Monday, March 16, 2009
Being Talented
AIG pays bonuses of some $165 million to executives and derivatives traders who have all but bankrupted the company. Are these talented? Even though President Obama said that his administration would "pursue every legal avenue to block their bonuses," it may be a mute matter as former Treasury Secretary Paulson allowed such bonuses in the first administration of the TARP passed last year. The agreement made between the government and AIG is legally binding. It looks like this industry, and its government supporters at all costs, even to that of the taxpayers, both lack talent and ethics.
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8 comments:
These bonuses are required by contract. If these contracts are worth the paper they are written on, they should be based on some performance metrics.
Maybe these people met thier numbers.
Are the bonuses based on something measurable? In football, last place teams can have great quarterbacks but lousy protection.
I have no idea if this is what is happening with the AIG, but I'd like to know. I also know the buisness press won't dig in because
gossip is cheaper and still gets people to tune in. Look how long it took to get a good profile of Fed Chairman Bernake (60 minutes last night)
Thanks, allen, for your comment. You make some good points.
Who's writing these contracts? Are there no stipulations with regards to performance, as you have written, allen? I could care less how much they pay their executives just so as long as taxpayers are not required to bail them out because their bogus derivates and excessive greed. Many have already been paid astronomical fees based on these same derivates.
I also appreciate your football analysis. The only problem is that it doesn't matter if the fault is the quarterbacks or defensive backs, the team will not get a championship ring if the entire team does not increase in scores on the board game after game after game and then the final Super Bowl game. You don't get to the Super Bow and all it brings, unless the whole team progresses, puts numbers on the scoreboard. Things change when this doesn't happen; you get cut or the coach is released.
You bring up an excellent point about the business press' need to dole out information and perhaps our need to hang on its every word without probing deeper. I too do not know the details of AIG's contracts and the like. But what seems apparent is that any company in need of billions of dollars to avoid a major national and international financial collapse has failed on many levels. Should bonuses then be awarded to anybody? Individuals are not sole proprietors in such corporations.
Perhaps the language in these contracts needs to change, eh?
The talented quarterback would not be removed from the team and he would keep his salary or he'd move on.
I just don't feel like the press is serious. They provide no perspective. For example, yesterday Dick Cheney was able to say on Meet The Press that the state of the economy is Obama's fault. Its only been 2 months and there is no denying the crisis existed before he took office. Then, ironically, Cheney said the Bush administration kept the country safe after 911 when it took place 9 months into the Bush adminitration. How in 911 not a major failure of the Bush Administration? How did he get away with that? I bet John Stewart weighs in on this.
Yes, the quarterback may keep his salary but he does not get the bonus of the championship ring and perks that go along with a Super Bowl win.
The press is quickly losing credibility for sure. It was purely outrageous what Vice-President Cheney was allowed to say and not challenged on issues such as the greatest deficit in history after having received a surplus and increased unemployment over these eight years.
I could never reconcile the notion that the country was kept safe under one administration when it was that very adminstration where the greatest terroist attack has ever happened on our soil. The spin is mind boggling, not to mention the outright hypocrisy in government.
Why does the AIG bonus thing upset people so much? Although it might be rediculus that incompetent people get all this money, it won't have any real effect on our lives. The tax money involved in these bonuses is neglegable. Why don't people become enraged every time some jerk try's to put a bad name on something like resonably price health care insurance by calling it 'socialized medicine' or when someone deny's the science behind global warming. The lies perpetuated by these kinds of people could actually be detrimental, but it does not cause the same level of outrage.
Anger over AIG bonuses is just a distraction.
Excellent point, allen. I think it has more to do with the idea that fat cats are getting fatter at our expense, especially when so many of us are really hurting right now. And, of course, recongizable villians are the best focus for our rage.
The negligible amount that you spoke of reminded me of the purported pork in the budget that is about 1%, the same percentage of the bonuses to the AIG executives. But I think it also has less to do with percentages and more to do with the outright appearance of impropriety and disregard.
By the way, who does such a distraction benefit?
I'm not sure who the distraction benifits - it could benefit the republicans because they could assert that Obama isn't doing anything to get the money back. On 60 minutes, Bernake pointed out that we need to political will to do what needs to be done to get us out of this mess and harping on the bonuses could make it hard to get more money if it is really needed. The media seems to think that Obama was caught off guard about the outrage when it is very possible that he didn't want to fan fires because he might have to ask for more money. In some ways, letting these guys get the bonuses is a little like what we did during WWII when we became allies with the Soviet Union.
The outrage can't make Obama's job easier and I wish the media was adult enough to realize this and quit fanning the fires.
We can probably almost forget the hope that the media will not fan flames. This seems to be their modus operandi, especially lately.
I've gotta think a little bit more on your WWII analogy. When taxpayers own 80% of a once public company, there must be things that can be done to right wrongs that don't require such strategic monumental moves.
Aren't contracts broken all the time, not that I'm necessarily advocating such in all cases.
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