn't just a matter of dollars and cents. It's about our fundamental values ... All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses. And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules." What rules would that be, PrezBO? Abiding by your contractual obligations? That rule?

Here we have Obama wants to worry about fundamental values. Where were those values when he nominated a tax cheat to be the Secretary of the Treasury and the head of the IRS? Willfully cheating on your taxes is OK. Getting a bonus for the work you've done pursuant to a contract is not.

The White House says that the Treasury Department will use a planned $30 billion infusion into AIG as leverage in order to compel the company to repay the bonuses of financial-products group employees. The infusion won't be final until the company and the Treasury figure out some sort of repayment options. OK .. here's an idea. The bonuses, as I've said, amounted to 1/10th of the amount of the bailout funds. So take this new $30 billion and reduce it by 1/10th of one percent. That would be $27 million Then everything will be square.

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What others are saying

  • AIG
    The U. S. government should not have bailed out AIG, but that fact notwithstanding, the AIG employees who are due a bonus should be paid that bonus, as AIG is contractually obligated to pay them. The almighty federal gub-mint cannot legally stop that, and if that happens, we're socialist pure and simple.
    By Joe Cash @ 03/17/09 11:18:37 PMreport abuse
  • Bonuses and Taxpayers
    Ben Franklin described our current situation best..."A fool and his money are soon parted!" Since our government has the most money to throw around, it seems that Washington is rank with them! But the bigger fools are those who contribute to these fools, either in taxes or campaign contributions.
    By Chris in Missouri @ 03/17/09 06:59:08 PMreport abuse
  • Failure
    This company should have been allowed to fail. It is not the governments role to choose economic winners and losers. Now that they have we need for this bailout to fail. So this type of superhero behavior will not continue to be encouraged. Any way did the government really expect this company to change their behavior by rewarding the behavior with CASH. If I got a CASH reward for being late for work I might show up late once in a while. Actually I get a CASH reward for showing up on time for work so that is the behavior I am encouraged to engage in. If people are not allowed to suffer the consequences of their own actions the actions should not be expected to halt. Our society is unsustainable and this economy is begging for a serious adjustment I think we need to let it adjust its self. If that means depression then that's what it means. What was wrong with the great depression? It produced the greatest generation didn't it. We would be better off with a depression now while some of those people still exist to help guide us with their wisdom. Rather than years from now when we will be left to figure it out without them. It is time for our economy to be allowed to start handing out Darwin awards.
    By owl-czar @ 03/17/09 06:31:34 PMreport abuse
  • Bonus as a four letter word...
    My attitude toward bonuses was tempered at an early age. When I got out of high schoola dnworked at a large , well known dept. store, my first 'bonus' was a box of candy. I was excited. My loading dock foreman explained that every year I worked there, the bonus would get to be more substantial. Wow! It did. So I treated them like something I would like to have but not as something I was due. Fast forward to the last 20 years, different industry, diefferent job...the compensation has grown a lot. The bar has been raised...a lot. But the idea of a bonus stayed the same for me. Love it when I get it, whatever it is. If it's tied to production and I don't produce, I can't expect the same thing. If AIG had it in a contract, agreed to prior to the current mess, then pay it, but stipiulate that future compensation is based on production, quality work, profit. As far as Barney Frank and Chris Dodd and even the President are concerned, shut up and quit politicizing the whole thing. Ain't your call. Under the TARP guidelines, any compensation agreed to prior to Feb. 11, 2009 is to be paid out. End of story. Sorry to hear the sad stories from people who were teetering on the edge and got a not so gentle nudge. More sorry for those who did the right things and lost their jobs and worse. But using the bonuses as a punishment to anybody whose contract spelled out the type of compensation and due dates is stupid. That's Change for ya!
    By Chuck @ 03/17/09 04:53:19 PMreport abuse
  • Those who voted for the stimulus supported the law to protect AIG
    Obama's Own Stimulus Bill Protects the AIG Bonuses He Now Condemns. Shocking —

    http://www.butasforme.com/2009/03/17/obamas-stimulus-bill-explicitly-grants-aig-the-legal-right-to-hand-out-bonuses/
    By Barb Lamont @ 03/17/09 04:32:43 PMreport abuse
  • Please, no ex post facto rules
    I agree with most folks here, that AIG should not have been bailed out. In fact, I think it is inappropriate for the government to spend our money on bailing out any private enterprise.

    However, what is done is done. One thing that kept the Great Depression going strong was that capital sat it out. One of the main reasons is, government became capricious, and no one knew what the rules would be tomorrow. This added a wholly unnecessary and baleful level of risk to what otherwise could have been ordinary economic activities.

    Now that our elected officials have put billions of dollars of our money into AIG, they are forcing us to subsidize AIG's business model. This is wrong, but the solution is to not do it again. We live under a society of laws, not of men - at least that is the theory. Everything the government does to undermine this compounds the original error.

    This is the path of Socialism. Government takes everything, and pays for everything. Now that government pays for everything, they get to call all of the shots.

    We've already taken two steps in the wrong direction; let's not take a third.
    By Pheebor @ 03/17/09 03:30:23 PMreport abuse
  • AIG bailouts
    Let's hope this gets to the courts. While it is generally useless to even attempt to predict what the judiciary will do, there is one exception. That exception is an encroachment on its authority by either the executive or legislative branches. The court's rationale will be, and I'll have to concur, this is their jurisdiction via the route of the bankruptcy courts and they'll run right to the separation of powers argument so fast it will make your head spin.
    By Kerry Hunt @ 03/17/09 02:53:54 PMreport abuse
  • Killing me
    What kills me is that most of this "bonus" money was probably paid out to mid-level managers - those who go to work every day and do their best work. They will then take this money and spend it on ...a new car, a new flat-screen tv, food, mortgage paments, etc..stimulating the economy. I guess we don't want any money coming from average people to stimulate the economy - only money from the govt.
    By MS @ 03/17/09 01:46:21 PMreport abuse
  • AIG bonus Flap
    The free market system in this country has a long history of righting itself when faced with recessions, but now we have people in D.C. who think they can do better. There is talk of "challenging the the fundamentals of the economy". This sounds scary to me. They're talking about changing the foundation of the very things that have made this the greatest country the world has ever seen!

    The government of this country was not commissioned to meddle in the day-to-day affairs of business or the citizens. It's purpose is supposed to be protecting and defending the US of A. and it's people. To me, it seems that it is trying to do everything but.
    By Phill @ 03/17/09 01:14:22 PMreport abuse
  • Govt. meddling
    The freemarket system in this country has a long history of righting itself when faced with recessions, but now we have people in D.C. who think they can do better. There is talk of "challenging the the fundamentals of the economy". This sounds scary to me. They're talking about changing the foundation of the very things that have made this the greatest country the world has ever seen!

    The government of this country was not commissioned to meddle in the day-to-day affairs of buisness or the citizens. It's purpose is supposed to be protecting and defending the US of A. and it's people. To me, it seems that it is trying to do everything but.
    By Phill @ 03/17/09 01:07:29 PMreport abuse
  • Say What....
    We hear all this outrage over the AIG bonus payout. How could they mis-use TAXPAYER money like that! Disgusting!

    Funny...How much money was wasted by this administration on January 20th? How much money was wasted on the Super Bowl party by this administration? How much money has been wasted by this administration since January 20th? Yet, we are all upset about the piddly little 160 Billion that AIG got and the bonus money they paid out (160 Million).

    When will people stop falling for the smoke and mirros redirection scheme that is so over utilized by this administration!
    By Rick @ 03/17/09 12:55:01 PMreport abuse
  • Dog and pony show
    The time to look at AIG's operations and obligations and attach strings was before the government gave them the money. That's the government's fault, not AIGs.

    Jay, go to any city street corner, give someone $100 dollars or sign over your car title in front of witnesses, and then demand it back. Let us know how that works out for you.

    Jon, nobody forced the feds to give them money, but I was forced to give the feds money. The feds are the looters here. You're right that they should have gone bankrupt, BEFORE we spent $160 billion in taxpayer's money on them. That horse has left the barn. We'll certainly never see it again if they go bankrupt now, or if the government runs it.

    You're right H, if they can tax 100% of a contracted bonus, they can do the same to anybody else(and eventually will), and it will only be a matter of time before they do the same thing to salaries. The dp thinks someone wanting to keep 70% of their own money is greedy but the dp taking 30%( thoughI'm yet to hear a democrat put a limit on how much) of someone else's money isn't.

    The dp is having a mossyhorn steer over this, yet they just blew over a trillion bucks on a handout bill that nobody read and contains no auditing process. It's called distraction, suckers.
    By CowboyUp @ 03/17/09 12:44:30 PMreport abuse
  • AIG Bonus Flap
    This campaign against the AIG bonus is a total scam, plain and simple. The people that are complaining the loudest, knew a year in advance these bonuses were going to be paid out. The company had to announce this bonus by law. Does Sarbane-Oxley ring a bell here?

    Now the idiots that are running our government are wanting to tax this money at a 95% rate. Well, that won't work, because Chris Dodd (D-CT) stuck a last minute provision in the stimulus package that exempts corporate bonuses that were contracted for before February 11th, 2009. The Congress voted for this and Obama signed it into law.
    By Stan25 @ 03/17/09 12:24:40 PMreport abuse
  • Give me a break
    Government has no right to even complain about these bonuses. They forced this stimulus down our throat and made sure no strings were attached. It is there own fault this happened and should just shut up and take their medicine. They shouldn't have gotten involved in this mess and we would have all been alot better off for it.
    By Ben @ 03/17/09 12:05:47 PMreport abuse
  • Sadly the populist march continues
    If AIG had been allowed to go into bankruptcy, then a bankruptcy judge could determine how much of those bonuses could be paid to traders from the rubble of a company they helped to destroy.

    Will we finally have the courage to say no when the auto industry makes another run at the taxpayer cookie jar? Of course the outrage will not be as intense when union auto workers get their negotiated benefit pay to sit idle in a job bank or a get generous retirement medical.

    The exciting dance will be to watch Chucky Schumer rail against the AIG bonuses but not stop them after he calculates how much NY state tax revenue is at stake.
    By Scwott @ 03/17/09 11:20:45 AMreport abuse
  • TALENT SHOW
    There is no reason to believe that the LOSS sustained by AIG, fueled by their creation of Credit Default Swaps, was a basis for reward. Why would any rational person want the AIG financial sector officials to remain in charge?
    If this is talent worth retaining then so are the Franks, Dodd, Geithner, Pelosi, Reed, etc.
    By Shida @ 03/17/09 11:10:22 AMreport abuse
  • AIG Bonuses
    The bonus payout excesses at AIG are just the tip of the iceberg of what is happening with the other Wall Street bailouts including Bank of America.

    Working productive Americans are bailing out the same crooks that destroyed our economy along with 45% of the wealth in the world. Now the American taxpayers and our posterity will be forced to live a far lower standard of living with reduced prosperity and opportunities due to the accumulated national debt to fund the bailouts and once again we will pay the price.

    Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. I believe Washington plans to monetize the debt in future years while they tax and destroy our remaining wealth by depreciating the dollar.

    To stop this wealth attack, the Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is beginning now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts
    By Ron @ 03/17/09 10:56:32 AMreport abuse
  • AIG Bonuses
    My thought during my working life, is that bonuses were given for jobs well done, above and beyond expectations, making the company stronger financially. You fail, you clean out your desk and "hit the door."
    We keep the "bonus money." Now we can use this money to hire a person who will help us flourish.
    By Laughing @ 03/17/09 10:48:12 AMreport abuse
  • Too many people here are angry and want to take it out on AIG employees. Do you think that every person there contributed to the downfall or were some of them doing a good job? Are you thinking that if a company loses money folks should not get paid? Then all the auto workers should work for free? Like Obama would let that happen. Our government has been a loser for years so all government employees should work for free?
    We have to realize that there will not be much of an economy if folks do not get paid. Think of it as a stimulus.
    By anonymous @ 03/17/09 10:46:52 AMreport abuse
  • John Kerry to the Rescue
    I heard John Kerry (Chair of the Finance Committee) on Imus this morning. He said his committee is busy drafting legislation to completely tax the bonuses... that is, let the government impose a 100% tax on the bonuses paid out. Some would say that's great, but just think about who's next to get a 100% tax- maybe the mean oil companies making "too much" profit? Maybe anyone making above a certain amount? This is a REAL slippery slope if you want one.
    By H @ 03/17/09 10:44:48 AMreport abuse
  • AIG Bonuses
    Letting the government run AIG is a sure way to guarantee that AIG will never pay the money back. The bailout is bad. The government dictating how AIG does business is worse. Like any other Lendor the government should focus on repayment.
    By Steve G @ 03/17/09 10:19:06 AMreport abuse
  • AIG bonuses
    It might be good to keep in mind that AIG is an insurance company and most entities work on a bonus mode. Moreover, AIG was the insurer of the bad loans pushed on by the CRA and its acolytes (Barney and the Mays). In a way AIG was the guy holding the end of the rope after all others had let go the rope.
    By german cruz @ 03/17/09 10:15:39 AMreport abuse
  • Bonuses
    Unless things have changed since I left, most CDC employees get bonuses and I think it is fairly common in other agencies. My government pension had an increase of over $4000 in January. Is that OK with Obama? It is definitely OK by me, since the perks made up for getting a lower salary salary than private industry.
    By Norm @ 03/17/09 10:01:48 AMreport abuse
  • Stimulating!
    Ah, let them get their bonuses. This will give them the opportunity to go out and spend it, thereby helping Obama take credit for our "strong economy." Stimulating, isn't it?
    By Amy @ 03/17/09 09:56:26 AMreport abuse
  • I've got a better idea.
    It is VERY unlikely the Treasury will get the welfare back from AIG, so let AIG fail like should have happened back in October. Cut our losses and get on with it. Let then file for Chapter 7! Their assets will be liquidated and the proceeds will go to AIG's creditors. Have a problem with that Neal? If we'd had a true fiscal conservative in the White House that said 'no' to the welfare queens on Wall Street back in September when this 'crisis' began then AIG would not be an issue for us now!
    Neal seems to think AIG handing out bonuses is wealth-envy thing. Well it is in a way I suppose. I envy my wealth and really hated what happened back in October of last year when so much of the taxes I paid when to companies that should have been allowed to fail. We sure did kick the moral hazard to the curb didn't we?
    By Michael @ 03/17/09 09:24:23 AMreport abuse
  • AIG BONUSES
    WHAT OBAMA IS NOT SAYING IS THAT TIMOTHY
    GEITHNER, THE FAMOUS TAX CHEAT, WAS ORIGINAL INVOLVED IN DRAWING UP THE AGREEMENT ON THE BONUSES.
    By BARBARA FORTIN @ 03/17/09 09:23:51 AMreport abuse
  • Obama Comments
    I really don't care a whole lot about Obama and his comments. I don't think they are his comments at all.

    I was watching some Laura Ingraham outtake and he was talking about something and I just got the feeling that he did not know what he was talking about.

    I decided that someone had written all his words for him - well in advance and he was just reading.

    I did not get any impression that he was sincere at all. I did not get the impression that he has the intellectual capacity to come up with so many words and expressions on his own. It does not seem possible for one human.

    I envisioned a dozen people sitting around beforehand for hours coming up with the most babbling they can to confuse or sound impressive - so he comes off like he really knows what he is talking about - and he doesn't.

    It is the same when they put people in the audience for him and plan the questions they will ask and script the answers before the conference.

    I guess all politicians probably do this to some extent.

    The one on one with Rush would really be fun to see if Obama did not know the questions and had to think up answers on his feet.
    By Steverino @ 03/17/09 09:23:12 AMreport abuse
  • Neal, why are you defending the looters?
    So the looters get to "honor" their contracts because MY MONEY was used to bail them out?

    Bull****

    This is why these failed companies should have been allowed to go to bankruptcy. The bailout money should have been used to pick up the pieces, not simply to help them honor their bogus contracts with their looting employees.
    By Jon baker @ 03/17/09 09:16:59 AMreport abuse
  • AIG Bonuses
    I think that any company taking funds from the government should have all of their employees work for free. This would be a mandatory requirement and the employees would have to continue to work or be thrown in jail. After all, they are all just greedy, from the mail room up.
    By Hayden @ 03/17/09 09:15:53 AMreport abuse
  • Bonuses
    What everyone seems to forget is that if AIG had declared bankruptcy, these bonuses wouldn't have been paid. Therefore, if we don't bail them out, no issue.
    By Trey @ 03/17/09 09:13:54 AMreport abuse
  • What is your problem Neil
    I work at a company that pays annual bonus as well. But this year since the company lost money.. We are not getting a bonus. I would consider $170 bil of our money to be a loss for AIG therefore no bonus money should be paid out. If you want to talk about contract law then fine. Give us our $170 bil back and if AIG is still in business then pay the bonus.
    By Jay @ 03/17/09 09:13:00 AMreport abuse
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