Obama tries to block AIG bonuses

[iNow]

And, I'm not sure that you get my point.

 

Well, I think it's my point being missed, and also rather likely that I understand your point better than you do. However, I'm sometimes rather arrogant, and may be missing some subtle complexity in your posts, so who knows, eh?

 

 

I'm not talking about all the banks or car companies, I'm talking about AIG.

 

And it's comments like this which incline me to believe　that you really don't understand. If you're talking about AIG, then you ARE talking about banks and car companies. It's really that simple.

[Pangloss]

That's arguable, though. "Ideologically," a company should not write policies which they simply don't have the capital to cover. "Ideologically," that's really bad business, and ignores the reality of why insurance companies exist... Not purely as an entity in place to make money, but at its heart a company in place to cover losses for clients. That could very easily be argued to be an ideological error... After all, the "details" in this case spread throughout their ENTIRE business. It's not like some kid named Chuck in the IT department forgot a semicolon in his spam filter code. Now THAT would be a problem with details.

 

By ideological error I actually meant in terms of the wisdom of having the federal government bail out AIG. In terms of what you're talking about -- AIG's business model -- you could well be wright, but my gut feeling on it is that this is just another example of lack of the kind of lack of oversight that we're finding existed all over the place.

 

The actual product of that ideology ASIDE from the collapse has been phenomenally beneficial to society -- cheap home ownership, massive retail availability, extreme purchasing power -- we were living HIGH on the hog. And there's no particular reason to think we were exhibiting hubris unless these problems were uncontrollable, and I've seen no evidence to think that. I'm sure Hollywood will soon produce several movies that will inform us that we were playing with a fire that would always have burned us eventually, and we need to crawl back into our gold-standard caves where we belong, but that is not evidence. I need something more scientific than that.

 

What do you think? Am I way off base in my thinking here?

[iNow]

In terms of what you're talking about -- AIG's business model -- you could well be wright

Does that mean I'll be flying bicycles with wings in Kitty Hawk?

 

 

The actual product of that ideology ASIDE from the collapse has been phenomenally beneficial to society -- cheap home ownership, massive retail availability, extreme purchasing power -- we were living HIGH on the hog.

And here's where the issue resides. The question is, "Was it beneficial to society?" We are suffering now due to a false pretense of success. We were not living high on any hogs, but living high on a hog pinata... empty paper mache with with some candy inside, but no real sustenance or nutrients to enrich us and make us healthy.

 

Yeah, we were able to succeed at "acquiring stuff" for a lot of years, but the measure of success must be more robust than that, mustn't it? I would think that success would be measured in terms of "sustainability," and "collective good," not in more topical and shallow measures like, "I've got a flat screen and a Lexus."

 

I'm relying a bit heavily on the metaphor here, tonight. Sorry if my intent is not coming through clearly. I'll revisit this in the morrow.

[Pangloss]

In terms of what you're talking about -- AIG's business model -- you could well be wright

Does that mean I'll be flying bicycles with wings in Kitty Hawk?

 

Rofl. What I meant, of course, was that you could be Redenbacher.

 

 

The question is, "Was it beneficial to society?" We are suffering now due to a false pretense of success. We were not living high on any hogs, but living high on a hog pinata... empty paper mache with with some candy inside, but no real sustenance or nutrients to enrich us and make us healthy.

 

As I say you could be right (or wright!), but at the moment I see no evidence that that's the case. The fact that the standard of living was high doesn't automatically mean that it was a house of cards. The fact that it collapsed doesn't mean that it was bound to collapse. That's the Hollywood reasoning I referred to earlier, where effect proves cause. We have to do better than that.

 

And I think you're on the wrong side of the argument given your own predispositions. If what you say is true then we certainly don't need more regulation -- in fact we have to deconstruct the entire economy because it's ALL flawed.

 

As usual I think the truth is somewhere in between. Of course that's my predisposition anyway, to think that way, so maybe I'm biased on the subject.

[iNow]

The executives have every right to their bonus as guaranteed by their contractual agreement with AIG regardless of past, present, or future performance. If I were an AIG executive, I would fight tooth and nail for my bonus, as should anyone who thinks that a company should honor any of its contracts.

 

Well, if I were an AIG executive, I'd be spending some time researching the history of the decapitations which took place during the French Revolution, and searching for ways not to extend my neck across the guillotines cutting edge. While in normal conditions, your arugment would be more than sufficient, right now... The blood lust in the populace makes the above argument a self-imposed target on your back.

 

Take the longer term view and reject the short-term bonus. Not only that, but get on every media outlet you can proudly proclaiming that you've done exactly that. That's what I would do. It would set me up well later on when people are looking for trustworthy and informed voices, ultimately allowing me to make even more.

[DrDNA]

Well, I think it's my point being missed, and also rather likely that I understand your point better than you do. However, I'm sometimes rather arrogant, and may be missing some subtle complexity in your posts, so who knows, eh?

 

 

And it's comments like this which incline me to believe　that you really don't understand. If you're talking about AIG, then you ARE talking about banks and car companies. It's really that simple.

 

That's nice.

Did you get beat up a lot when you were a kid?

 

Back to the facts.....................

 

1. It is amusing that people that know a lot more about economics than most of us (including you.....unless you happen to have a Nobel Prize in Economics stashed under your bed.....) thought/think that Chapter 11 for AIG was/is a better idea than just throwing money at it.

 

For example:

 

1.a.

I think we probably should have allowed AIG to have gone down. [/Quote]

Joseph Stiglitz; 2001 Nobel prize in economics; Columbia University

Wall Street Journal; 18 January 2009

 

1.b.

Trickle-down economics almost never works. Throwing money at banks hasn't helped homeowners: foreclosures continue to increase. Letting AIG fail might have hurt some systemically important institutions, but dealing with that would have been better than to gamble upwards of $150bn and hope that some of it might stick where it is important.[/Quote]

Joseph Stiglitz; 2001 Nobel prize in economics; Columbia University

8 March 2009

http://www.guardian.co.uk/commentisfree/2009/mar/06/useconomy-useconomicgrowth

 

 

2. And I really like this article from November '08 Wash Post- written after we gave AIG the first $143 billion.

 

Effectiveness of AIG's $143 Billion Rescue Questioned

By Carol D. Leonnig

Washington Post Staff Writer

November 3, 2008

 

A number of financial experts now fear that the federal government's $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing.

The Treasury Department leapt to keep AIG from going bankrupt on Sept. 16, and in the past seven weeks, AIG has drawn down $90 billion in federal bailout loans. But some key AIG players argue that bankruptcy would have offered more structure and greater protections during a time of intense market volatility.

 

AIG declined to comment on the matter.

 

Echoing some other experts, Ann Rutledge, a credit derivatives expert and founding principal of R&R Consulting, said she is not sure how badly the financial system would have been rocked if the government had let AIG file for bankruptcy protection. But she fears that the government is papering over the problem with a quick fix that was not well planned.

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"What we see now are a lot of games by the government to keep these institutions going with a lot of cash," she said. "This is to fill holes in companies' balance sheets, and they're trying to hold at bay the charges that our financial system is insolvent."

 

The deal that the Treasury and the Federal Reserve Bank of New York pressed upon AIG was intended to stop any domino effect of financial institutions falling because of their business ties to AIG. The rescue allowed AIG to provide cash to huge banks and other players who had invested in rapidly souring mortgages insured by the company.

 

Early this year, investors had begun privately demanding that AIG pay off its billion-dollar guarantees. But in mid-September, when the demands for cash reached a public crescendo, AIG had to admit that it didn't have enough cash on hand to meet the obligations.

 

In the first weeks of its federal rescue, AIG has used the loan money to post collateral demanded by these firms, sources close to those deals say.

 

"No one else benefits," former AIG chief executive and major shareholder Maurice R. "Hank" Greenberg wrote to AIG's current chief executive on Thursday. "Unless there is immediate change to the structure of the Federal loan, the American taxpayer will likely suffer a significant financial loss."

 

Another concern is that in this depressed market, AIG, and the taxpayers that now own 80 percent of the company, will lose coming and going.

 

The company may be forced to borrow additional federal funds for rising payouts to counterparties. Neither the government nor AIG is releasing information about the specific amounts paid to individual firms, but numerous credit experts say that the value of those mortgage assets is probably declining every week. That means AIG has to pay a higher price as part of its guarantees.

 

The company also may be forced to sell many more assets at low, fire-sale prices. As part of its loan deal, AIG was to sell some assets -- valued at $1 trillion before the crisis -- to raise cash to pay off the loan.

 

Products and Goldman Sachs about the value of those assets when Goldman called for AIG to post collateral. AIG's chief financial officer warned of "Goldman's acknowledged desire to obtain as much cash as possible." But AIG's external accountants warned that it was they who alerted management to the dispute, not AIG Financial Products, and that the division was not properly considering the market in its pricing.

 

Rutledge warns that because there has been no public disclosure of AIG's payments to counterparties, it is impossible to know whether the pricing it is using now is proper.

 

The Federal Reserve and its advisers have acknowledged privately that things are not going according to plan.

 

As AIG has rapidly eaten through the loan money, the Fed has twice expanded its original $85 billion bailout -- which itself was the largest government bailout of a private company in U.S. history. Earlier last month, the Fed reluctantly gave AIG $38 billion more in credit for securities lending to try to keep the firm from drawing down its first Fed loan too quickly.

 

Then on Thursday, the Fed agreed to let AIG borrow $20 billion from a larger commercial paper bailout fund it had set up days earlier for all institutions that lend money to each other.

 

***If the company had filed for Chapter 11 bankruptcy protection, AIG could have frozen the crippling collateral calls, and shareholders would have had a chance at recovering some value from the company's 80 percent drop in stock price from earlier this year, said Lee Wolosky, a lawyer for AIG's largest shareholder, Starr International.***

 

"AIG is nothing more than a pass-through being charged 14 percent interest," Wolosky said. "Company assets are eroding on a daily basis; asset sales have not begun and can only be at fire-sale prices in the current market. "

 

But David Schiff of Schiff's Insurance Observer said he could not see how bankruptcy would have been a better solution.

 

"The point isn't to save AIG; it's to save the U.S. financial system. I think they were afraid to find out who else goes under if you let AIG fail," he said. "But right now, no one knows if this is going to work."

[/Quote]

 

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/02/AR2008110202150.html

 

3. So, Chicken Little, we all know that the sky is falling and it will fall faster if we don't throw MORE mud money at AIG's wall.

 

But, other than the fact that the sky is falling, and David Schiff's statement above (which I have provide you) what rational and logical explanation or information do you have which has convinced you that giving more money to AIG is going to turn out differently this time and have a positive result in the long run?

 

Please share it, because I need enlightenment.

 

I suspect that it because Mr Obama (who I actually admire) worshipers (ie, NPR, MSNBC, CNN, Air America, etc)have said this unsubstantiated lie 1000 times, so now it has become truth?

I think it is, but would actually love to be convinced other wise.

 

You are, after all, a self professed financial expert, so you must have something(s) that you are holding back.....

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Consecutive posts merged

When an airline is under bankruptcy, people will still fly with them if the price is right. Not so sure with banks or even car companies. They need to be there longer than just a flight to do business with them.

 

I have given this more thought.

I apply and stand by my statements in relation to the auto industry also.

In other words, let the car companies restructure along with the buggy whip manufacturers.

Edited March 19, 2009 by DrDNA
Consecutive posts merged.

[iNow]

You are, after all, a self professed financial expert, so you must have something(s) that you are holding back.....

No, I just said that I probably understand your point better than you do. The only thing holding me back is a lack of desire to repeat myself, again. Take it easy, friend.

[Pangloss]

You really can't establish fact with Nobel Prize economists, because there's always a Nobel Prize economist out there who thinks differently from your Nobel Prize economist. That's one of the problems with economics -- there is no established factual foundation forming a basis for correct or incorrect economic decisions.

[ParanoiA]

Well, the banks started collecting the insurance due to too many unpaid loans and mortgages, resulting in mounting losses. AIG, although at fault for guaranteeing/insuring so many of the various banks policies despite their failure at meeting capital requirements for those policies...

 

Are they at fault for that though, or is that the model? Remember, our banks are fractional reserve, so they're at fault for the EXACT same thing, and even moreso since I believe they only need 10% of their reserves - which means they only have 10% of the capital requirements for their respective "policies" or accounts. We don't poo on them because it's part of the fractional reserve design, so do we know if AIG was actually at fault for anything or did they just fail? There's a difference.

 

One implies they reap what they sow, the other is simply the business end of risk.

 

 

I'll tell you, I was initially on the slay-them-all bandwagon concerning these bonuses, but there's some detail lacking in indicting these people. Maybe it's all my personal ignorance, but I'm having reservations and I think it's because I'm guilty of indignant presumption concerning these people. How do I know that all of these people are guilty of bringing the company down? If one guy's merit bonus is based on how effective he can cut costs and he did that successfully, then why shouldn't he get his bonus? He didn't bring the company down at all, and probably saved us money actually.

 

Another point that was brought up yesterday, is why aren't we cancelling the bonuses enjoyed by government employees? Based on the same logic, our budget is in tatters, we're in horrible financial shape, getting worse daily, why does anyone in our government deserve a dime of a bonus? They've failed. They deserve nothing. If we're going to judge AIG's actions, justified by our prominent ownership, then why are we not doing the same with the rest of the failing government entities?

[ecoli]

Has anybody considered the possibility that paying out the bonuses, in addition to being a legal issue, makes business sense?

 

I mean, who here, the lynch mob in Washington and in the media, actually knows how to run a large corporation?

 

Granted, lots of people at AIG made mistakes when it came to insuring mortgage derivatives, but would you honestly trust that the corporation management decisions would be better made by politicians than by actually businessmen?

 

I hear a lot of anger from people who are completely clueless. Most of us don't understand how the corporate world works or what makes a successful corporation. We're simply assuming that anything the CEOs are doing cannot possibly work, because they haven't learned from their mistakes. Well, if that's true, why the hell did they get bail out money in the first place? And, now that they have it, do we really thing Chris Dodd or Barney Frank won't screw things up even worse?

 

Remember these are career politicians, and this has now become a political issue. We can no longer trust that politicians are doing the best thing for AIG's continued success vs. helping their own political careers by looking good in the media.

 

Am I the only one here that isn't so arrogant to assume that I could do a better job at running AIG than the AIG execs?

[swansont]

Another point that was brought up yesterday, is why aren't we cancelling the bonuses enjoyed by government employees? Based on the same logic, our budget is in tatters, we're in horrible financial shape, getting worse daily, why does anyone in our government deserve a dime of a bonus? They've failed. They deserve nothing. If we're going to judge AIG's actions, justified by our prominent ownership, then why are we not doing the same with the rest of the failing government entities?

 

 

The government's pretty damn big, by corporate standards, most of which have nothing to do with this, and we are led by elected officials who you can remove from office by not re-electing them. The non-elected top leaders are in most cases appointed and can likewise be removed, indirectly, via voting. And, I might add, do not get bonuses, or even salaries that compare to the CEO pay of institutions in this arena.

 

As to the rank-and-file, and lower management — how have they failed? How have my actions led to any of this mess? WTH are you talking about?

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I like the tax idea, but I suspect they can only recover what hasn't been paid out yet, or is the IRS exempt from ex-post-facto changes?

 

I have stumbled across the answer — apparently ex post facto only applies to criminal law. (And as along as the government targets everyone who got bonuses tied to TARP money, the bill of attainder provision probably doesn't apply, either.)

[ecoli]

Another point that was brought up yesterday, is why aren't we cancelling the bonuses enjoyed by government employees? Based on the same logic, our budget is in tatters, we're in horrible financial shape, getting worse daily, why does anyone in our government deserve a dime of a bonus? They've failed. They deserve nothing. If we're going to judge AIG's actions, justified by our prominent ownership, then why are we not doing the same with the rest of the failing government entities?

quite... congress is the first to give themselves raise and first to criticize other people getting raises. Except that business employees can't vote to give themselves money whenever they want.

[SH3RL0CK]

I'll tell you, I was initially on the slay-them-all bandwagon concerning these bonuses, but there's some detail lacking in indicting these people. Maybe it's all my personal ignorance, but I'm having reservations and I think it's because I'm guilty of indignant presumption concerning these people. How do I know that all of these people are guilty of bringing the company down? If one guy's merit bonus is based on how effective he can cut costs and he did that successfully, then why shouldn't he get his bonus? He didn't bring the company down at all, and probably saved us money actually.

 

However, AIG was certainly not obligated to award then regardless of how well any particular individual at the company did. And certainly any reasonable employee would/should understand that a company going through financial difficulties (such as AIG) might not award a bonus regardless of how well the individual did.

 

I'm strongly in the "fire them all" camp not because they received bonuses. Its because they clearly are incompetent, having caused AIG to fail. IF they were the "best and brightest" as they claim, then wouldn't the company have suceeded instead? Seriously, could baboons have done any worse? Baboons at least would not be as arrogant. Now I can't make a blanket statement for all of them, but certainly I can generalize as only one bad manager could not possibly have caused this level of failure.

 

Another sign of incompetence: what kind of manager hires other managers with guaranteed bonuses regardless of the overall company financials? That seems pretty stupid to me. You should instead set a goal for that individual and promise any bonus should the overall company financials permit it .

 

I work for a company where the management doesn't claim to be the best and brightest and its in pretty good financial shape, all things considered.

 

I do not believe it to be a systematic failure of the banking system because my neighbor is a bank president (for a small local bank) and they are in decent financial shape, despite the problems with the economy. Yes, times are not as good as they were, but the bank isn't going to go under. I really think congress should fire the AIG management team and hire him instead. He's probably paid well, but certainly not nearly what the management team at AIG was getting paid. And based on performance, he would certainly deserve better pay than them.

[swansont]

quite... congress is the first to give themselves raise and first to criticize other people getting raises. Except that business employees can't vote to give themselves money whenever they want.

 

Congress can't give themselves raises, technically. They can give raises that take effect with the next election cycle. 27th Amendment: No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.

 

So you can try to throw the bums out if you don't like it.

 

But more importantly, congress is only a tiny fraction of "the government"

[iNow]

I hear a lot of anger from people who are completely clueless.

Yes, and most of it is on the television, the radio, and internet forums.

 

 

Most of us don't understand how the corporate world works or what makes a successful corporation.

Please speak for yourself.

[Dudde]

Another point that was brought up yesterday, is why aren't we cancelling the bonuses enjoyed by government employees? Based on the same logic, our budget is in tatters, we're in horrible financial shape, getting worse daily, why does anyone in our government deserve a dime of a bonus? They've failed. They deserve nothing. If we're going to judge AIG's actions, justified by our prominent ownership, then why are we not doing the same with the rest of the failing government entities?

 

I have to disagree with this argument. The government is an organization that depends a lot on taxes made from how well economy flows in it's country, at least ours is. Once the larger corporations started failing and dying off, their revenue decreases dramatically - and because we've already established (somewhere) that government shouldn't have any say in the regulating of corporations, you can hardly blame them when the companies start flopping belly up. I agree with how crappy the government is up to about 4 months ago - I haven't had sufficient time to let Obama try what he's going for, but we backed an ******* of a president for 8 years while he put our noses in the ground, I think we can give the guy more than 3 months.

[ParanoiA]

As to the rank-and-file, and lower management — how have they failed? How have my actions led to any of this mess? WTH are you talking about?

 

Precisely, so why are we doing it to AIG? If it's not good for our public organized crime corporation..er government, then why is it good enough for AIG?

 

This is my issue. We all act like they're a bunch of thieves, yet no one is guilty of any crimes and we don't know what these bonuses are rewarding, nor are we concerned about individual culpability - just burning the whole thing down because they needed bailing out. We're presuming guilt, rather than assessing failure. And that doesn't seem productive at all, although it just feels good to stick it to people who have performed better in trade than the rest of us, I suppose.

 

I'm not really making an argument for or against anything, as much as I'm making an argument for critical thinking. Stop with the witchhunts and explain logically why all of AIG needs to give up bonuses AND how that is a good business model for them to compete with.

 

Tell me how that's a good method to compete in our market. Remember, we're supposed to be "bailing them out"...the assumption being that we want them to stay in business. To stay in business, you must risk and compete - the same things that got them into this mess. If we're not willing to let them compete, then why bail them out at all?

 

How do we know AIG isn't simply suffering the business end of risk in a recessive capitalist economy? There are plenty of insurance companies and there's billions being lost here, somebody has to fail even if they were thoughtful and shrewd business entities. I simply question the motives behind stripping these bonuses. It seems premature, and immature.

 

It fits our emotive objections and that should always send red flags to our logic centers.

[jackson33]

Congress can't give themselves raises, technically. They can give raises that take effect with the next election cycle. 27th Amendment: No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.

 

So you can try to throw the bums out if you don't like it.

 

But more importantly, congress is only a tiny fraction of "the government"

 

The 27th A, was proposed 9/27/1789 (not a typo) and was one of the 12 original, 10 of which called our Bill of Rights. Interest in reviving the Bill came about by States trying to keep their legislatures from voting themselves pay raises. Between 1978 and 1992, 33 States ratified this Bill and it became the 27th A, discontinuing of pay raises for members of any current Legislature.

 

You can only throw your own 'bum' (HOUSE of Representatives), or your two senators over a six year period. All the 'bums' play this fact and do whats needed to maintain their office, if they really want to...That "tiny" fraction of the government happens to make ALL the legislation, provide oversight (as desired) and since even the House is dependent of the Senate those 100 people, hold more power than the Executive Branch or in fact the Judicial, IMO.

 

 

ecoli; I agree with you, that very few people understand the Capitalist System or what it takes to achieve success, including most all members of Government or in the general public. Probably less than .001% of any sector becomes a household name, while the majority fail along the line, go bankrupt taking their money and bankers/investors to some degree along with them.

 

Dr DNA; While I follow and agree with your argument for Chapter 11, not only for AIG, but for the Banking failures last year, Fannie/Freddy were backed by the Federal Government and the resulting problems IMO. Congress, Bush/Paulson and the problems seen Sept/Oct, were not seen or could have been and the original thoughts were more to averting rather than fixing a problem. Said another way F/F couldn't or can't just go Chapter 11.

 

One example, I like to use for recovery under Chapter 11, since somewhat involved myself, was Best Products, a retail brick and mortar Company which began to fail in the late 1980's. Lots of folks lost money, jobs and many others were never satisfied, but they came back as BEST BUY, becoming the 1990's number one stock investment for that decade. They now have several times the original stores and employ many times what had been lost and even today are strong, say to their competitor Circuit City, which just files Chapter 7....

 

Who ever said the 'Bill of Attainder' can't apply to AIG; IMO, Fox's Napolitano and a few dozen others, it most certainly does apply and you should hope it's upheld. Congress cannot arbitrary approach any group or individual for any reason, ESPECIALLY when receiving Federal Funds. I would grant you it is done by agreement (arguably illegal) or that they (Congress) can pass laws for all people (inflicting more harm on some than others) but they have no business accusing or establishing punishment, with out due process.

[The Bear's Key]

The actual product of that ideology ASIDE from the collapse has been phenomenally beneficial to society -- cheap home ownership, massive retail availability, extreme purchasing power -- we were living HIGH on the hog.

Actually, less than 1% of us have extreme purchasing power and lived HIGH on the hog. Many others with nice goodies are just renting (lease), and take 30+ years to pay a mortgage (not including any extra loans down the road, countering what they've already paid off).

 

Granted, a healthy percentage are well off, a great thing. But few have extreme purchasing anything.

 

And here's where the issue resides. The question is, "Was it beneficial to society?" We are suffering now due to a false pretense of success. We were not living high on any hogs, but living high on a hog pinata... empty paper mache with with some candy inside, but no real sustenance or nutrients to enrich us and make us healthy.

 

Yeah, we were able to succeed at "acquiring stuff" for a lot of years, but the measure of success must be more robust than that, mustn't it? I would think that success would be measured in terms of "sustainability," and "collective good," not in more topical and shallow measures like, "I've got a flat screen and a Lexus."

The measure of success does needs to be more robust. What's defined as success really matters, overall.

 

For example, the promotion of greed as being healthy tends to inflate the justification for shadowy entrepreneurship, which hurts everyone.

 

Let's contemplate some questions, then.

 

• Angry at deceit and corruption by Hollywood, lawyers?
  
• Upset by excess telemarketing calls?
  
• Wondering how peace can ever occur, when the business that's contracted to profit billions of $$$ in a war, must ensure its growth by creating demand (for its product)?
  
• Sick of commercials/ads that blatantly lie and misinform to keep profits rolling, to the detriment of those snagged by the hype?
  
• Tired of shysters, rip-off artists, peddlers of harmful foods/goods/get-rich-schemes?
  

Our answer might be: it's unwise to (nationally) flash a grin and thumbs-up for the concept of greed. By the neocons cheeleading a system of personal greed laced with a "me, me, me" attitude, they've stuck us to live in a neocon-tainted capitalism.

 

And while selective regulation of industry has been allowed by neocons, those exceptions -- and the complaints against regulation -- seem to be crafted on the formula below.

 

• If the regulation helps general busines owners AND the crooked players, it's a great law.
  
• If the regulation helps general business yet thwarts the crooked players, it's a bad law.
  

(The first type of rule doesn't interfere with their cheating. And the other weakens their bread-and-butter.)

 

AIG, although at fault for guaranteeing/insuring so many of the various banks policies despite their failure at meeting capital requirements for those policies, cannot be allowed to fail because their failure results in bank failures across the entire globe... many bank failures across the globe....

If that's the case, shouldn't other affected nations pitch in? Although, that might open up a can of worms....if other nation's banks would go under in the future, we'd be expected to pitch in (to fend off harm to our banks).

 

http://www.guardian.co.uk/commentisfree/2009/mar/06/useconomy-useconomicgrowth

Sounds nice, and I'd like to agree, however a better solution was carried out elsewhere previously -- and successfully.

 

http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?em

Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.

 

That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.

 

.............

 

By the end of the crisis, the Swedish government had seized a vast portion of the banking sector, and the agency had mostly fulfilled its hard-nosed mandate to drain share capital before injecting cash. When markets stabilized, the Swedish state then reaped the benefits by taking the banks public again.

 

More money may yet come into official coffers. The government still owns 19.9 percent of Nordea, a Stockholm bank that was fully nationalized and is now a highly regarded giant in Scandinavia and the Baltic Sea region.

 

The politics of Sweden’s crisis management were similarly tough-minded, though much quieter.

.

.

Another point that was brought up yesterday, is why aren't we cancelling the bonuses enjoyed by government employees? Based on the same logic, our budget is in tatters, we're in horrible financial shape, getting worse daily, why does anyone in our government deserve a dime of a bonus? They've failed. They deserve nothing. If we're going to judge AIG's actions, justified by our prominent ownership, then why are we not doing the same with the rest of the failing government entities?

What do you mean by government employees? If it's the office workers, errand-runners, and military underlings, then I disagree. But if you mean the elected leaders, I partly agree, yet only because it's unfair to those who deserve a raise.

 

A nice remedy, perhaps, might be for us to directly vote for who gets a raise and how much, based on performance. Then each leader has an incentive to do a great job.

[waitforufo]

So explain to me again how Obama is trying to stop the AIG bonuses????

 

http://abcnews.go.com/Politics/story?id=7121125&page=1

[swansont]

Precisely, so why are we doing it to AIG? If it's not good for our public organized crime corporation..er government, then why is it good enough for AIG?

 

We aren't. The bonuses being targeted are over $10,000. You want to do that to government employees, go right ahead.

[blike]

http://www.breitbart.com/article.php?id=D971964O1&show_article=1

 

WASHINGTON (AP) - Acting with lightning speed, the Democratic-led House has approved a bill to slap punishing taxes on big employee bonuses from firms bailed out by taxpayers.

 

The vote was 328-93.

 

Said House Speaker Nancy Pelosi: "We want our money back and we want our money back now for the taxpayers."

 

Republicans called it a legally questionable ploy to paper over Obama administration missteps.

 

-----------

 

Yes, Speaker Pelosi, I'd like my money back.

[bascule]

So explain to me again how Obama is trying to stop the AIG bonuses????

 

http://abcnews.go.com/Politics/story?id=7121125&page=1

 

By getting the treasury secretary to negotiate with AIG (if you read the original article)

 

It's pretty clear from that article the previous administration is largely to blame for this mess, but even so, Obama is out there saying "blame me" instead:

 

http://edition.cnn.com/2009/POLITICS/03/19/aig.fallout/index.html?eref=rss_topstories

 

That's pretty selfless of the guy... where Bush would've passed the buck at the first opportunity, Obama is not only saying the buck stops here, but taking the blame when the sh*t hits the fan.

[swansont]

So explain to me again how Obama is trying to stop the AIG bonuses????

 

http://abcnews.go.com/Politics/story?id=7121125&page=1

 

"This was a huge bill," Baucus said. "We agreed on structure. Then when staffs and Treasury get in the room and actually write it, that's where it got dropped. And frankly, it was such a rush, talking about the stimulus bill right now, to get it passed, I did not have time, other conferees did not have time to address many of the provisions that were modified significantly. We do the best we can, but we missed that stuff as a result."

 

What was that about Obama?

[Pangloss]

Actually, less than 1% of us have extreme purchasing power and lived HIGH on the hog. Many others with nice goodies are just renting (lease), and take 30+ years to pay a mortgage (not including any extra loans down the road, countering what they've already paid off).

 

I disagree. We had (and still have) the highest standard of living in our history, and more Americans were buying homes than ever before. Your accusation that they were stuck with 30 year mortgages is amusing because before they couldn't GET those mortgages. The American dream was coming true, TBK.

 

We just need to make sure that dream rests on a firm economic footing, that's all. Which means appropriate regulation. Surely you agree with this point?

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Merged post follows:

Consecutive posts merged

The corruption angle is starting to look legitimate and not just political. Chris Dodd admitted yesterday that he personally inserted key changes into TARP that allowed the executive compensation to take place. Dodd was the largest recipient of AIG election contributions, according to OpenSecrets.org.

 

http://www.chicagotribune.com/news/nationworld/chi-dodd_18mar19,0,1351121.story

 

Democrats are going to look pretty foolish going after these bonuses if they explicitly allowed them in the first place. What the heck kind of country are we running here?

Edited March 19, 2009 by Pangloss
Consecutive posts merged.