Wonkette
So when the news came out about AIG spending hundreds of millions of dollars on bonuses for the incredible losers who, in running one tiny tiny segment of a huge and otherwise very stable company, managed to completely destroy the whole company and indeed the entire global economy, AIG said, “Well obviously we cannot get out of paying these bonuses because of CONTRACTS.” And it reminded us of this other time that AIG got caught spending a relatively small but nonetheless infuriating amount of taxpayer money on frivolous bullshit and started yelling CONTRACTS all over the place.
One side note: How sad it is that everybody is enraged over a mere $165 million in bonus money, because $165 million is just one tenth of one percent of the total amount of money we have shoveled toward these douches. Recall that Merrill Lynch snuck through $3.6 billion in executive bonuses not so long ago and people yelled about it but maybe not so loudly. The answer, perhaps, lies in the fact that Merrill got the bad news out first. What we are doing to AIG is what shrinks like to call “projecting.”
But still, what fartsacks!
Consider: In November, people were appalled to learn that AIG was spending $125 million on the renewal of sponsorship contracts. And AIG and its army of flacks said dang, contracts are inviolable, a sacred oath! We are powerless to modify or abrogate!
Except when, say, the government decrees that contracts between lenders and mortagees can be modified by judges so that homeowners aren’t on the hook for an exploding ARM on a worthless house anymore. Then contracts can be modified. But government and business alike quake in fear of the sacred contracts between possibly criminal AIG employees and the company itself.
Also note that other companies caught paying out big bonuses or maybe just holding bonfires with government dollars end up just mouthing something contrite and promising never to do it again. They do not launch this weird legalistic argument that only makes sense as long as you believe that the government, as the 80 percent owner of a company, has no power to modify existing contracts with its employees or partners.
Obama in Effort to Undo Bonuses at A.I.G. [New York Times]
I think you mean 0.1 percent, or 1 permil.
I think that dog is a Republican Congressman from Alabama.
Fuck them all with a spoon. Except they would enjoy it.
All I learned in one solid year of Law School-brand Contracts class was more than I ever wanted to know about hairy hands. And something about how wiping one’s ass with a contract makes it voidable, but not void.
I’mma whoop AIG’s ass next time I see ‘em.
LOLCATS!!!! How internet-y…ish…whatever
Clearly, our government is STILL scaredy-fraid of contract lawyers. As are the rest of us. C’mon, Hopey, sic Michelle on ‘em. SHE’LL kick ass and take names.
What a fucking mess. What does Cheney have to say about it?
I hate to be the one to defend AIG, but I think you guys’ misplaced anger rests upon a perfectly understandable confusion about the word “bonus” and the way it is used at AIG and in contemporary Wall Street. Laymen generally think of the term “bonus” as referring to a payment that is given to company officers and employees when a company or a division thereof meets or exceeds performance goals. However in the case of a company like AIG, bonuses are simply payments that are doled out to employees for being agents of the Dark Lord Satan Himself with a mission to destroy the World Economy.
So let’s stop demonizing AIG employees for just doing their job, OK?
It takes talent to bring financial ruin to a multibillion dollar company. It these talented people don’t get their bonuses they may seek employement elsewhere.
I say pay them in AIG stock, marked-to-book using the Jan 08 stock price, about $60/share.
Robert Gibbs just badmouthed AIG and Chip Reid made a throat-cutting gesture from the back row.
We need a standing contract with a manufacturer of guillotines. Robespierre in 2012!
momus:
“I say pay them in AIG stock, marked-to-book using the Jan 08 stock price, about $60/share.”
Throw in some shares of Bear/Stearns, too.
Let ‘em sue before a jury and see how much they get. LOL the idea that if the contracts are ripped up, these top talent asshats might go somewhere else. GTG, I must irony my suit.
Contracts are binding commitments when written on and by Wall Street.
Contracts are NOT binding commitments when written for and by automaker unions.
The first party gets to keep whatever cash it can glom onto with its meaty mitts.
The second party gets to forfeit a huge whack of its contractually guaranteed hourly wage to save itself.
Why is that SO HARD for y’all to understand?
Them that’s got and them that’s not. Republicans only believe in Darwinism when there’s dollars involved.
By seeking to link repayment of the bonus money to the coming $30 billion in assistance, the administration seemed to leave open the possibility that the company would effectively be repaying taxpayers with taxpayer money.
So we’re really paying ourselves to waste $200 billion of our own money. Who knew we were such talented financiers? At least that’s what Milo Minderbinder tells me. I think I deserve another bonus.
I broke my pitchfork on Madoff–I’ll have to sit this one out.
Serolf Divad: Ha!
norbizness: Haha!
IOWA CITY, Iowa - Iowa Sen. Charles Grassley suggested on Monday that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant by resigning or killing themselves.
The Republican lawmaker’s harsh comments came during an interview with Cedar Rapids, Iowa, radio station WMT. They echo remarks he has made in the past about corporate executives and public apologies, but went further in suggesting suicide.
HAHAHAHAHAHAHAHAHAHAHA!
Canuckledragger: That’s not Darwinism. It’s intelligent design. It’s the evolutionary work of Spirit manifesting in the present in an epochal Omega Point transitioning postmodern nihilism (green) into a new age of global interconnection and spiritual renewal (turquoise). Just wait until we get Integral People elected and get the Harkonnens off our backs. Muad’Dib!
http://wilberwatch.blogspot.com/
Insolvent insurance company is insolvent.
Fucksticks, the lot of them.
Mr Blifil: Thanks for the summation in the last thread. My head feels only slightly less likely to explode than before (even if my rage hasn’t quite yet abated).
Canuckledragger: NPR said basically the same thing yesterday, when one of their reporters went to Detroit and environs to get their reaction to the latest AIG shenanigans. Needless to say, them Detroiters are a cranky lot.
I understand they’re hiring.
http://www.aig.com/_547_98041.html
No mention of their bonus program?
If someone’s job description included “destroying international economy by hanging worthless paper all over the planet”, I think he well and truly earned every cent he gets.
…lemme get this straight, the fukk-tards are getting compensated for past assets and revenue that is knowingly and blatantly fictional?! This is the equivalent of me depositing an “IOU” into my bank account and then collecting interest on it!
Can’t even believe this happened.
http://www.governmentalityblog.com/my_weblog/2009/03/did-obama-screw-up-on-aig-bonuses-.html
ForTheTurnstiles: Dude, don’t know what you’re smoking, but I want in.
queeraselvis v 2.0: Dude, don’t know why Detroiters are so upset. Ain’t they gettin’ themselves some free Leno soon?
i think i’m a leftist simply because this UTTER lack of transparency is too frustrating for words. Shouldn’t people be like CAMPED OUT at AIG headquarters throwing rotten vegetables at them? Oh , we have to eat them.
samsuncle/madtowngooner: Actually, this might be a pretty solid argument in favor of paying the bonuses. Do we REALLY want these geniuses unleashed on the general populace and the rest of the private sector? They might get a job in the Treasury, or god forbid, start a consulting firm. AIG might be doing a public service by retaining these guys.
You KNOW that if there’s one thing corporations can’t resist, it’s the siren song of a consulting firm founded by complete fucking morons, and these guys would have the best pedigree in human history.
I didn’t think the government owned any part of the company. I thought they had a 79.9% equity stake by way of equity-linked notes, which are not company shares.
ForTheTurnstiles:
I clicked on your blog. Now I want to burn unicorns and babies. And puppies.
In the workers’ paradise, there will be no contracts.
Dear AIG
Fuck you from another three-initialler.
Sincerely,
TGY
Botswana Meat Commission FC:
Canuckledragger:
Not my blog, but check out the comments on the articles. Ken Wilber is preparing an army of pimply boys and desperate MBAs who think he’s enlightened to crown him Padishah Emperor of Dune. Want to see some creepy?
http://www.youtube.com/watch?v=tQRUu_4W2j8
Serolf:
Capitalist Pig!
From wnbc: “While praising the President Obama’s effort to recover millions of dollars in bonuses given to AIG executives, Senate Republican Leader Mitch McConnell suggested the Treasury Department could have done more two weeks ago, before it agreed to give AIG another $30 billion bailout.”
The bonus contracts were signed in early 2008. AIG got it’s first bailout money in October 2008. Who was in charge then, Mitch Dickwad?
You all simply do NOT understand the vital importance of AIG’s employee morale program, the “Incompetent Douche of the Month” award. You get a parking spot right next to the building and a Lamborghini to put in it.
Serolf Divad: Well if they work for Satan, then they’re technically demons, so demonizing them is kinda moot anyway.
There are only $6MM worth of contracts. The rest is due to a “retention plan,” that is probably as legally binding as a drug deal (http://static1.firedoglake.com/1/files//2009/03/ny12532-_432294-v7-white_paper_-_aigfp_retention_plan.pdf).
The outrage at AIG should be dwarfed by the outrage at the concerted effort to take the unwashed masses’ collective eye off the ball.
“If these talented people don’t get their bonuses they may seek employement elsewhere.” Clearly the same geniuses who brought us the insanely complicated financial instruments that brought down a company and a global economy are the only ones who can dig us out of this. For the same reason, I suggest we only hire arsonists as firefighters and pedophiles as day care center operators.
Ugh. Lemme guess, SKS didn’t go to law school? The fartsacks part was correct (think Henry Paulson first) but the contract analysis wasn’t some “weird legalistic argument.” Again, ugh.
As an 80% owner of AIG, I recommend the US government dig through the file cabinets and find the files containing the crap loans AIG executives leveraged. Hand the AIG employees expecting bonuses a large stack of crap loans and tell them they get a bonus when they turn that crap into a sizeable profit.
Monsieur Grumpe: I went to that page and then clicked on the linky thing under “our culture” “vision and values.” Guess what?
“page not found”
AIG to President Barry: “Up yours, nigger!”
http://www.youtube.com/watch?v=yZF_zPkWbhY&feature=related
(Amazing how “Blazing Saddles” is turning into a documentary, isn’t it?
All this “OUTRAGE™” is getting old. Blah blah blah. Uncle Sam needs to stop screaming and get out the damn brass knuckles. Get out a crowbar, some pliers, and a blow torch and you’ll get your damn money back. Quickly too. In no time AIG will cough up some bloody teeth on that contract and we won’t hear the word “bonus” again.
Executives advocate risky atmosphere to jack up company worth
Banks take huge gamble on derivatives and market trends
Someone* buys bank debt with offshore company
Markets tank
Banks unable to meet obligations
Taxpayers pay the bills for them
Someone* gets paid billions to a Cayman Islands account
AIG still goes broke
Executives get paid bonuses
Stocks tank more
You lose your home
Executives buy your house from the bank for pennies and rent it back to you
Someone* is laughing at you because you blame only the bank
groove: Yeah, I want someone to explain the whole “ownership” thing to me. I was arguing with my boyfriend last night that owning 80% of the company doesn’t necessarily mean that the US government has a place on the executive board. But, I don’t know these things.
It appears that Congress has finally figured out the obvious way to get the bonus money back. Tax it. They’re going to consider inserting a provision in the tax code that says something like “if you were a douchebag executive at a company that received TARP funds and you received a shitload of compensation in 2009, we’re going to tax the hell out of you.” Bravo. The end.
SlouchingTowardsWasilla: The tax should exceed the amount of the bonus. It would provide incentive for the executives to identify how the contracts can no longer be binding.
PrairiePossum: mmm, not a bad idea. the bonuses could be paid in company shares, at the value they were at a year ago when the bonus-worthy peformances were, uh, performed.
AnnieGetYourFun: General Rule: The members of the Board of Directors are elected by shareholders and the company’s officers are hired by the Board. So generally, a majority shareholder has a pretty big say over who runs the company. However, the AIG shares acquired by the US Government might not be common shares; they might be preferred shares that give them superior dividend rights and payout rights in the event of bankruptcy, but maybe not voting rights.
Monsieur Grumpe: Thanks for the tip-off as I need a job. I might not have any experience in finance, but my resume clearly states that I did not bring down the entire economic system. It’s not like I could do worse?
Sussemilch: I’m thinking congress should go old school and come up with some medieval style taxes, like indentured servitude or forced to serve in the army or the taking of their virgin daughters.
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/17/AR2009031701195.html?hpid=topnews
YEAH! YEAH! YEAH! Get’em Barry! Sic’em Timmy!
Guess how happy I am based on my user name, sweeeeet. This is why we voted for the Magial Unicorn rider and Joe Hairplug!
I am at my most snark free since 11/5/08, and overjoyed
“The answer, perhaps, lies in the fact that Merrill got the bad news out first. What we are doing to AIG is what shrinks like to call ‘projecting.’”
god, don’t i wish. it would be projection if WE had taken the money, and then decided to believe AIG had stolen it instead because we loathed ourselves. i’d like to be able to wallow in self-loathing because i’d stolen a hundred million dollars and gotten away with it.
If a couple of these AIG execs went public and REJECTED their bonuses, or announced they’d DONATE the bonuses to charity, they’d become Big Damn Heroes overnight.
Hooray For Anything: Virgin daughters? I think I speak for the rest of the class in saying we’d much rather have the slutty ones.
Maybe this situation calls for creative use of those Bush Justice Department terrorism memos. Since these AIG guys like “deals” so much, how about this deal — agree not to take your bonuses and President Hopey won’t declare you all to be “enemy combatants” and drop you all in Gitmo. If you don’t like that deal, how about exile on a tropical island in the Pacific? http://en.wikipedia.org/wiki/Bikini_Atoll
FMA: Point well taken.
If I’m not mistaken, didn’t the UAW have fucking contracts? And the Repubtards who oppose the Employee Free Choice Act because gov’t shouldn’t intervene in contract disputes, not insist the workers agree not to strike?
The irony is that AIG could take O’bama down. But I have the perfect solution:
Use some stimulus money to hire more IRS agents and audit their asses. This year. Last year. Next year. And the next. Let the IRS make rich people’s lives a living hell for once. See if AIG might decide they can void those contracts, after all.
shanemacgowan: You’re eyesight sucks. It’s Tom Coburn trying to fuck Inhofe.
BigBrainOnBrad: Hey, bring back the gold standard and we’re really back in the 18th century… Paul/Robespierre 2012!
queeraselvis v 2.0: Hey man, you’d be cranky too, if you had to live in Detroit.
SayItWithWookies: Why not just let AIG go down and pay off their bad debt directly? See, no bonuses. These fucktards reallly have me upset. Eat shit and die, AIG, and writhe in hell for eternity.
Jsab: You’re bumming me out. Of course, doesn’t take much these days.
SlouchingTowardsWasilla: Add my auditing idea, and these douches will be running from their fucking bonuses.
DustBowlBlues: GAHHHHHHHH. This isn’t that hard people. One party to a contract can’t simply void it because they don’t like what it says any more. Now if both parties agree to modify the contract, they can do that. That’s what the UAW did in return for their jobs. To get the AIG employees to forego their additional compensation, they’re going to need some incentive to agree to a contract modification. And no, we don’t have the right to fire them if they don’t agree. WE DON’T OWN THAT COMPANY!!!! We have a ton of preferred shares that don’t give us any management rights.
Did Henry Paulson fuck up? Oh yes. Henry Paulson was only interested in making sure his friends at Goldman got paid, so he funneled billions through AIG to Goldman (and Merrill, and some other banks) and didn’t really give a rats ass about anything else - like making sure AIG management agreed to forego their bonuses prior to receiving TARP funds.
SlouchingTowardsWasilla:
I’m glad I’m not the only one thinking this.
SlouchingTowardsWasilla:
“One party to a contract can’t simply void it because they don’t like what it says any more”
Agreed. In the normal course of business. This ain’t normal. We live by the rule of law so that at least theoretically everyone has a shot at justice. This isn’t just.
SlouchingTowardsWasilla: Jeesh. Just let us be angry for a while. Then around dinner time come in with the facts.
FMA: I’m changing careers to tax collector, asap.
Norbert:
I prefer to give them a stack of worthless paper. U.S. taxpayers now own that crap. Give it to the employees who thought it was a good idea to invest in the crap. They can wipe their butts on their bonus contracts as far as I’m concerned. Sue AIG. I’d love to hear their attempts to justify a bonus at taxpayers expense. I hope taxpayers set up guillotines outside AIG in protest.
pondscum: Damn for once, I agree with a Repug. HariKari. Motherfucker!
yeah, it is not like you could somehow terminate their employment, stopping the excessive pay to people who bankrupted the company and broke the economy. you would probably be fired from mcdonalds for stealing one cheeseburger.
hobospacejungle: I’m right there with you on the rage thing. I’m just trying to get everyone focused in the right direction. This clusterfuck is the brainchild of Henry Paulson, not AIG. Paulson could have done something about this before agreeing to the TARP distribution. AIG has no choice here; they can pay the bonuses now or after they get sued, which will include both parties attorney’s fees.
PrariePossum: Sue AIG? For what exactly? You’re talking gibberish. As for getting the bonuses back, we can do that by taxing executives of companies that receive TARP funds. Problem solved. As for the guillotines being correctly located, see the comment above. These AIG bonuses pale in comparison to the money that went to Goldman.
SlouchingTowardsWasilla:
I meant that AIG employees who are seeking bonus money should be forced to sue AIG claiming breach of contract. Taxing AIG executives won’t work because there are so many loopholes in the tax code. By the time the employees claim tax credits and itemize deductions, they won’t owe any tax under the current code. I’m sure the AIG bonuses aren’t the most aggregious transfer of funds from taxpayers to Wall Street executive, but they’re the straw that broke the camel’s back.
Hopey could be the collateral damage on this mess. If this bonus shit slipped past Geitner, then he deserves to be fired. Period.
Besides, is anyone else tired of listening to him talk between clenched teeth? I hope he’s as smart as he’s supposed to be, because between fucking up on Turbo Tax and being hopeless at explaining what the fuck is going on, he’s very underwhelming.
pondscum: Yay, for once I am proud of Grassley representing my state. Too bad one of his spokespeople came back later to say that he doesn’t really think they should kill themselves.
isadelia:
Yeah, I was willing to buy the guns and bullets.
ForTheTurnstiles:
Correction:
The Padishah Emperor is ruler of the KNOWN UNIVERSE.
ie. teh Intrawebz