Obama Angry at AIG
By Alan Stewart Carl | Related entries in Bailouts, Banks, Barack
AIG’s decision to pay out bonuses despite the financial company’s massive troubles has angered a lot of people. Place the president in the angry category.
Joining a wave of public anger, President Barack Obama blistered insurance giant AIG for “recklessness and greed” Monday and pledged to try to block it from handing its executives $165 million in bonuses after taking billions in federal bailout money.
“How do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama asked. “This isn’t just a matter of dollars and cents. It’s about our fundamental values.”
It’s unknown what Obama can or will do about the bonuses, but he’s asked the Treasury Department to pursue every legal avenue.
While the president’s statement is obviously meant to keep the bailout backlash from damaging the White House, he’s right that this is not just a matter of money but of values. AIG had no business rewarding employees after many of them helped make the disastrous decisions which would have doomed the company if not for massive government assistance. While I’m sure there are employees at AIG who are competent and, in any other situation, worthy of a bonus, the company proved, yet again, that senior management is out of touch with the reality of the situation.
This is yet another example of how TARP’s rush to approval left a lot of gaping holes. Nevertheless, AIG deserves the public outcry.
This entry was posted on Monday, March 16th, 2009 and is filed under Bailouts, Banks, Barack. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
March 16th, 2009 at 5:44 pm
I’m going to say something so astronomically stupid, that I hate to even be associated with it, but here it goes:
Why is everyone assuming that the bonus is a performance bonus?
If you have been paying attention for the past 10-20 years bonus have become a way of doling out higher pay while avoiding listing the pay as salaries for their executives.
I am sure there is probably some tax benefit to go with it as well.
Our government officials can act all outraged, but it rings pretty hollow. No executive with half a brain will agree to performance bonuses. They just want them for employees.
March 16th, 2009 at 8:14 pm
I have no problem with sales incentive bonus pay for top performers. This feels similar to the anger over the incentive trips that they gave to top sales people.
March 16th, 2009 at 10:32 pm
Would it make everyone feel better if we just called the “bonuses” grant funding? — part of the new stimulus “Executive Monetary Stablization Program” administered by the Department of Treasury. The proceeds of this program will go towards stablizing the spending power of executives and supporting labor markets for many service industries. Feel better?
March 17th, 2009 at 2:35 am
Great photo –really nails it, but as gerryf said, it does ring hollow. Especially that “cough” by Obama and the follow up about being choked-up with anger. Probably more along the lines of Marlboro.
And I loved Grassley bringing up the Japanese. Classic.
At least it probably won’t go through now, but this is just a drop in the bucket –a bucket that seems to have a hole in the bottom
Good blog, keep it up. I added you to my Blog roll.
March 17th, 2009 at 7:03 am
Uhm, no
All talk of performance bonuses aside, this issue is easily solved. Does not the US Government own 80 percent of AIG?
As the controlling interest, the government merely has to order the corporate treasurer not to make the payments, then spin off this Derivatives Division and finally declare the division bankrupt…end of story.
March 17th, 2009 at 9:16 am
And shouldn’t the public outcry be first against the Congress that voted to give these jokers money, carte blanche, no questions asked, no strings attached? This includes Obama, McCain, and all of the other so-called representatives of the people. This is what happens when you have politicians who know next to nothing about economics or running large businesses attempting to fix something that is broken beyond repair. So cry foul all you want against AIG, but remember who created this situation back in October.
April 5th, 2009 at 10:29 pm
After the government gave AIG bailout money, they should have used ownership rights and cancelled all performance bonuses and laid off the executives who have done nothing but run the company to ground. It is insane how AIG justified their action and rewarded failure. At the end of the day, it’s the US taxpayer that is getting screwed left and right. How come nobody is thinking about bailing out the middle class that is losing jobs and homes?