So a company that got less than $5 Billion can still give them out.
They only have a problem if they are more than $250K. Is that the only number Pelosi knows?
It goes something like this:
AIG makes a contract with their execs.
Porkulus bill says you can’t give execs bonuses. Dodd adds amendment to say they can
A year later the bonuses hit the press.
Dodd says he didn’t know about the amendment. Geithner says he didn’t know about the bonuses.
The next day they both come clean. What a couple of liars.
In a move to cover their asses, they pass a bill to take 90% of contracted bonuses. Never mind there was a contract, constitutional issues and they were approved by congress.
Sounds like Fannie and Freddie are also covered in the bill. No word on whether they will go back for the $90 mil paid out to Franklin Raines from 1998 to 2003. Somehow I doubt it.
Sounds like Merril bonuses are also not covered.
This is such bullshit that I don’t even know where to start. But I will defer and listen to what others have to say.
http://finance.yahoo.com/news/House-passes-bill-taxing-AIG-apf-14693850.html
**This is such bullshit that I don’t even know where to start. But I will defer and listen to what others have to say. **
What else is there to say, you summed it up, maybe not eloquently, but perfectly.
Porkulus bill says you can’t give execs bonuses.
I believe this is all in reference to the money released under TARP, not the “porkulus.” You guys are so upset you are confusing things, this was the bill Paulson got down on his knee and begged Pelosi for and that Bush signed. (I am certainly a democrat, and the idea of getting on a knee and begging Pelosi for something makes even me want to puke, haha. Paulson must hav really had to swallow his pride to do that).
By the way, I am not a fan of this either. It’s not so much the contract issue, as I’d guess somewhere on those AIG contracts it states the these employees work for AIG and are paid by AIG, at this point they are basically being paid by the federal gov’t. If not for the bailout, AIG would be gone, where would these folks and the contracts and their bonuses be then? As I said, I don’t like this, but the contract issue isn’t such a bother as I am sure a good contract lawyer could show proof that the terms of the contract have fundamentally changed due to the bailout.
I just don’t like “personalized legislation” and for the same reason was upset by the whole Terry Schiavo fiasco, this reminds me of that. However, I’d be cool with the “SwBkRn44 Gets a New P3C Act of 2009” 
Porkulus bill says you can’t give execs bonuses.
I believe this is all in reference to the money released under TARP, not the “porkulus.” You guys are so upset you are confusing things, this was the bill Paulson got down on his knee and begged Pelosi for and that Bush signed. (I am certainly a democrat, and the idea of getting on a knee and begging Pelosi for something makes even me want to puke, haha. Paulson must hav really had to swallow his pride to do that).
Wrong. http://news.yahoo.com/s/bloomberg/20090319/pl_bloomberg/akvqtzq3rjmw_1
Ahhh, you are correct. I was thinking back to this thread where the omnibus and stimulus were getting confused.
http://forum.slowtwitch.com/gforum.cgi?post=2244021;search_string=;#2244021
Anyway, the main point of my post was that I don’t particularly like this legislation either, however, the sanctity of these contracts isn’t that important to me as well. As I said, I doubt it would take much to read those contracts and be able to make the point that the terms of the contract have fundamentally changed and therefore the bonuses in them are no longer required to be paid.
I mean, if not for the gov’t bailout, AIG would be done, where would those contracts and bonuses be then? But again, I don’t think this tax is the right way to go about fixing the issue, I am not a fan of legislation on demand.
If not for the bailout, AIG would be gone
- How do you know that? It is impossible to say with any certainty what would have happened to AIG without the bailout.
- Even if “AIG would be gone”, how do we know that in the long term that would be worse than giving them billions of dollars?
- Even with the bailout, how do we know that AIG will not fail anyway?
1. How do you know that? It is impossible to say with any certainty what would have happened to AIG without the bailout.
Well, in reading about the “long weekend” the Fed spent with AIG it sounds pretty clear, and this comes from a wide variety of sources. I think the Fed believed that was the case as did AIG, there was actually an internal AIG PowerPoint presentation that got leaked to ABC News basically stating exactly that.
2. Even if “AIG would be gone”, how do we know that in the long term that would be worse than giving them billions of dollars?
We don’t and I never said we did. But I think we could agree that if they were gone, there would be no contracts and no bonuses. That’s all I am talking about, the “sanctity of these contracts” and the gov’t violating them doesn’t mean much, because without gov’t money it would be a moot point anyway. However, as I said, I don’t think this tax was the way to fix the situation.
3. Even with the bailout, how do we know that AIG will not fail anyway?
We don’t and I never said we did. I was only talking about the contracts and bonuses. Of your three arguments one is wrong and the other two are totally irrelevant to what I was talking about.
Given the position of AIG execs (company in difficult financial position and Feds ready to come to the rescue) I’m not sure we should take their word for it that a bailout or company failure were the only two options. Maybe they were, but maybe they could have survived without bailout money. Truth is, we don’t know.
My point is that I keep hearing people say that we needed the bailout to save AIG as if it was a proven fact. There is no way we can know this and there is no way we can know that AIG would not have survived without the bailout. Further, as you stated, there is no way to know that even with billions of dollars that AIG will survive. In my opinion, the government should never bailout a company.
I am not sure too many people would disagree with the statement that without the bailout, AIG would have gone under. Basically, it would have been another Lehman Bros.
“They only have a problem if they are more than $250K. Is that the only number Pelosi knows?”
Well, if you’re going to fight a class war effectively, you need to define a clear dividing line between “us” and “them.” Otherwise, you couldn’t be confident of getting full support from everyone on the “us” side.
Of course, with inflation, most of the “us” people will eventually move to the “them” side, but hopefully they won’t be thinking that far ahead.
Of course, with inflation, most of the “us” people will eventually move to the “them”
It won’t be “inflation” that makes that move it will be the government because of “Lack of funds” and it won’t be long. As I posted in another thread in Illinois the line has already been lowered to 14K a year if you’re single and 56K if you’re married with two kids.
The definitive line is 57K+ and everyone is “them” above that line. Between 56K and 14K your either “Us” or “Them” depending on how many dependents you have and your income. The only guaranteed “Us” is now below 14K.
Of course with the treasury pumping out 1 trillion dollars, maybe it will be inflation
~Matt
We don’t and I never said we did. But I think we could agree that if they were gone, there would be no contracts and no bonuses.
Actually I think this would be incorrect. Assuming AIG collapsed at the very moment that the the shit hit the fan the employees would like be receiving compensation of some sort anyway. No way of telling how much but typically employees don’t just get “Bilked” out of money they are owed and often times employees are considered top level creditors if I’m not mistaken.
I also believe that AIG and it’s bits and pieces would not have just vaporized and more than likely anyone coming in might have to pick up some of that liability to the previous employees depending on the contracts.
IOW we can’t say whether or not these bonuses would have been paid.
~Matt
Of course, with inflation, most of the “us” people will eventually move to the “them”
It won’t be “inflation” that makes that move it will be the government because of “Lack of funds” and it won’t be long. As I posted in another thread in Illinois the line has already been lowered to 14K a year if you’re single and 56K if you’re married with two kids.
The definitive line is 57K+ and everyone is “them” above that line. Between 56K and 14K your either “Us” or “Them” depending on how many dependents you have and your income. The only guaranteed “Us” is now below 14K.
Of course with the treasury pumping out 1 trillion dollars, maybe it will be inflation
~Matt
Congrats Matt, you are now rich!! So embrace your new found affluence.
A contract is a contract. If the government can come in and selectively invalidate a contract, we are in serious trouble as a nation.
If they are going to selectively/retrospectively go after bonuses, why not go get the crooks and Fannie/Freddie and all the others?
Congrats Matt, you are now rich!! So embrace your new found affluence.
Well our fine governor didn’t actually say I was “Rich”, just that I had “More of an ability to pay”
So apparently the new “Line” is not “Rich” vs “Poor” but simply “If you have more money than anyone else you pay more”. Eventually I’m assuming the government will catch on that everyone has more money than someone else expect those that have no money and we will all “Have more of an ability to pay more”
We won’t need “The rich” just people that “Have more ability”
~Matt
selectively invalidate a contract, we are in serious trouble as a nation
I don’t like the “selectively” part of this action so I agree with you there. I guess, what I am saying I would have been fine with, is if these terms were agreed upon upfront as conditions of the new agreement. Yeah, sorry, we’re bailing you out, you want the money, old contract is no longer valid.
So I guess more accurately it’s the combination of the selectiveness and retroactiveness that I don’t like. Selectiveness by itself wouldn’t bother me so much.
As I said, this whole thing reminds me a bit of the Terry Schiavo fiasco.
“Eventually I’m assuming the government will catch on that everyone has more money than someone else…”
Technically, there must be at least one exception. 
A new agreement with those terms you mention would have been good. But they didn’t do that. In fact they amended a bill (Dodd) to allow the AIG bonuses. It all goes back to these dipshits not even reading what they pass.
We won’t need “The rich” just people that “Have more ability”
1.They suck my body out
But friend there is no doubt
I’m gonna pay the devil his dues
Cause I’m sick of being abused
Eat the rich, eat the rich
Don’t you know life is a bitch
Eat the rich, eat the rich
Out of the palace and into the ditch
*Eat the Rich, *Krokus (a vastly underrated 70s and 80s heavy metal band from Switzerland, of all places ;-).