Saturday, March 21, 2009

Points of View - AIG Bonuses

With all of the various rantings and ravings going on in the public, media, and Congress about the AIG bonus "debacle," it seemed appropriate to dedicate today's post to the topic. Rather than put all the editorials on here, I have put a short synopsis of each with a link. Choose the one(s) you like, and click on it to read the entire article (it will open a new window). The post will still be here to click on additional items when you get done.


Mass Hysteria Over AIG Obscures Simple Truths - By Michael Lewis - Bloomberg - "U.S. government officials then went to great lengths to disguise from the public exactly what they had done, and why, going so far as to declare the ultimate list of recipients of taxpayer funds off limits to the taxpayer... This incredible act triggered hardly any political backlash. In effect, the U.S. taxpayer had paid off AIG’s gambling debts. The end recipient of the money was not AIG, but Goldman Sachs, Deutsche Bank and the others."

The Case for Paying Out Bonuses at A.I.G. - By Andrew Ross Sorkin - New York Times - "Maybe we have to swallow hard and pay up, partly for our own good. I can hear the howls already, so let me explain."

Congress' Bonus Babies - By Investor's Business Daily - "The AIG Affair: As Barney Frank compiles an enemies list, Chris Dodd confesses he did in fact author the AIG stimulus loophole. So just who is going to go after those million-dollar retention bonuses at Fannie Mae?"

Mob Rule In D.C. - By Investor's Business Daily - "Like most Americans, we found ourselves angry and perplexed that a company that took $173 billion in bailout aid because it had failed to run its affairs competently would hand out $165 million in 'bonuses' to its top employees... Yet, as with many things, the tale is a bit more complex than the sound bite. For one, Congress authorized the bonuses to be paid — at the direct instigation of Sen. Chris Dodd, D-Conn., who took $103,100 from AIG during the 2008 political cycle."

Anger Mismanagement - Charles M. Blow - New York Times - "Keep working on a solution, but stop trying to manage and manipulate our anger. Stop trying to squelch, mollify and exploit it. Just let it run its course. America needs this moment... We don’t expect you to understand Main Street anger, but we do need to register it. After all, we know that there’s no Main Street in Washington."

The 102% Tax - Forget stabilizing the financial system. Congress is hungry for revenge. - By James Taranto - The Wall Street Journal - "This last point is crucial. The purpose of bailing out financial institutions--whether or not it was a wise policy--was to promote stability, for the benefit not of those institutions but of the economy as a whole. Congress's lust to punish employees of financial firms, regardless of whether they individually were guilty of wrongdoing or mismanagement, only promotes instability. 'It's like they're throwing a grenade at the problem, hitting the good and the bad at the same time,' Wall Street recruiter Gustavo Dolfino tells the Journal."

Also, a quick "hat tip" to Gerry Davidson for helping to keep me on the straight and narrow.

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