The American people are bleeding to death, and “in the midst of an economic debacle, it is the rich who are being bailed out.”
[Taxpayers have already put up $173 billion, or more than a thousand times the amount of these bonuses, to fund the government’s AIG “rescue.” Since September 16, AIG has sent $120 billion in cash, collateral and other payouts to banks, municipal governments and other derivative counterparties around the world. This includes at least $20 billion to European banks. – “The Real AIG Outrage”, WSJ, March 17, 2009.]
AIG, received more than $170 billion in emergency federal aid, has become the chief exhibit for both sides of the bailout debate.
Executives say they must pay retention bonuses to keep employees who are unwinding its Financial Products division, which nearly brought down the insurance giant with trading in exotic derivatives. But a former senior Financial Products executive who spent eight years at the firm disagreed.
Because the division is shrinking and no longer seeking new business, many workers have lost their relevance.
The only key positions are employees who are working to extricate AIG from $2 trillion worth of outstanding contracts, the executive said. “The guys who are getting paid all the big money are not really the ones who are important to the company,” he said…
AIG could cease to exist any given day, and, in bankruptcy, the assets are taken over by solvent, better run companies. If it’s done right, the mess is cleaned up in 6 months, and its customers continue to get service, barely missing a beat.
…Several industry executives, observing the pressure being exerted on AIG and other big banks, say they are worried about joining in government efforts to rescue the financial system in the newly charged political environment.
“Am I afraid of the populist outrage? Yes,” said Lynn Tilton, chief executive of Patriarch Capital, a private-equity firm that has weighed making such an investment.
New York Attorney General Andrew M. Cuomo yesterday questioned the value of bonus payments in retaining employees at AIG. He noted that of 73 people who received bonuses of $1 million or more, 11 no longer work at the company.
AIG declined to comment. (fat surprise there, huh?) But a person familiar with the situation said the company did not want to release the names because of privacy issues and also out of concern for the safety of the individuals.
The company has been flooded with irate phone calls and death threats in the past few days.
The new guy at AIG says that he “understood” the public fury at the bonuses. I very much doubt that. If he had any comprehension before the tsunami of anger, he would never have signed off on them.
Now, maybe he has some notion that it wasn’t a good idea, but I don’t think he “understands” the fury of people who make, say, $40,000 a year being taxed to provide fat bonuses to people making a many hundred thousands a year and screwing up royally in the doing.
He has no idea at all what it feels like.
His income in retirement is higher than most people make in several life times of work.
Enough! We don’t want no stinking cake!!! Said the poor to Marie-Antoinette.
But even Marie Antoinette was more in touch with the public than it seems our financial industry and government is. She was known to have said “It is quite certain that in seeing the people who treat us so well despite their own misfortune, we are more obliged than ever to work hard for their happiness”.
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