Sunday, March 22, 2009

Being a Blogger II

Recently, I read this very thoughtful comment by a blogger on the Huffington Post by a Marion Watts, an American living in the UK:

I live in the UK, where AIG is primarily known as the sponsor of Manchester United, the country's best-known soccer team and one of the wealthiest franchises in the world, which also happens to be owned by Malcolm Glazier, who's the owner of the Tampa Bay Bucs. What concerns me, as an American living abroad, who pays taxes on both sides of the Pond, is the fact that, a lot of these bonuses went to AIG's satellite investors, who are amongst the big investment banks in the City of London. We hear daily here about exorbitant 7-figure bonuses some of these City whizzkids get and how they flaunt them with their bling-bling parties. And what annoys me further, here in the UK, is that the Brit Treasury intends to do Sweet Fanny Adams about confronting the crisis facing their own economy, instead wishing to ride along on the US coattails, expecting Obama to bail them out. Funny, how under George Bush, we were the pariahs of the Western World; now Obama's everyone's President with a solution to everyone's problems. Fact is AIG is as greedy as the next unregulated enterprise on Wall Street. Big bonuses are common. The company was, effectively, nationalised, and you'd think they would have had more common sense than to use what amounts to public money to reward overpaid employees for a substandard performance."
What has Britain and other Western countries done? I haven't followed much what Britain or the EU is doing. But it does look at first glance that the West is waiting for movement from the United States in order to correct their own situation. (That may be somewhat of an exaggeration.) I guess this is the lot of leaders and perhaps the trouble with some aspects of globalization. Is the responsibility of a leader to bear the bulk of the calamity, while others do what?

President Obama on The Tonight Show spoke of setting up another system for a securitized market. Arianna Huffington speaks of bolstering credit unions. They are healthy. I like it. This is great but it still seems to not address Wall Street banks that could land us here again. I'm assuming further plans will follow, but faith in the economic team is waning, especially when we consider that those who got us in this mess are now navigating us through it.

AIG paid millions of bonuses to British AIGers where Manchester United, a sports franchise where US Malcolm Glazer holds the controlling interest, probably gets more than "t-shirt" sponsorship. Even if so, we can be assured that the sponsorship is well in the multiple upon multiple millions.

Because millions in bonuses went to a British AIG subsidiary where a great many credit default swaps occurred, the proposed 90% tax will not be assessed. There is also, of course, the many creditors such as Barclays that got billions of taxpayer dollars.

This is our global economy. Wouldn't you chose an insurance company like AIG over a British one or any others when it can be assured that such an American company will be too big to fail and taxpayers will step in?

Here's Times Online:

"Most of the bonuses went to the financial products unit responsible for creating the exotic derivatives known as credit default swaps that caused AIG's near-collapse. Many of those are British employees based in London. It also emerged that $7 billion of the US bailout money was paid to Barclays, a creditor."

Here's Bloomberg:

"The legislation wouldn't attempt to impose the tax on foreign employees of companies such as AIG," said Ways and Means Committee spokesman Matthew Beck. "Many of AIG's bonus recipients work in the London office of the credit-default swap unit."

Is the responsibility of a leader to bear the bulk of the calamity, while others do what? This unknown blogger, Marion Watts, addresses some very thoughtful points in her post that made me consider a few things.

Thanks Marion!

No comments: