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StumbleSun editorial:
Bonus arrogance
Congress should take action to make sure no more bailout money is wasted
Tuesday, March 17, 2009 | 2:06 a.m.
Insurance giant American International Group is a poster child for the collapse of the financial market. President Barack Obama said Monday the company’s problems were the result of “recklessness and greed.”
The recipient of $170 billion in federal bailout money, AIG seems to be going about business as usual. It was due to pay $165 million in “retention” bonuses Sunday, much of it to traders at AIG Financial Products, the group that sank the company with its risky deals.
Obama summed up the feelings of Americans, saying it was “hard to understand” how AIG traders deserved bonuses. The Financial Products group is still hemorrhaging red ink and is a major reason AIG lost $61.7 billion last year.
“How do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama said.
AIG Chairman Edward Liddy said the company is legally obligated to make the payments under a deal struck by previous management, and he pledged to find ways to limit future bonuses.
Liddy’s argument is difficult for us to swallow. What would AIG have been obligated to pay if it had not received a bailout and instead went out of business? Of course, AIG received federal money because it was determined to be “too big” to fail. Now it sounds as if AIG is too big to think it should play by the rules.
AIG never should have agreed to these bonuses in the first place and is now rightfully under fire. On Monday, Obama instructed Treasury Secretary Timothy Geithner to find ways to try to block these bonuses. New York Attorney General Andrew Cuomo has demanded that AIG release the names and positions of the people who received bonuses.
There has been too little accountability under the bailout program. Congress should hold public hearings and subpoena the chief executives of AIG and every other bank that took federal bailout money. The companies should be pressed to provide a complete explanation of how they’ve been spending taxpayer money. Enough is enough.
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When TARP II was passed and signed by Obama - Chris Dodd inserted a bonus protection clause for bonuses that were contractually sign before bailout money was provided.
When Tim Geithner passed out another 40 billion to AIG in Feb he this non and any restriction on bonuses.
Tim Geithner negoiated the original AIG bailout deal.
The Sun got another one right on. But it should have added how that little detail of accountability managed to slip past the attention of the original bill's drafters, amenders, then each member of Congress at the vote.
What was that line from "Full Metal Jacket" about the lineup to take a bite out of a particular kind of sandwich?
Future2012 -- what you say makes sense, except your "he this non" so please clarify that line.
One must surely see in what contempt our national leaders hold us cattle to pass this kind of enlsavement, because our great-grandchildren still won't be able to pay off this debt. All while those responsible go their merry way without a shred of accountability.
Nice legacy we're leaving, no?
I heard the reports on Fox News about this Dodd amendment and was outraged. Then I read on media matters website that the amendment actually limited or prohibited bonus payouts to companies accepting TARP funds. What I would like is an honest media. A media that has NO political agenda and can just report the freakin facts as they are. No more, no less, just give me the facts and let me make up my own mind without all of the BS.
Why are we still mad at AIG? Congress allowed this to happen. They bailed this pig out. Let it fail and hammer the incompetents in Congress. This notion of to big to fail is crap.
Congress has failed the voters and they are still in power. What garbage.
The way AIG spends money while in debt is a lot like Nero playing the fiddle while Rome burned, or the band on the Titanic playing on as the ship sank.
I agree getalife, let these spendthrifts go down. After that, we need to elect a new congress.