From an editorial yesterday in the left wing Miami Herald: "It is true that the bonuses may be part of ''retention'' deals the Financial Products unit has with AIG, and they are legally binding. Whatever the legal obstacles are, they must not be allowed to trump common sense and what is morally right." We've been taught that America is the business capital of the world because of our rule of law. Regardless of how we view the AIG bonus pool the fact remains these bonuses are not only contractually required but Congress also specifically allowed them-after rancor-to be included in the bailout bill. What's since changed? MOB RULE. Not the rule of law but the rule of the media, Congress and the impact of their outrage as it spills onto the American Street. The equivalent of us saying, "we KNOW he killed that little girl just hang him now and spare the expense of a trial." Us Libertarian cynics saw this coming THREE YEARS AGO. How is this for a parallel. The NFL team called the X-Men play in a publicly built, subsidized stadium. The X-Men's first round draft pick Thadeus Johnson signs a lucrative deal paying him a $8,000,000 signing bonus with further bonus payments and deferred salary guaranteed in 2012. Alas, Thadeus is a bust. He reports to camp out of shape, has a couple of brushes with the law and can't beat out the lower paid veteran competing for the same job. In 2011 Thadeus is waived and goes back to his life as a dope smoking, tattoo attired, corn row hair styled young adult in Abilene. Yet he still receives his guaranteed money. Even though the taxpayers who helped build and operate X-Man Stadium are de facto subsidizing the X-Men and therefore paying the bonus that Thadeus uses to buy his 4th Bentley-the contract is legally binding. Laws are all we have. These bonuses are literally one-one thousandth of the total money AIG received from Congress. To put that 165m in context-it's less than this years payroll of the New York Yankees who will debut a $850,000,000 taxpayer funded stadium. As the economy sinks into a jobless depression Congress and the media rearrange the deck chairs on the Titanic. What a nice diversion for Timmy Geithner and the hapless administration. We were tools for allowing the bailout but we're BIGGER TOOLS for wasting this much time and money in the destruction of our legal institutions. Today it may be a d-bag AIG exec getting the shaft-don't applaud-tomorrow it's you or me. After all it's not about laws it's about the moral play de' jour.
You couldn't be more right. Its disgusting to see so many people who are TOO AFRAID to have controversial opinions simply because they are scared of crowds. AIG bonuses need to stand, period, you just dont throw the rule of law in the garbage when its politically profitable, if people get upset about it and burn down cars, then they face the rule of law as well Heck maybe even Ron Paul is trashing the constitution simply because he is afraid of the public
Pabst, you'll smoke anything that's wrapped in a flag, won't you? The sports analogy is a poor one. Bonuses should not go to employees whose very conduct has resulted in the need for bailout in the first place. If anything, sanctions and accountability are in order. The athlete did not destroy the government subsidized stadium and then hold his hand out. The government did not subsidize that stadium as a result of the athlete in question first decimating it. See how that works? AIG is in survival mode, at best, and the people who put it there are asking for their taxpayer-sponsored yachts. On the plus side, your taking AIG's side in the matter of executive bonus compensation should give your prospective investors a warm feeling all over.
When you hear a government official say, they are going to TAKE that money from you despite a legally binding contract, you should be afraid, no matter what side you are on. The constitution forbids such activity, no matter how morally bankrupt the situation may be. By allowing the government to do such a thing, you are incrementally enslaving yourselves and future generations. This entire situation of government feigning outrage is smoke and mirrors to keep the sheeple dumb enough to realize the underlying implications of the situation. And it's working flawlessly.
To the extent that bonuses are calculated and paid in any way remotely related to financial performance, there should be recourse. If employees fraudulently hid the extent of their corporate decimation until after they were entitled to their bonuses, then that deceit should not play in their favor. For a bunch of capitalists you've all suddenly gone bureaucratic. Capitalism is as much about accountability as it is about reward.
I tried to argue the same point yesterday in a thread. While I don't LIKE the fact AIG paid out bonuses, they legally have to. The government cannot be allowed to be above the law. The idea of taxing the shit out of those bonuses is, to me, the government asserting the idea of them being above the law.
It is in the contract to have the bonus. It is also true that if AIG goes BK, those contract will be void. Even AIG doesn't go BK quick enough. It is also possible to have a law to tax AIG bonus at 100% if such a law pass. ( Remember laws are created everyday in congress ) or They can do something in the middle and let this fizzle out.
You are correct in that the contract could be null and void if AIG where bankrupt. But to create a law, EX POST FACTO, is unconstitutional. Congress is not supposed to be able to create laws or bills that run contrary to what the constitution says. I.e. Article I section 9. The constitution is supposed to be the law of the land....yeah yeah i know congress and the government have ignored the constitution since FDR, but still. Allowing them to ignore it is how we become beholden to a group of unacccountable asses in government and incrimentally enslave ourselves.
At one point the Treasury was in a position to stop these bonuses. Those were the terms of TARP. It was dropped without explanation in the final compromise on the economic stimulus measure, replaced by a less restrictive set of conditions backed by Sen. Christopher Dodd, and accepted by the White House. It's impossible to know who to hate more, congress or the bastards at AIG. John Q Public wants an execution, and rightfully so. Problem is, the executioner,(congress), is as guilty as the condemned, AIG. What a f'n mess! And it all happened right under the nose of the Obama administration.