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TechnoratiThe Sanctity of AIG's Contracts
Larry Summers, Sunday, on AIG's payment of executive bonuses:
We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.
Associated Press, February 18, 2009:
The United Auto Workers' deal with Detroit's three automakers limits overtime, changes work rules, cuts lump-sum cash bonuses and gets rid of cost-of-living pay raises to help reduce the companies' labor costs, people briefed on the agreement said today.
The UAW announced Tuesday that it reached the tentative agreement with General Motors Corp., Chrysler LLC and Ford Motor Co. over contract concessions, as GM and Chrysler sent plans to the Treasury Department asking for a total of $39 billion in government financing to help them survive.
Concessions with the union are a condition of the $17.4 billion in government loans that the automakers have received so far.
Apparently, the supreme sanctity of employment contracts applies only to some types of employees but not others. Either way, the Obama administration's claim that nothing could be done about the AIG bonuses because AIG has solid, sacred contractual commitments to pay them is, for so many reasons, absurd on its face.
As any lawyer knows, there are few things more common - or easier -- than finding legal arguments that call into question the meaning and validity of contracts. Every day, commercial courts are filled with litigations between parties to seemingly clear-cut agreements. Particularly in circumstances as extreme as these, there are a litany of arguments and legal strategies that any lawyer would immediately recognize to bestow AIG with leverage either to be able to avoid these sleazy payments or force substantial concessions.
Since the contracts are secret and we're apparently just supposed to rely on the claims of AIG and Treasury Department lawyers, it's impossible to identify these arguments specifically. But there are almost certainly viable claims to be asserted that the contracts were induced via fraud or that the bonus-demanding executives themselves violated their contracts. Independently, it's inconceivable that there aren't substantial counterclaims that AIG could assert against any executives suing to obtain these bonuses, a threat which, by itself, provides substantial leverage to compel meaningful concessions. Many of these executives were, after all, the very ones responsible for the cataclysmic losses.
The only way a company like AIG throws up its hands from the start and announces that there is simply nothing to be done is if they are eager to make these payments. One might expect AIG to do so -- they haven't exactly proven themselves to be paragons of business ethics -- but the fact that Obama officials are also insisting that nothing can be done (even while symbolically and pointlessly pretending to join in the populist outrage over these publicly-funded "retention payments") is what is most notable here.
Legal strategies aside, just as a business matter, one of the first things which every compnay in severe distress does is go to its creditors, explain that it cannot make the required payments, and force re-negotiations of the terms. That's as basic as it gets. To see how that works, just look at what GM and other automakers did with their union contracts - what they were forced by the Government to do as a condition for their bailout. Obviously, if a company goes into bankruptcy, then contracts to pay executive bonuses are immediately nullified, but the threat of bankruptcy or serious financial distress is, for obvious reasons, very compelling leverage to force substantial concessions. And the idea that, in this economy, AIG executives (of all people) will be able simply to leave and go seek employment elsewhere unless they receive their "retention bonuses" (even assuming that's an undesirable outcome) is nothing short of ludicrous.
There may be other reasons why the Treasury Department decided it wanted AIG to pay these bonuses (Marcy Wheeler considers some of those reasons here), but this claim from Larry Summers that the sanctity of contracts precludes any alternatives is not just false, but insultingly so. It's difficult to recall anything quite so vile as watching hundreds of millions of dollars in taxpayer money flow to AIG executives. One would expect the Obama administration to do everything possible to prevent that from happening. Instead, they seem to be doing the opposite.
UPDATE: Jane Hamsher has more here on AIG's insultingly frivolous claims as to why these contract obligations are unavoidable, and here FDL has a petition, to be delivered to the House Financial Services Committee during Wednesday's hearing on the AIG payments, demanding full disclosure before any more payments are made.
On a related note, could someone please reconcile Larry Summers emphatic declaration that "we are a country of laws" with this:
To use Larry Summer's eloquent phrase (perversely deployed to justify the AIG bonus payments): if "we are a country of law," we would probably do something about these severe violations of law that are right in front of our faces, particularly since we all know exactly who the lawbreakers are.
Apparently, this "we are a country of law" concept means that hundreds of millions of dollars in taxpayer money must be transferred to the AIG executives who virtually destroyed the financial system, but it does not mean that something must be done when high government officials get caught plainly breaking the law. What an oddly selective application of the "rule of law" this is.
153 Comments so far
Show AllContinuing to allow AIG *_ p a y o u t s _ * to incredibly dumb and culpable banksters -- of insurance benefits -- on the illegal PONZI scheme called derivatives is _ I N S A N E _.
especially when the *US taxpayer is funding the 100% coverage,
when the market in already less than 50% of that,
there is plenty of evidence that this doesn't do anything to solve the economic crisis,
they deserve to return their full salaries from previous years, not get more bonuses,
and to boot, future generations will have to pay them back the interest on this, as well .
I want my money back
Namaste
The other Ponzi schemes:
Fiat currency
Fractional reserve banking
Social security
Let's end them ALL
But, but it is the masters of deregulation and the worshippers of the libertarian free market god that are now the detested gubbermint that has done brung us spiralling down.
And you complain about social security?
I'll betcha those bloated CEO's are whining about Social security robbing the fruits of their labor too--while Grandmom eats dog food and gets evicted by the gentrifying condo association funded with urban renewal funds to impose emminent domain.
>>But, but it is the masters of deregulation and the worshippers of the libertarian free market god that are now the detested gubbermint that has done brung us spiralling down.
Lies. These bankers are all for the free market right until the day the free market puts them out of business. Then they cry for socialism. Don't you get it? in the free market, there's a sword hanging over the head of these CEOs every day, and if they pull shit like this they get tossed out on their butts. It's YOU LIBERALS THAT REWARD THEIR MALFEASANCE WITH OUR MONEY.
>>I'll betcha those bloated CEO's are whining about Social security robbing the fruits of their labor too
Social security is a Ponzi scheme. Look it up. I pay into it every single check and I know I won't see a goddamn dime of it when I get old. Fuck the AARP pissing on me and telling me it's raining.
Until libertarian ultra-capitalist unregulated free market ideology was revealed to be a disaster--it had to morph to fend off the crisis of faith of a failed god.
No system is perfect--so we approach it with what is to the greatest benefit to the Common Good. Social security is pooled resources benefitting the whole--and of course free marketeers want to raid it for themselves--that is at the heart of capitalism--greedy self interest and the law of the jungle as opposed to cooperation among all to benefit all in the intersts of fairness and decency and not getting over at the expense of your neighbor.
>>Until libertarian ultra-capitalist unregulated free market ideology was revealed to be a disaster--it had to morph to fend off the crisis of faith of a failed god.
Can you tell me when this existed? Certainly not at any point after the creation of the central bank, the Federal Reserve.
>>No system is perfect-
The free market is not a SYSTEM. It is not something you design and implement. It is a DESCRIPTION: a description of conditions under which people can trade together freely and create wealth. The natural result of a free people living together is peace and prosperity. The natural result of economy-by-diktat is poverty and violence. It is not difficult to understand.
Its a pipedream.
Unfortunately, as the saying goes, men are not angels--therefore regulation (law) is NECESSARY to protect people from the potential ruthlessness of others.
Ah yes, and now we again reach the crux of the liberal worldview.
Too many people are EVIL. The government must regulate all people to keep the EVIL ones in check. Without these protections, men would revert to ignorant savagery and move back into the caves their ancestors abandoned. The collective must protect itself against those EVIL people, as the common man is too ignorant to protect himself. Human nature is the problem, and people cannot live together freely and trade freely because wickedness and slavery will inevitably ensue.
Of course the reality is just the opposite. Most people are naturally good, and freedom both economic and social leads to prosperity. Government is the TOOL of evil people, it is what they use to oppress - it does not restrain them, it is their enabler. Since all government edict is ultimately enforced using political violence, looking to the government for a solution is the ultimate in might-makes-right. Your view, as is currently practiced in this country, is what leads to savagery, poverty, and violence. Who sent our army to Iraq? Was it Microsoft? Was it FedEx? Or was it the GOVERNMENT?
What was the subject of this thread again?
Oh yeah, about how the free market champions of deregulation ran the country into a ditch.
Actually, the gubbermint at the behest of corporate interests framed as "US interests" is the typical cause for US aggression.
The fact is you do not understand government. What government, at its core, is.
Government is the pomp and circumstance that legitimizes wickedness. Without government, people would see things rightly - the state is the criminal organization that grants legitimacy to murder (war,) theft (taxation and conquest,) thuggery (law enforcement,) ethnic cleansing (eminent domain,) slavery (welfare and open borders,) kidnapping (arrest,) torture (interrogation.) Without the 4 year election cycle and the flag, people would recognize these things for what they are.
And THIS is the principality you expect to protect people!?
Dammerung asks, "Who sent our army to Iraq? Was it Microsoft? Was it FedEx? Or was it the GOVERNMENT?"
This is a trick question, because corporations have hijacked the government to do their dirty work, socializing the costs while privatizing profits. Economic freedom for them does NOT mean prosperity for all, contrary to your assertion.
Here's a necessarily short but representative list of those who really sent our army to Iraq (and far too many more nations): ExxonMobil, Halliburton, Blackwater and Raytheon would be among the primary piggy beneficiaries of the GWOT, but they're certainly not alone at the trough.
Yo Damera___
What's wrong with Social Security? It keeps us senoiors off the street when nobody will hire us anymore. Social Security as originally envisioned pays for itself. How can you call retirement income - Ponzi?
With that logic all retirement plans are Ponzis!
I agree with your other 2 Ponzi scheme nominees.
It's a Ponzi scheme in the most technical terms. It always requires more and more new people to pay-in to meet the promises to the old payers; meanwhile, the entire fund is looted by the government to fund its own evil projects. Eventually there won't be enough people entering Social Security to pay off the old ones, and the entire edifice will come down. This is a matter of public record! Theft in blind daylight.
As I said check out the original!!!! It did not need the new people coming in
Then check out the raids on SS monies begun under Nixon that were used to fund other guv programs not envisioned originally - including supplementing the US gov't general operating fund.
This unmitigated looting begun by Nixon is what created the need for new folks coming in.
Are you suggesting you trust the gang of criminals, thieves, and thugs collectively called "government" with your retirement money under any circumstances?
Everything was working OK until the Repuglicans started the thievery. When it was conceived, it was only for those who contributed. Just look at all the programs now funded. Those of us who paid in all our working lives are lucky to get the pittance we do.
I prefer that to the fast and loose investment bankers and Wall Street speculators. No matter who is in office, there are rules, procedures and lots of civil servants to lend stability to Social Security.
Joe
Correct!
I believe you will find that it was Johnson and not Nixon.
Medicare was added in 1965 by the Social Security Act of 1965, part of President Lyndon B. Johnson's "Great Society" program. Social Security was changed to withdraw funds from the independent "Trust Fund" and put it into the General Fund for additional congressional revenue.
From Wiki.....
Dammerung,
Why are you paying into Social Security, then?
The neocons have repeated the same lies about social security for the past three decades. A lie repeated three times and not challenged becomes a fact. The neocons have convinced so many social security beneficiaries that it is a flawed system, the failure of the system may become a self-fullfilling prophesy.
While social security was originally sustainably structured, there was no provision to charge Congress interest on the trillions of dollars Congress has "borrowed" from its surplus. We can only define that "borrowing" as de facto theft.
Had the neocons succeeded in their 2005 campaign (they spent two hundred million dollars on it)to privatize social security, social security would now be in its last cries of imminent death and the Wall Street pirates would be walking away with even more of the victims' money, and every square foot of the underside of every bridge in America would now be fully populated with homeless Americans. Social security payments are the number one source of income in 80% of US counties and its demise would cause a financial crisis beyond imagaination.
If Obama doesn't re-regulate the financial industry soon, the US will not just experience a depression, it will turn in to a third world nation with few real jobs, at which point, the alleged inadequate number of employees paying into social security will be the least of its problems.
Good points.
And even now SS is secure into 2043. The screams to revise it are lies.
How DARE anyone suggest a corrupt and unmanageable government bureaucracy that gives our elderly mere pittance and a fraction of what they invested into it is not the best solution for retirement care! After all, what would our politicians do if they were unable to directly loot people's retirement funds?
Does the current economic crisis and the looming disaster to our pension funds and 401K's not give you even a moments pause? It damn well should.
"...It's difficult to recall anything quite so vile as watching hundreds of millions of dollars in taxpayer money flow to AIG executives. One would expect the Obama administration to do everything possible to prevent that from happening. Instead, they seem to be doing the opposite...."
- Gee, what a surprise. This is what happens when a shyster con-man who's nothing more than the candidate of Wall Street gets elected president. Every govt action or inaction seeks to defend the fat cats who are directly responsible for the crisis. The Obama administration is nothing but old wine in a new bottle.
As the WSWS puts it this morning, "...This is the real content of the Obama administration's economic policy. What is sacred is not law or contracts, but rather the principle that the wealth, power and privileges of the top one percent of American society cannot be touched, no matter how deep the economic crisis." (http://www.wsws.org/articles/2009/mar2009/pers-m16.shtml)
Why aren't the two million suckers (who braved the cold weather to attend Obama's inaguration) returning to DC to set up camp in front of the white house and capitol to protest?
Don't these two million suckers know that Obama is selling them down the river?
I think it's beginning to sink in, for at least some of the suckers. The more Obama sells them out, the angrier people will get. (There's even an angry comment on this very thread from someone who fiercely defended the Wall St con-man throughout the campaign.)
I understand Obama is making outraged noises again--claiming he will try to see if he can find a way to block the bonuses. Yeah right, who is buying that? The usual bone he tosses out--its insulting that he thinks he can go through the motions to placate and align himself with the people. But think if it was McCain making the indentical statements--do you think anyone would give him the same cover they insulate Obama with?
Ironically, it was the economy that gave Obama his edge over McCain--but I don't imagine McCain would be doing anything differently--they both serve the same masters after all. In fact, I am starting to be of the opinion that it might've been better if McCain won--then we wouldn't have to tiptoe around Obama's false images of a Democratic alternative and call it what it is. Instead the process gets dragged out waiting for others to deal with their shattered illusions of hope and change.
- Yes, that's all quite right. But it's precisely BECAUSE Democrats have this false cover of being an "alternative" to Republicans, and BECAUSE Obama is so skillful at tossing out these bones of fake "outrage," that the Wall St crowd saw an advantage in getting him elected in the first place.
You've got to hand it to the Wall St crowd. They're not dumb. They saw that Obama would be good enough (in a political theater sense) to fool enough of the people, to get him elected. And that he'd be skillful with his cynical comedy (feigning fake outrage etc), to keep enough people fooled, for at least a while, so that public anger could be more or less contained, or "managed."
As you rightly point out, if McCain had won, the actual policies would be pretty much the same -- but the "anger management" of the public wouldn't be nearly as good. Obama's shtick is similar to Bill Clinton's "I feel your pain" act. ("Oh, listen to him -- our president is so 'eloquent' and intelligent-sounding!") Obama is pretty good at theater. Nonetheless, it's only a question of time before the act will no longer be enough to stanch mounting public anger.
Sioux Rose
DAVE B: Interesting that you selected the "acting" angle as both men (Bill Clinton and Barrack Obama) are LEOS, and that is considered the sign of acting and show biz according to basic astrology 101.
"- Gee, what a surprise. This is what happens when a shyster con-man who's nothing more than the candidate of Wall Street gets elected president."
Exactly! This is what I was thinking during the primaries. After all, Wall Street financed a huge chunk of Obama's campaign. Wall Street/corporate America had a win/win election set up, even before the battle between Clinton and Obama was decided. Clinton, Obama, and McCain were all paid for corporate candidates, so no matter who won, the corporations were set up to win also and we were set up to lose, as usual. It's set up like this every election. The only thing that will put a candidate into office that truly represents we the people is publicly funded campaigns with a complete ban on corporate and individual donors. If we could get a publicly funded campaign system going, along with a ban on lobbyists, then there is a possibility that we could get not only a president that represents US, but a congress that represents US as well, rather than than being nothing more than another paid servant to the money worshippers. Until this happens, we will continue to have the best government money can buy.
Exactly what I was thinking.
Ex Goldman-Sachs governor of NJ, Jon Corzine threatens forced furloughs, if not layoffs--as if violating the union contract wasn't an issue at all.
Even worse, these self-entitled jerks are the ones who created the disasterous circumstances to begin with, now claim if they don't get their obscene bonuses, they're going to walk.
Let them walk! Where they gonna go? The unemployment line?
More evidence that Obama is a boy to the financial elite.
Go ahead and give the execs, their bonuses. However...as a condition of these bonuses, they must publish their full names and addresses in a full page newspaper ad that is printed in every major newspaper in the U.S. Perhaps that would change their attitudes towards their "contracts."
"Full disclosure" for future taxpayer payouts isn't good enough. Tell AIG that if it gives out those bonuses there will be NO MORE taxpayer bailouts. They can go find their own money or go bankrupt meeting their contract obligations. And those so-called indispensable employees can go do what they do.
It could not be more clear that we have 2 sets of rules. One to protect the rich, the other to screw the working class. And this time they are really rubbing our noses in it.
This is the first time I have been seriously disappointed with Barack Obama. I have not been delighted with some of his decisions, but have been willing to wait and see. Not now. Just whose side is he on?? Talk is cheap. Action counts.
We need a serious taxpayer revolt here. Enough is enough. Tell your Congress critters if they don't step up to the plate we will do it for them in 2010. And as far as I'm concerned if Obama doesn't change whose side he's on I will do what I can to make him a one term president.
I am furious.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
"but it does not mean that something must be done when high government officials get caught plainly breaking the law. What an oddly selective application of the "rule of law" this is."
Such as it is for members of THE UNITED STATES OF AMERICA, INC.
This is yet again another chapter in the story of the (now not so) gradual decline of the United States. Obama, if he wants, could get tough as buckshot with these greedy, cynical, unpatriotic bastards. He chooses not to do anything except shake his fist. Some of that "bonus" cash will be flowing right into his and other Democrats' reelection coffers.
[ _____ H e __ w h o __ i s __ t h e __ G O L D M A N _____ ]
[ ____________ S A C K S __ t h e __ R u l e s ____________ ]
.
Our update for 'He who has the gold, makes the rules '
If Obama becomes Oblysmal and refuses to move on criminality, we'll know that he's just dancing with the one ( Goldman Sachs ) that bought him to the dance.
.
It's past time to take back our banks, money and currency from the financial moronic thieves and extortioners ( FED w/o RESERVE included )
Namaste
Sioux Rose
Right on! Man with GOLD SACKS the nation! There's so much of this... although my favorite remains Neil KASHKARI, a/k/a cash & carry, man born to be the bag man for the big banks. (Then we can go back to Henry with something to Hyde, Oliver North by Northwest, Madeleine All-bright on the Western Front, Bob born to delay, etc.)What's in a name, indeed...
Don't forget Bernie Madeoff with the money. Can you do something with Dick Fuld? If someone were to write a modern version of "School For Scandal", they wouldn't even have to think up the names.
Joe
There are many firms besides AIG, Goldman Sachs, Bear Stearns, Bank of America, Citi, etc., which are considered "too big to fail". It is now time to break those firms up into smaller, independent companies before the current firm appears to be on the verge of failure. This should be done NOW, also, with the likes of AIG, Citi, GM, Ford, Chrysler, GE, etc. If they are currently "too big to fail" then let us ensure that once bailed out this time, they can not fail again thus requiring yet another bailout because they are "too big to fail".
Break up GM. Break up AIG. Break up Citi. Break up Bank of America. Break up Goldman Sachs. Break up GE. Break up Chrysler. Break up Ford. In fact, break up every single firm in the top half of the S&P 500 so that they CAN fail without causing cascading failures throughout the national or world economies and requiring a taxpayer bailout.
This has to be done or the American taxpayer will surely at some point be required to bail out these and other firms again, or in the case of some like Ford or GE threaten failure for the first time. Not one more bailout cent until these firms are first broken up.
And not one more bailout cent to the likes of AIG until ALL derivatives contracts regardless of whether they have yet been closed out and paid off are declared null and void and further similar contracts made illegal, not just Credit Default Swaps, but also put and call options on stocks, interest rate derivatives, etc. So you bought a credit default swap and you are owed money on it. Tough shit. So you bought stock option puts or calls and you are owed money on it. Tough shit. These result in nothing but cash settlements created out of thin air and they have NO contractual attachment to the so-called "underlying asset".
One need not hold a stock to write a new, or sell an existing, or purchase an option (derivative) on that stock. Its the same with credit default swaps. One need not be holding a "security" consisting of a thousand bundled mortgages in order to write (bring into existence for the first time) or purchase or sell a credit default swap. These are nothing more than side bets on the price movement of an underlying asset and they are absolutely fraudulent, though legal. They are no different, absolutely NO different, than illegal betting on sports where the game in progress is the "underlying asset" upon which the illegal wager rests.
Providing taxpayer bailout money to AIG so that it can cover its huge credit default swap losses is not one bit different than taxpayer bailout money coming to me to cover my losses in Las Vegas or even my losses to Joe the Bookie down at the corner cigar store. We taxpayers are being royally screwed.
Enough is enough damn it.
ekaton
You and I seem to be channeling (see my post just below), drawing the same sorts of policy distinctions, and the same general analogy, between investment risks and gambling risks.
Bill from Saginaw
To big to fail really translates as, to politically connected to have to worry about failing.
I certainly think that if these talented folks don't get their millions guaranteed by their ...CONTRACTS...they should certainly leave and take those better paying jobs at the other companies. There are so m many hiring right now.
Oh....these are the same talented folks that put AIG in the ditch? Lost Billions and bankrupted their company? By all means we must retain that talent!
When the first dollar from American citizens came thru the door these contracts were null and void. Time to decide if you are an American or not Mr. President. Time for many people to decide if they are Americans or not. There are only two sides going forward, pick one.
"Oh....these are the same talented folks that put AIG in the ditch? Lost Billions and bankrupted their company? By all means we must retain that talent!"
EXACTLY!!
ekaton
Orwell is turning in his grave right now. To call these people "talented" opposite to what they are, is exactly what the man warned us against.
Cheers,
As I've said before, we're watching a club of Ivy-League grads (which includes our president) covering each others' asses. There was never any intent on Paulson's part to help anyone but his buddies at GS. Clearly, Geithner, Bernanke, et al., maintain the same value system.
q
So in view of that, what would you now say about those who criticized Obama from the left during the campaign? Leftists, left-leaning independents, Nader supporters, & Greens said repeatedly last fall that Obama was basically the candidate of Wall St. They pointed out how quickly Obama jumped to support the bailouts last September, & warned clearly of the very dangers described by Greenwald's article.
Wouldn't it be fair to acknowledge that these Left critics of Obama were exactly right -- & that Obama's apologists were completely fooled by his vacuous "Hope and Change" shtick?
I blame Bush and AIG. Not Obama.
"He has told US Treasury Secretary Timothy Geithner to "pursue every single legal avenue" to block the payments.
He added he was "choked up with anger" over the issue. "
Obama is trying to save our economy from a catastrophic collapse and AIG is sabotaging his efforts with their greed.
Keep chugging that Kool Aid. Obama is an employee of Goldman Sachs.
Yeah but he sits on the boards of AIG and Citi.
Joe, as I've told you before, an essential requirement for discussing these things intelligently is being able to distinguish between theater & policy.
Obama saying he was "'choked up with anger' over the issue" is THEATER. In contrast, Obama appointing Summers & Geithner; Obama consulting closely with the likes of Robt Rubin & Paul Volcker; and Obama providing trillions of dollars to these bankster criminals -- all that is POLICY.
See the difference?
No one claims Obama doesn't know how to do good theater. The problem with him starts where the rubber meets the road.
Theatre is exactly all it is.
And, like many attorneys, he is good at it.
There is a chasm of 'hope' between his words and his actions.
ekaton
What new laws has Obama, and the Democrat controlled House, and the Democrat controlled Senate, passed to prevent recurrences of AIG, Citi etc?
An honest banker or Republican has a stake through its heart and a brick wedged into its dead jaws.one old atheist
Good job giving them so much money LIBERALS!
Let's face it. LIBERAL DEMOCRATS passed the porkulator bill. LIBERAL DEMOCRATS in office today do nothing to revoke or revise it. LIBERAL DEMOCRATS refuse to prosecute the previous administration for its crimes. LIBERAL DEMOCRATS continue to fund this banker Mafia's adventures with our tax dollars and our childrens' future.
WHO REPRESENTS US?! Is the US government really representative of the will and needs of its people? Does it need to be abolished and replaced with a truly representative democracy?
The US only permits 2 parties. Though these 2 use a different rhetoric, & appeal to different groups of voters, they're close to identical on all issues pertaining to economic & "national security" policy. When one party fucks up, as the Bushies so manifestly did, the only thing voters know how to do is vote for the out-of-power party.
At best, this can only result in bringing in a party that's nearly the same as the one that was just kicked out.
WHO REPRESENTS US?!
- Neither of the 2 big-business parties. 97% or so of the population is not represented by government.
Is the US government really representative of the will and needs of its people?
- No, obviously not.
Does it need to be abolished and replaced with a truly representative democracy?
- Yes, of course. That very idea is explicitly set forth in the Declaration of Independence. But rather than take measures to carry out such abolishment & replacement, most lazy and cowardly Americans prefer to believe in a snake-oil salesman who comes prancing on a stage promising "Hope and Change," at the same time that he's giving trillions of our money to the criminal banksters, continuing Bush's wars, & defending Bush's henchmen.
Hi DaveBronstein
I used to wonder how germans under Hitler could in any way justify the mass murder of so many? And, then actually carry it through. Having grown up in the USA, I now know. The elites, are smarter, more ruthless, and have more resources than the "cowards" you speak of.
Though I agree that Americans are cowards, overall they are deeply, and eternally manipulated/indoctrinated.
Cheers
I totally agree with you.
No one seemed to mind when Karl Rove declared the GOP the leading party for all eternity and set out to prove it. What in the world happened?
Dammerung: "WHO REPRESENTS US? Is the US government really representative of the will and needs of its people?" And yes, "LIBERAL DEMOCRATS continue to fund this banker Mafia's adventures with our tax dollars and our childrens' future." You see, we have a one-party system (The US Capitalist or US Business Party -- whichever you choose to call it) w/two factions called democrats and republicans with only slight differences between them, and they represent the interests of the privileged minority (the capitalist class) and not the interests of the people who actually do the work and create the wealth. They are bloodsuckers who live off of the backs of working people. I think it was Thomas Jefferson who wrote (I'll paraphrase) WHEN A GOVERNMENT NO LONGER REPRESENTS THE INTERESTS OF THE GOVERNED THEN THAT GOVERNMENT SHOULD BE OVERTHROWN. I guess Jefferson was a radical advocating domestic terror!
The only rational, real world justification I can think of for AIG or the federal government to even contemplate paying bonuses to any of the people involved in AIG's Financial Instruments scams is the often-repeated claim that these credit default swap documents are so complex, and so esoteric, that nobody outside the masters of the universe who created this exotic hedge market can even understand them, much less coherently place a current value upon them. There is some plausible merit in keeping folks around (at least temporarily) who know where the bodies are buried.
Glenn is of course absolutely correct about the various legal theories available that modify the sanctity of written contracts. Also, the comparison between GM discharging its collective bargaining committments while AIG honors its corporate performance bonus agreements is the overriding hypocrisy in play.
I still believe, from a federal policy standpoint, a distinction should be drawn between mortgage backed instruments that were bundled up and sold by Wall Street and the credit default swap instruments that AIG facilitated.
Arguably, there is a legitimate public interest in stabilizing the first category of debt based financial instruments - there are real people and real businesses, in real houses and real stores, at the bottom of the pyramid. Churning this flow of credit, extended to actual consumers followed by bundling and quick resale to big institutional or international investors, does enhance and grease the banking system's ability to generate new capital which benefits the economy in general. Sure, the fox was guarding the henhouse for the last eight years, and there's a big need for regulatory reform. But let us not throw the baby out with the bathwater.
Credit default swaps, in contrast, were never anything but the big rich boys trying to hedge their bad bets of yesterday and diversify their investment portfolios with one eye on the house of cards these savvy, sophisticated investors knew was going to collapse someday. That's why they bought insurance from AIG in the first place. They were all too smart by half.
That whole exotic credit default swap market in colloquially (properly) labeled "toxic assets" had zero social utility all along. The federal treasury should no more buy up or honor these troubled assets than we should bail out street numbers bookies when they fail to lay off.
Let the guys caught holding credit default swaps when the music stopped and the cake walk ended simply stew in their own juices.
Bill from Saginaw
If paying them a bonus because they are the only ones who can fix it, is a rational argument; then Bernie Madoff should be sunning himself on one of his yachts, offshore of his Palm Beach estate.
Close, but no cigar. Good comparison, though. Anybody besides me wonder how it came to be that for weeks and weeks the press was reporting that Mr. Madoff was "cooperating with federal investigators", but when he showed up and pled guilty in court as charged last week there was no deal in place?
If Bernie Madoff were to come clean, help locate and retrieve as much of the stolen funds as possible, and made himself available to help law enforcement officials identify and prosecute others involved in his Ponzi scheme and its related money laundering, then in my opinion he should get some leniency in exchange for his cooperation. After all, this is how the federal government has dealt with major drug dealer kingpins and even upper echelon Mafia hitmen who have turned state's evidence in the past. I don't see why white collar criminals should be treated any differently.
Bernie might not be able to trade off 150 years in prison for a sunny float into retirement on his yacht off Palm Beach. But I'd give him a BOP placement with a tennis court, and a lesser term of years, if he named all the names and helped get some of the ill gotten gains disgorged from the other perps.
Bill from Saginaw
I'm guessing that Bernie's deal with prosecutors was that he would be the only one in legal trouble, and that his co-conspirator family and friends and employees remain uncharged. The scheme was far too large and complex for one man alone to have perpetrated. I mean, after all, just for one small example, did Bernie himself write the computer programs used to simulate the phony profit and loss statements, the monthly brokerage statements, etc.? The programmer could not have been unaware of the reason for his assignment.
ekaton
"The programmer could not have been unaware of the reason for his assignment."
Not necessarily. Programmers often aren't all that familiar with the stuff, with the field / subject, they are paid to write code for. It is why bugs in code often occur, because they don't know much about the subject that they are coding, and then misunderstand what the client wants.
You, sir, are full of hot air. You are referencing an animal often referred to as a "coder". Let me ask you this, then, oh wise one. Do you think Bernie Madoff wrote the system specifications and the lower level program specifications? Okay, oh wise one, the programmer was innocent. What about the systems analyst? Did Bernie do that job? Now, please tell me the responsibilities of the systems analyst and how that individual could not have known the purpose of his assignment. And let me ask you this, while I'm at it. How many systems have you designed, coded, implemented and trained those who would be using the system?
The "programmer example", possibly not the best example I could have chosen, was simply to illustrate the idea that so much complexity had to happen to pull off this massive fraud that old Bernie could not possibly have done it all himself.
And, thank you so much for defining for me the work I have done for the last thirty years.
d.k.shaw, systems designer, systems analyst, programmer-analyst, programmer, coder, trainer and chief cook and bottle washer.
"Arguably, there is a legitimate public interest ... "
I agree with the entire paragraph. At least the "mortgage backed securities" also known as Collateralized Debt Obligations, or CDO's, are backed by real property whose current actual value is at the crux of the current debate. There are arguments over whether to "mark to market" although supposedly the current market value cannot be determined, or to write down the inflated values to actual values. But at least real land and real buildings back the CDO's.
Taxpayers should not be required to pay off bad bets in the form of Credit Default Swaps using the collateralized debt obligations as "underlying assets". AIG is currently liable for over $2 Trillion dollars of swaps gone against them. And their current acceptance of over $160 billion in taxpayer dollars will not even scratch the surface as far as "bailing out" AIG.
And, now for the punchline. The unit of AIG responsible for the $2 Trillion in swaps being foisted onto U.S. taxpayers is based in London. I gotta tellya. Thank god for the bottomless pocket of the U.S. taxpayer who apparently has the ability to remunerate financial institutions in other countries.
(Bill, you are much more articulate than I, but yes, we seem to be on the same wavelength.)
ekaton
If any one elected person in our government accepts one penny of contributions for campaigning or any other form of compensation from any one who has received bailout money of taxpayer dollars, the banks or the companies who insure them or their lobbyists, they should be immediately dismissed, impeached or arrested for contributing to this vast scam that has left so many citizens broken. No one wants their taxes used to bail out companies too big to fail and then find that the money trickles back down to the elected officials who do not have the guts to stand up to these crooks in the first place. They themselves should make this very clear by intoducing and passing legislation to this effect, proving to their constituients that they can regulate themselves even if they can not regulate others.
>>If any one elected person in our government accepts one penny of contributions for campaigning or any other form of compensation from any one who has received bailout money of taxpayer dollars
Barack Obama, Goldman Sachs
Point set match
" ... for contributing to this vast scam that has left so many citizens broken."
Yes. Let's not forget that literally millions of real people, many of them now living in the streets or in tent cities are suffering so that an AIG or Citi or Bank of America executive could purchase a fourth home and another new yacht.
ekaton
Are we sure that Timothy Geitner knows where his office is? He doesn't seem to have a clue about anything else.
Those folks don't count by the way, they are just American citizens who have been mugged and robbed thrice in 6 months after being robbed and mugged the years before.
I'm getting sick and tired of those in the financial industry getting what seems like the upside to everything, while we get the downside. Time to turn the tables, guys!
Do you mean time to turn the tables of the moneychangers inside the temple.
Didn't that happen once before at some distant point in the past?
ekaton
The U.S. economy has been looted. The perpetrators not only run the show, but are brazen enough to openly reward themselves for their criminal behaviour.
AIG was heavily involved in offshore banking and tax evasion schemes. It has deep links with U.S. intelligence agencies, and as such can fairly believe any official investigations will be weak and half-hearted. The investigative journalist Lucy Komisar has done some outstanding work on these issues. http://thekomisarscoop.com/
These scandals are part of a continuum reaching back at least into the 80's, and are indicative of a deep bipartisan corruption.
AIG's argument that the bonuses are needed to retain 'good talent' remind me of the argument John Thain used when he ran Merrill-Lynch before it ceased to exist. It was aired on The Daily Show with Jon Stewart. Jon Stewart's response was gratifying. He yelled, "TALENT! YOU HAVE NO TALENT!"
We should outsource those CEO jobs. I am sure there are some very talented people in India who would take the jobs at a fraction of the pay.
Joe
This is the same government that rewards KBR with a new $35 million CONTRACT "to design and build a convoy support center at Camp Adder in southern Iraq that includes a power plant and electrical distribution center," after 13 US soldiers were electrocuted due to 'faulty' electrical work performed by the very same KBR.
Maybe the problem is that We The People have a different definition of "performance bonus" than those reality-creators supposedly representing WTP...
Credit default swaps used to be illegal gambling under most State Laws until Congress in its wisdom pre-empted these State's rights in the Commodity Futures Modernization Act of 2000.
The government needs to separate this gambling, while legal, from the core functions of banking and clearly state that they are not on the hook for gambling debts. Surely gambling debts are not enforceable obligations of the Federal Government even in these peculiar times? A complete takeover of AIG and accepting liability for insurance but not gambling would have had this effect. Unfortunately the Fed has already paid off some gambling debts and Geithner is looking at a black hole that will swallow government.
this just in:
http://www.nytimes.com/2009/03/17/us/politics/17obama.html?_r=1&hp
(headline): Obama Orders Treasury Chief to Try to Block A.I.G. Bonuses
"White House officials said that the administration is not looking to take A.I.G. to court to stop the company from paying out the bonuses. But they said the Treasury Department would be trying to figure out what they can do to block A.I.G. from making the payments within the legal confines of A.I.G.’s contractual obligations to the executives."
-----------------------------------------------------------
good article g.g., and spot on about the auto industry.
obama is such a HERO for "not looking to take AIG to court." thank God the DOJ and SEC will not be forced to do their jobs and reveal to the citizenry just what the hell is going on w/his bailout by dragging AIG into court. voluntary self-policing of the answer for everything! the sense of shame these executives will feel at obama's rebuke is surely the corrective the market needs. (what? AIG has no shame? what a cynic i've become!)
obama is calling for voluntary renunciation of bonuses precisely so his admin won't have to address these issues in court (where oh where have we seen him do that before?) a true HERO for our times. undoubtedly he will be beatified as the saint of ass-kissing and cowardice.
Here's a laugh:
"Obama Orders Treasury Chief to Try to Block A.I.G. Bonuses"
Obama Orders Treasury Chief to Try...lol
YEP!
Bonus? Hell no! Put them in jail, send them to Gitmo.
The biggest scam ever was the subprime mortgage business. Credit was so easy that anyone with a pulse was given a junk mortgage, these, in turn, were shoveled through the doors of the banks and. Next, our best and brightest bankers and credit swap derivative specialists at AIG prevailed upon the rating agencies to label the junk as AAA securities. These “troubled assets” were then sliced and diced, collaterized, leveraged 30x and sold around the world as if they were gold. The business was such a money machine that it was impossible to say no to it. When the housing bubble burst,and money stopped coming in the door thus ending this ponzi scheme, people lost their life savings, and countries went down. It seems to me that knowingly selling junk as if it were gold is fraud. Trillions of dollars were scammed and yet no one is busted?
Busted? They are still pushing easy credit as the pill for all our ills.
We are a nation of laws--Laws that protect the rich and screw the poor. Those are the only laws we respect. The sooner we poor bastards realize that the sooner we may be able to do something to change these laws.
And we don't torture either!!
Too bad all this erudite discussion doesn't mean shit since the fuckin money is GONE.
Does anybody here think that Americans didn't know that the bank bailout was a big mistake? My congressman's office actually admitted to me that constituent calls were running 80-90% against, and we all just got the big Bah Fangu from Congress.
Ya wanna write an article about something worth reading, tell me how to get that money BACK.
If our representatives don't seem to understand the soap box or the ballot box, what's left?
Thanks, Mr. Greenwald,
This maybe an unwanted epigraph, or epitaph, to this administration,
"-- but the fact that Obama officials are also insisting that nothing can be done (even while symbolically and pointlessly pretending to join in the populist outrage over these publicly-funded "retention payments") is what is most notable here."
This country has become a nightmare beyond Orwell or Dostoyevsky, it is the broken mind of its people slathering itself with the medieval belief of Christian
superiority and the idolization of minor technologies to the point of absurdity, yet allows real science to wallow in the leftover garbage of drug companies and weapons whores. Our dreams are black walls of death as we carry our faceless skulls on our necks.
Dammerung,
Rabid dogs bite.
This is a group of rabid dogs who run this political system. These rabid dogs have already eaten their families. Their fevered minds believe Darwin was writing about their genetic superiority as a metaphor for their existence.
In actuality, they are vestigial fruit flies whose only hope is wealth to protect them from the reality that their genetic material is doomed to extinction. The rabid grasping and screaming of the dog before a bullet puts it out of its misery. History repeats itself,
Grow a garden...
A "Nation of Laws", that has not kept a single treaty signed with the Native Peoples, certainly should keep the 'contracts' with the "other thieves"--
Good luck America, you really need it.
I don't know why everybody seems to cut off the end of the phrase.
It's supposed to be "A Nation of Laws-- Circumstances Permitting".
· Yr Obd't Servant
reminds me of that scene in "the mission" (apropos of the native american issue, btw) where the fat, vicious slave trader rips off his own wig and storms out, yelling, "you have no respect for PROPERTY." totally indifferent to the life & property he himself is plundering (not unlike AIG).
when it's to their advantage, the powerful are all over the sanctity of property and contract law. when not to their advantage, out come the lawyers, the bribes, the threats, the guns......
In the USA everything is for sale.
right, top of the for sale things= politicians.
Only the most highly indoctrinated (unfortunatley, most of the U.S. population) believes this bullshit re/"a nation of laws." Howard Zinn's book A PEOPLES HISTORY OF THE UNITED STATES should be part of the manditory curriculum in every school throughout Amerika!
Glenn, I totally agree with you.
However, the 'good news' is that AIG's imperial and elitist arrogance may well be the straw that brakes the camel's back and starts the American people looking at "Capital Reform" the same way other oppressed peoples have looked to "Land Reform".
Today’s Sunday Morning ’talking-head’ shows caused me to think of a simple, effective, and ‘tried and true’ solution to our financial crisis.
All the Sunday talk-heads; Summers, Frank, Cantor, McConnell, Zandi, George Will and others said the same stereotypical things:
1. More excessive bonuses to AIG execs is a bad thing.
2. Non-transparent ‘pass through’ of our tax funds to AIG’s counter-parties is a bad thing.
3. Items 1. and 2. enflame popular anger, AND they deprive small, ‘main-street’, job-creating businesses of scarce ‘capital’.
4. Sen. Cantor said that the job creating engine of small business is “starving” for ‘capital’.
5. Corporate law (contract law) takes precedent over Constitutional law --- and makes it impossible to break or abrogate AIG’s payments and save ‘capital’.
These beliefs among ruling-elite spokespeople on TV implied that there is no solution to the status-quo, when there is actually a simple tried and true solution for the people:
1. When people in other societies who depend on the scarce resource of ‘land’ to grow the ‘food’ for their Sunday Breakfast (and feed their children) run into an absurdly inequitable hording of that essential resource (land to produce food), the only normal (and peaceful) solution is called ‘land reform’.
2. ‘Land reform’ has been successfully used by many countries to insure against and prevent ‘starving’ the most job-creating, and populist element of their economy ---- people. [This has universally been used in many countries far less modern, intelligent, sophisticated, and democratic than ours portents to be].
3. In a multitude of countries in which the ruling-elite controlled the government, the laws, the media, and the resources to an extreme degree, ‘land reform’ has been the solution to the terrible problem of the elite hording all their wealth in art work, jewels, mansions, foreign banks, and land, all of which became egregiously unproductive for ‘food’ to feed the people.
I’ll leave for another time the too-obvious analogy of ‘land reform’ and ‘capital reform’, but hope that many readers have the same ‘aha reaction’ that I did; that the essential resource of ‘land’ and the essential resource of ‘capital’ ---- can similarly both be fixed with ‘reform’.
Land reform is defined by Wikipedia as “a government-initiated or government-backed real estate property redistribution, generally of agricultural land, or be part of an even more revolutionary program that may include forcible removal of an existing government that is seen to oppose such reforms.”
What the ruling-elite ‘corporate financial Empire’, which controls our country behind the façade of its ‘Vichy’ sham of democracy, most needs is ‘capital reform’ --- which I would define as “a government-initiated or government-backed capital redistribution, generally of investable capital, or be part of an even more revolutionary program that may include forcible removal of an existing government that is seen to oppose such reforms.”
The focus of ‘capital reform’ would first and foremost be targeted at ill-gotten capital exploited and acquired through fraud and/or looting of public ‘commonwealth’ resources, public taxes, and deceptive corporate subsidies or bailout shams.
This class of ‘capital reform’ could easily be funded through ‘claw-back’ restitution and disgorgement of government and ‘commonwealth’ funds which had been stolen either directly or by the modern guileful deceit of ‘negative externality cost displacement’ get rich quick schemes, as recently practiced by AIG, Merrill Lynch, Bank of America, CitiGroup, Morgan Stanley, Goldman Sachs, and dozens of other corporate looters.
Special ‘capital reform’ courts experienced in the guileful gaming of markets through intentional ‘negative externality cost dumping’ schemes would be staffed with forensic auditors, SEC investigators, as well as financially experienced judges to review and unravel the new class of fraudulent schemes whereby ‘negative externality costs’ such as ‘debt bombs’ have been intentionally planted in the public financial marketplace in order to fraudulently profit from the ‘sale of’ unsecured, uncollectible, toxic, fraudulent, and extremely risky financial instrument, which can be proven to have been designed to fail --- thereby leaving the government and/or tax payers threatened by the deceptively planned ‘negative externality costs’ of cleaning up such financial pollution.
Just as the EPA brings suit against industrial polluters where a proven polluter must pay for the physical (air, water, oil, etc) pollution under the “polluter pays” ruling, the convicted financial polluter would have to pay for all damages caused by their financial pollution negative externality costs.
In fact, a government and citizens’ protection agency to investigate and bring suit to these special financial crimes courts could well be termed EPA II (the Externality Protection Agency).
Alan MacDonald
Sanford, Maine
Sioux Rose
AMACD: Good post. I think your solution is (or will at one time become) plausible (and may then become implemented).
Sioux,
Sorry, I pressed a key before looking.
The comment is fine. My fumblefinger mistake.
My deepest apologies to Sioux Rose.
Sincerely,
Alan MacDonald
If it is necessary to retain these "executives" in the financial products division of AIG to unravel the complex financial products they have created and left as ticking financial timebombs, rather than pay the bonuses they expect/demand, give them financial detention, and if necessary, waterboard them a bit to encourage them to help decipher these financial products they have created and clean this mess up. Not to worry, waterboarding isn't torture, it's just a cost effective means of encouraging cooperation.
Please Contact the board of AIG AND LET THEM KNOW HOW YOU FEEL 877 244 2210
http://phx.corporate-ir.net/phoenix.zhtml?c=76115&p=irol-govboard
A great qoute form the Ny times comments (Josh from Santa Barbara,Ca.)
"What could you do with $170,000,000,000? Well, that's what paid last year in Canada for medical care for everyone.
There's other things too, that such money could be used for. For example, for $250,000,000, Algiers got a Desalination Plant that will provide enough clean, safe, sustainable, fresh water for a million people a day. For the money we paid AIG, that they used to lose more money and fill the already full coffers of their executives, we could have built 68 of these plants in Africa, to provide water for 68 million people who don't have a renewable source of fresh water. Would that not be more productive more than buying a another new Bentley for an AIG executive?"
THANK YOU!!! It's really helpful to put it in this kind of perspective.
Really shows what a corrupt, sick nation we are.
From the white paper, it looks as if there are individual contracts for only $6MM of bonuses. The other $159MM falls under the retention plan. AIG's argument is that the plan represents a legally binding contract. I call BS.
The moment they took taxpayer money those contracts should have been null and void. Unfotrtunately we have a bunch of dimwits in Congress and this administration.
Secondly, since they weren't fulfilling their contracts with others, their contracts don't mean much.
And lastly, it hilarious to see the type of pathetic cowardice displayed by these executives. Lose billions...no problem, don't honor contracts, no problem, Corporate malfeasence, no problem. But I have a CONTRACT! Pay me for my corrupt behavior.
And when is the last time anyone saw set bonus's instead of performance bonus's? That is salery if its not based on performance. Wonder who drew that up? Last years just like it? Oops...no it wasn't!
I don't think 'dimwits' I think genuine, bonafide crooks.
I cannot argue with that.
I wish I could agree, I really do, but then I think about the hundreds of thousands, if not millions, of jobs here and abroad that would be so greatly affected by such nonactions.
It looks as if it will happen anyway. It looks like delayed pain.
tnmoderate writes, with haughty & undeserved confidence,
"What a load of crap. ...If they owed me a bonus and didn't pay it they'd see me in court and I'd almost certainly win."
Actually, tnmoderate is the one spewing pure crap here. If he grasped the basic point of the article, he'd understand that whether or not one wins in court depends on a great deal more than just the theoretical "justice" of one's case. If you're a rich banker, and you sue someone for breach of contract, you get different results than if you're just an ordinary working stiff. In the USA, rich people get a different brand of "justice" than everyone else.
If you're a US president, you can commit mass murder without ever even facing charges. If you're an honest person who's in position to expose wrongdoing in high places, you can easily wind up dead or in jail. The abstract "justice" of your case often has less to do with court verdicts than your social position.
maybe you should change your name, moderate is false advertising in your case.
Prove it.
Here is an idea...if you take your bonus, consider it severance pay...
the government forces unions to renegotiate their contracts all the time.
"The only means of strengthening one's intellect is to make up one's mind about nothing, to let the mind be a thoroughfare for all thoughts." - John Keats
GOOD COMMENT!
This administration is shaping up to be one of the shortest in memory.
Not sure how short but looks to be as deceptive as the previous one. I'm bout done with any defense of obama and his band of crooks. Too hell with them all, none speak for the people.
"Too hell with them all, none speak for the people."
That was apparent in 2006!
And one of the shortest memory.
And with one of the shortest memory.
Keep in mind that Bush has put in place (with the willing assistance of Senate Democrats) a Supreme Court that places a higher value on contract law over Constitutional law.
Nice try, abouthechild, but I don't think AIG cares how we feel. They've got Obama and Geithner in their pocket. And I'm sad to say this because until now I really liked Obama. It's looking like I was wrong to hope he would do the right thing. His hoping they will make nice and not blow our tax dollars on undeserved bonuses is not the right thing.
I said all along I was willing to take a chance on him - once. If he doesn't pull this poker out of the fire, he blew it with me, and I suspect many Americans. My objection is not about bailouts, I don't know enough about the world economy to say what we need to do. It's with being unwilling to stand up to this corporate scum who created this mess. And Congress appears equally unwilling to stand up to them. After all, Congress wrote the laws deregulating these crooks and one president after another signed them, including famously, Bill Clinton at Larry Summers' urging. What did they expect to happen? What does anyone expect to happen when you unlock the safe and walk away from it?
We're just the suckers who keep emptying our wallets into that STILL unlocked safe. If Obama wanted to, he could refuse to ask for any more money until Congress passes laws protecting that money. So why isn't that happening? So far it doesn't even appear to be on the table.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
Hi,
Honestly I would never think AIG cares about us and I have been suspect of Obama when he first ran and said he took no money from lobbyists but he certainly took it from their law firms and he began telling us how clean coal is . . .
However I just think AIG should feel the heat in every conceivable direction including calls to their offices. I'm not so naive to think they will do the right anything- short of a sentence and jail time - I just don't think they should be able to go cosy up at the office that's all.
I feel we are (in general) so well trained here in US - we could make it a little less convenient for day to day operations say . . . and also I feel slightly better when I do things like that. Of course I called /faxed to the white house on down.
My Congress woman's aide answered the phone and said "AIG right ?"
I think the main thing ultimately is to keep re localizing ourselves (ala Catherine Austine Fitts - solari.com /transition towns /perma culture /local currencies ect/ latin america certainly is doing some very innovative things and then there's the state of the state of Nebraska Banking. . .)
tnmoderate you really are deluded. As a former Union officer, I can tell you, the companay holds all the cards. Even if you have very clear and uncontested contract language, all it takes is one slimeball to challenge or simply ignore the contract language. Then the waiting and $$$ game ensues. Usually the corporations win through attrition of the aggrieved party.
In any event, why is it the Unionised workers had to give everything back? I saw no provisions in the auto bailout limitng CEO compensation.
The economy will never recover with the boots of the elites crushing the throats of the workers.
When is the Revolution and where do I sign up?
If you want the money back, tell your Congressperson to enact a 100% tax on the bonus. Simple...otherwise we have to get lawyers to game the system and that might mean that all the money goes to the lawyers.
JOIN THE MOVEMENT FOR A 100% TAX !
Just more of the same BS from the rich. Did anyone here that loudmouth Limbaugh actually defending these bonuses today? Boy, when it comes to protecting his rich buddies, that guy is a real steamroller. Too bad he doesn't have the same compassion for the average working guy.
Chairman Kon (aka "Big Kon Kahuna")
TO DO LIST March 2009:
Monday- Tank the stock market. Call Jim Cramer.
Tuesday- Buy up the competition.
Wednesday- Fly to washington to request more money to buy up the competition.
Thursday- Bust some unions. Blame financial troubles on people without finances. Call Jim Cramer.
Friday- Pick one faithful hedge fund manager employee to throw to the wolves for scapegoat jail sentence. Play poker.com with other peoples money. Leave for weekend ski retreat in Vail.
Next week, start at top of list and repeat.
Brilliant and elegant, rosemarie. It's too bad so many Congresspeople are ethically challenged. But maybe we can scare them. Certainly they're getting uneasy at the growing anger back home.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
The well-being of the country overrides the "contracts" that were drawn up in a vastly different financial world. Today we must weigh the consequences of going through with the contracts AIG made, or begin to do business with the higher good in mind.
To see that the renegotiating of the contracts of auto workers were part of the auto bailout, but those of the executives who are sinking our economy are sacrosanct is a blow to the American Electorate's stomach. Wanna see a bailout?
>>Oh....these are the same talented folks that put AIG in the ditch? Lost Billions and bankrupted their company? By all means we must retain that talent!
The problem is they ARE talented. I would suggest that those responsible and those
who looked the other way as AIG bankrupted made very good money.
Remember all those traders that pulled the same at Enron? Yes they bankrupted the company but made a fortune doing so.
The underlying problem here is that if one has the TALENT to work the scam, one can make billions of dollars and someone else will foot the bill.
These are the kinds of people AIG wishes to keep and reward and by extension are the kind of people the taxpayers of the United States of America will reward.
Shysters as my dad used to call them.
Your Dad was far too polite!
From the beginning, we all noted the contrast: insistence on concessions from unions as preconditions for the auto bailout vs. no conditions for executives in the banking and insurance bailout. The bailout could have been written to overturn the secret contracts with executives. Look how the World Bank and IMF historically have required concessions from national governments when they gave loans, even to the point of starving the poorest. But Congress will not touch the sanctified behinds of the elite.
So... here it is, just as planned. Outrage? I am not impressed. Congress could have done something up front. They are useless toadies.
Joe
I would love to have a job where no matter how bad I messed up I would still get my million dollar bonus.
"Hope" and "Change" from our pockets to theirs. Many interesting comments.
Last Tuesday, I had the honor of seeing and speaking to Cynthia McKinney again, the candidate I voted for last November for President of the United States. Too bad she didn't win. At least she had the sense to change political parties. As long as this two-party system continues to control everything, the average person will continue being shortchanged in a standard of living which was once enviable around the world.
They are closing schools, laying off teachers, we still don't have universal healthcare, the Republican Crime Family and their collaborators in the Democratic Party will try and squash the Employee Free Choice Act, but there is unlimited money to give to the Wall Street manipulators, and the death and destruction industry, aka, the Pentagon.
I watched "helicopter Ben" Bernanke on 60 Minutes last night and the man didn't blink or look away from the sheepish interviewer. They've got the art of deceptive answers down to a thespian art form. Do you remember Greenspan's apology a few months ago?
If we had instant run off voting, where people vote for a first and second choice, people could vote for a third party candidate without worrying about their vote being wasted. Of course we will never get it until we get outraged enough to get the politicians attention. When they realised how outhraged we were about AIG they started falling all over each other to be the one to fix things. We have to remember that.
I am an advocate for IRV, yet I must speak to this thought that voting for an independent or a third party candidate is somehow wasting your vote.
What do you consider to be the purpose of casting a ballot? Is it, as you seem to believe, a forecast of who will win the election? Do you vote just to brag that you cast your ballot for the ultimate winner of the race? Do you believe that voting for someone who will be only marginally different from the other candidate to be an intelligent way to express citizenship? How do you hope to achieve dramatic change when the two parties for whom you limit your choices both are wedded to a system and will resist the necessary changes we so desperately need?
I cast my ballot for the candidate that best expresses my own vision for this country. I vote , not to settle, but to express my political views and wishes. I believe that a wasted vote is one for the establishment, not, as you suggest, one for other than a duopoly candidate. Look at it like this for a moment please. If we continue to vote blindly and automatically why on earth should the political machine need to change anything?
I would add only that the outrage expressed, and rightly so, only succeeded in forcing crocodile tears from our elected shills for AIG. The time to consider how the money should be spent was before giving it away. All the talk today is a sop to the public and will result in little of value.
Can you stomach seeing Barney Frank call for the resignation of Chris Dodd and Mr. Geitner? Your point made and doubled.
It's time to bring back tar and feathers, and perhaps line Wall Street with stocks (the wooden kind with head and leg holes). That would be incredibly satisfying.
It may be
http://www.talkingpointsmemo.com/archives/2009/03/timebomb_1.php
But is surely
http://www.globalresearch.ca/index.php?context=va&aid=10265
Bankruptcy is the last gasp, in any case. The triggering of Trillions of debt coming due will cripple the World. The last year will look like a picnic and the Great Depression will look like good times.
They are terrorists! They are disrupting our way of life and are threat to our livelihoods. We should use the Patriot Act and Homeland security to raid, freeze their assets and hold them in custody.
Just something related to AIG that some folks may have missed, I haven't seen it publicized. My long-time auto insurer 20th, now 21st Century, was taken over by AIG sometime in late 2007; AIG sent us a nice little note announcing the change. Then in the late summer of 2008 the story of the financial ruin of the world was being made public and AIG was right in the middle of it. I shuddered. Then the first phase of the bailout, and AIG's name rose to the top of the national shit list. Then on Dec 30, we got another nice letter, this time from 21st Century, which opened thusly:
"For over 50 years, 21st Century Insurance has meant low rates, personal service, unique features – and one of the most respected names in the business to millions of Californians. Now we're proud to reclaim that great name as we strive to make our company even more in tune with the way Californians live today, in the 21st century". Wow!
The letter was signed by the president of the 21st, Anthony DeSantis. I was thrilled. So thrilled in fact that I emailed Tony back, asking him in my best country bumpkin accent if it was really true, was the evil AIG really GONE from our once swell little company. And a nice customer service rep sent me these words: "AIG Direct combined with 21st Century Insurance over a year ago and now has decided to use the well established 21st name. Our new name reflects a thoughtful change to looking ahead to the future on how we can better serve our customers, making our product even more personalized for the 21st century." Coinciding with this revelation, 21st Century Insurance advertising was all over the TV for a while, with nary a word about how they are actually AIG using a previously well-respected name.
My policy is up in April, and I intend to hire a new company assuming I can find one not secretly owned by AIG.
Good luck........Do you remember the Enron Scandal? Do you remember Arthur Andersen Accounting and Arthur Andersen Consulting? Well, The two companies taught Enron how to set up "Ghost" Off-Shore Companies and Off-Shore Accounts and helped them to conceal over 1000 of those "Ghosts".......Arthur Andersen Accounting disppeared.....But, Arthur Andersen Consulting had beeen trying to separate itself from Arthur Andersen Accounting for years......
Arthur Andersen Consulting became "Accenture" and received U.S.Government Contracts worth billions, even though its offices were outside the United States (part of its training)......
Timothy Geithner, Ben Bernanke, Henry Paulson.......Whoever is in U.S. Treasury or at the Federal Reserve, they are from the same group that wanted to "Privatize Social Security"....Instead, they chose to "Bankrupt America"....Now, that is Patriotism!
Sidebar alert. Accenture just took almost $400,000,000 from my own company for the dubious distinction of recommending the outsourcing of practically our entire operation. That we couldnt adopt one single suggestion of theirs other than a new software package that is still, after one full year of fine tuning, a bloody mess makes that outlay pretty sad.
I work for a major public utility by the by....
"Accenture"
The same boys that screwed up HHSC in Texas. Their system here is being used to provide benefits for folks that need them. Guess what! Slower entry, slower provision and far greater mistakes. Great company that Accenture!
Not only great but smart too. They are incorporated in the Cayman Islands thus do not pay US taxes....That Arthur Anderson guy is one sharp cookie....I wonder if there is room in Bernie Madoff's cell.....
I believe he should have one just for himself!
The Bush administration made putting the fox in charge of the hen house an art. Then Obama came along with the same arrogance and did the same thing. Obama got a lot of campaign money from the financial and insurance companys. $100,000 from AIG alone. Gee, could Geithner and Summers be a payback installment. Will people in this county ever realise their awfully easy to con. Of course the mainstream media hasn't been any help. Their so afraid of losing access they eat out of the politicians hands.
How many of our children and grandchildren have been sold into economic slavery for AIG bonuses?
This is like assuring a good harvest by sacrificing our first born to Baal.
Maybe we should sacrifice our High Priests instead...
"We are a country of law".
Yes; a country of law designed to keep less than 1% of the population owning 50% of the nation's wealth!
If we were a country of Constitutional "law", of, by and for the people, Congress would never have repealed the Glass-Steagall Act of 1933, which PROHIBITED banks from offering RISKY investments, commercial banking and insurance services. It also PROHIBITED mergers that would create the "to-big-to-fail" monsters that we are now bailing-out. In short, it was meant to keep Wall Street Bankers in check to prevent another Great Depression.
Re: Federal Reserve Bank.....
"I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money....I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with the Congress for sitting idly by and permitting such an idiotic system to continue." -Wright Patman, former Chairman (16 yrs.) of the House Committee on Banking and Currency
Mr. Patman was absolutely correct...the idiotic system needs to change!
I have a suggestion: Since the American public owns 80% of AIG and because of contractual agreements we are told we cannot take the nefarious bonuses back, lets just fire the people that took these bonuses for malfeasence of their fiduciary responsibility! After all, they work for us now!
Making sure AIG does not pay bonuses is just putting lipstick on a pig. We know
they will get their bonuses even if they are deferred to next year or are paid
by off-shore wholely-owned subsidiary corporations to executives accounts in the
Cayman Islands .
These AIG Execs who are getting these bonuses need to be prosecuted for Treason and Racketeering, and this Royalist Empire needs to be put on trial by the people who are paying for it's decadence and brutality with there money, lives, and hope.
An Unjust Law is No Law at all.
When Tyranny is Law, Revolution is Order.
Making sure AIG does not pay bonuses is just putting lipstick on a pig. We know they will get their bonuses even if they are deferred to next year or are paid by off-shore wholly-owned subsidiary corporations to executives accounts in the Cayman Islands .
Congresspeople Israel and Ryan have taken up your idea for 100% tax on the bonuses, rosemarie.
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/17/AR2009031703780.html
We should support this with calls to our Congresspeople. Do not let them get off the hook with some play-acting in front of the cameras.
By the way, the bonuses are just a tiny fraction of the totals we have given these swindlers. We need accountability for every penny.
Joe