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View Full Version : Is AIG, the first Financial Services Welfare Queen?

bam bam
03-18-2009, 09:55 AM
http://www.bloomberg.com/apps/news?pid=20601070&sid=a0hyjGS2O3EI&refer=politics (http://www.bloomberg.com/apps/news?pid=20601070&sid=a0hyjGS2O3EI&refer=politics")

So now the plan is to either deduct the bonus money from operations or future money lent by the govt? How does this make any sense? The only reason this corrupt entity is still in business is because of the government bailout. The company needs the govt cash precisely because it is not generating earnings. The only money the company has is the government's. So if they are deducting the bonus money against future government infusuions, isn't it really only the government's money that Geithner is getting back? The government will have to replace this money at some future date, regardless of whether there is any hope of ever turning this monstrosity into a profitable business.

Furthermore, taxing at 70%, 90% whatever is equally as absurd. This is logic only a legislator could love. The govt is going to lend/give/flush money down the toilet to AIG at a certain rate, the company is going to pay it out in bonuses to their employees and then the govt is going to get it back by taxing it at some ridiculous rate. Well, why are we lending them the money in the first place?

I was so against this when Geithner came up with this plan back in October.
buzd
03-18-2009, 10:08 AM
I agree with all of that, but also, does it make any sense to pass tax law retroactively on money that has already been "earned" (for lack of a better word). That sets a horrible precedent, IMO. Why not retroactively raise the tax rate for income earned during the dotcom boom?
Alex
03-18-2009, 12:45 PM
The real problem is Geithner was present last April when AIG discussed these bonuses, and he still gave them the money. I am just not sure this guy is up to the task of being Treasury secretary.

edit:

I do not have a source for this info except to say I heard on cable new last night that Paulison and Geithner were both in a meeting with AIG last year when it was announced that they would be paying these bonuses. If this information is correct, the Timmy is full of **** when he says he did not find out until two weeks ago.
cstoehr
03-18-2009, 12:47 PM
Oh yes he is, he is promising to do a better job on his own taxes too:covri:.
#7 throw away to do list.
03-18-2009, 01:31 PM
the whole thing stinks. however, to play devil's advocate. if you were a term life insurance salesman who made his quota yet a majority of the policies written collected a death benefit wouldnt you still want your bonus? yes, the CDS's these guys were peddeling were bad for the house. but, they were hired to sell them and sell them they did. if you want to recoup these bonuses then you should also want to recoup the commish on every scratch and dent mortgage sold over the past few years.
Alex
03-18-2009, 03:30 PM
It looks like Freddie and Fannie are next up for bonuses.

http://www.foxnews.com/politics/2009/03/18/fannie-mae-pay-bonuses-g-execs/
bam bam
03-19-2009, 03:10 PM
The AIG situation gets worse. The House's law that just passed taxing the bonuses at 90% is unconstitutional bill of attainder. The constitution prohibits ex post facto laws designed at punishing a particular group of individuals.

IMHO, this is more outrageous than paying the bonuses.
Alex
03-19-2009, 03:22 PM
The AIG situation gets worse. The House's law that just passed taxing the bonuses at 90% is unconstitutional bill of attainder. The constitution prohibits ex post facto laws designed at punishing a particular group of individuals.

IMHO, this is more outrageous than paying the bonuses.

Yeah, I hear ya BB. When the courts strike it down, and they will, the congress will say "well, we tried, but.... the courts...."

What is most outrageous is this:

"Senator Ron Wyden said on Tuesday that the furor surrounding AIG's bonus payments could have been avoided had the Obama White House and members of Congress simply backed legislation that he and Sen. Olympia Snowe introduced more than a month ago."

http://rawstory.com/news/2008/Senate_quietly_stripped_measure_restricting_bonuse s_0318.html

The Wyden-Snowe provision was mysteriously dropped in the early February closed-door negotiations over the stimulus bill -- intense meetings that involved Treasury Secretary Timothy Geithner, Obama economic adviser Larry Summers, White House Chief of Staff Rahm Emanuel and budget director Peter Orszag, as well as senior Democratic members of Congress.

Wyden said Summers and Geithner argued that there were "contractual obligations" as they worked to kill Wyden-Snowe.

When asked if the Obama administration has handled the AIG situation well, he pointed against at Summers and Geithner.

http://www.foxnews.com/politics/2009/03/18/sen-wyden-points-finger-administration-abandoned-bonus-provision/