Capital Commerce

The Phony AIG Bonus Scandal Outrage

March 17, 2009 RSS Feed Print

A few thoughts:

1) So Geither is supposed to go after the AIG bonuses. It's is not like he doesn't have a pretty full plate as it is. I mean, he's usually pictured these days as being like the Maytag Repairman, all alone over at Treasury, his voice echoing in the hallways as he searches for help. But all he finds are empty offices of withdrawn nominees;

2) As both Andrew Ross Sorkin and Jim Manzi have pointed out, who is supposed to unwind all these complex derivatives? The hard truth is probably the same guys that put them together. It's like after WWII when America got all those Nazi rocket scientists. Now they're working for us;

3) Rather than being outraged over the bonuses, maybe people should be furious that billions in taxpayer dollars are going to foreign banks. That would have been a nice topic to discuss at the G20 meeting, yes?. This is something Team Obama does not want to talk about;

4) Now there is word that Wall Street firms are scrambling to sidestep pay restrictions that come with accepting government dough. Maybe they will raise base pay, which, of course, defeats the whole idea of pay for performance. More government rules also mean more effort to sidestep them, as people did with tax shelters back in the 1970s. Unintended consequences, my friends.

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Yes, the old guard is back and I felt let down as never before. I had faith in Obahma back in February 2007 when he just showed up in the news. I saw that big smile and said "here's an honest guy, might just be the only one in D.C." He was the first dem for president I ever voted for and may be the last. I voted for Floio for NJ (again, the first and last dem for Gov in NJ for me) and this is turning out the same way.

Pete of NJ 6:39PM March 18, 2009

The hearing in Washington is part of the ongoing "bread and circus" of the TARP debacle. Frankly, it strikes as un-American to criminalize people who recieved bonuses as part of their employment contracts; yet, the very government that gave AIG some $170 billion dollars had to pull teeth (allegedly) to determine how that money was spent. We know now that most of that money has been spent paying off counterparties--which means, in the parlance of the street, that AIG is functioning as a bagman.
Why wasn't Paulson and all of the people who sat in a room and made decesions about this TARP program asked to testify? And what about our elected officials who voted for this TARP money in the first place which has far less transparency that someone recieving a welfare check from the same government?
I voted for President Obama and, sad to say, when I saw Rubin, Summers, and others who are part of the old guard acting as economic advisors, well, I knew the ballgame was up. Totally.
Wall Street, as a whole, did their thing in a climate that was a financial Wild, Wild West. Washington looked the other way. Now the nation and the world has to pay for it. People with low-paying jobs (or no jobs) were able to buy homes (and furnish them) as if they were living out Gilded Age fantasies. Add to that how the basic paycheck of working Americans does not pay for very much and these are the ingredients for social unrest in this country.
Washington does not get any of this and I am not sorry, at all, because certain bankers do not have enough money to pay for three homes.

THINK of NY 5:01PM March 18, 2009

The hearing in Washington is part of the ongoing "bread and circus" of the TARP debacle. Frankly, it strikes as un-American to criminalize people who recieved bonuses as part of their employment contracts; yet, the very government that gave AIG some $170 billion dollars had to pull teeth (allegedly) to determine how that money was spent. We know now that most of that money has been spent paying off counterparties--which means, in the parlance of the street, that AIG is functioning as a bagman.
Why wasn't Paulson and all of the people who sat in a room and made decesions about this TARP program asked to testify? And what about our elected officials who voted for this TARP money in the first place which has far less transparency that someone recieving a welfare check from the same government?
I voted for President Obama and, sad to say, when I saw Rubin, Summers, and others who are part of the old guard acting as economic advisors, well, I knew the ballgame was up. Totally.
Wall Street, as a whole, did their thing in a climate that was a financial Wild, Wild West. Washington looked the other way. Now the nation and the world has to pay for it. People with low-paying jobs (or no jobs) were able to buy homes (and furnish them) as if they were living out Gilded Age fantasies. Add to that how the basic paycheck of working Americans does not pay for very much and these are the ingredients for social unrest in this country.
Washington does not get any of this and I am not sorry, at all, because certain bankers do not have enough money to pay for three homes.

THINK of NY 5:01PM March 18, 2009

The Phony AIG Bonus Scandal Outrage

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