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Saturday, March 21, 2009

AIG Bailout: Where the Anger Lies

The anger lies on so many people that it's hard to determine who's really at fault.

Should we be mad at AIG for giving out millions of dollars in bonuses after receiving billions of dollars in bailout money?

Should we instead be mad at the government for giving them such a huge amount of money without a strong detailed ledger for using the money?

Should we be mad at our politicians who are stating they didn't know that AIG would be giving away bonus money even though there is evidence that AIG told them upfront?

Should we rather just be mad at the government for giving out that money in the first place?

Perhaps we should be mad at the millions of voters who voted for Obama because his administration has so generously decided to spend our great grand children's money.

Perhaps we should just be mad at all politicians who have either helped to increase the crisis or did nothing to avoid it... no matter who the president happens to be (McCain wanted bailouts as well, although he claimed his would be "different" and therefore, better... even though he wanted an AIG bailout... hmmm).

NOTE: There is too much proof out there to show that several politicians received money from AIG and therefore it's worth their time to give AIG a bailout rather than just letting them fail and file bankruptcy. If they had been allowed to file bankrutpcy, the contracts with the employees who received the bonuses could have been reworked.

If AIG has an employee who's salary is $50,000 a year but they only receive $40,000 of it throughout the year, wouldn't that employee deserve and have a right to the remaining $10,000 of his salary (so long as he has done well in his position)?

From a regular citizen's point of view, if I were paid in that manner and I had done my job to the best of my ability, I would demand the remaining portion of my salary. Even if the executives or owners had been stupid and ruined the company, I would still deserve my "bonus" (which isn't really a bonus, is it). Just because the head jerks of the company ruined the company, doesn't mean I did not do a good job.

There may be some people at AIG who are truly receiving a "bonus" and not the remainder of their salary and perhaps those people should just not accept the money this time around, I don't know. But for those people who actually need the rest of their salary, that money isn't a bonus, it's the food on their table and the roof over their head.

Ultimately, the whole bailout scam (and I do call it a scam because of the several different political angles of increased power) has been and in the future will be just a big waste of time and money.

Let them fail. If the government leaves us alone we can create new small businesses and hire those people who are out on the street. No matter what, the people who are receiving large salaries from these companies that are falling apart will need to lower their rate of pay and get their hands and feet dirty out here in the real world. It's okay to fail because with failure comes experience, knowledge and an increased ability to succeed the next time around.

Some additional info:

  • Obama And Congress Knew About AIG Bonuses For Months!
  • Take a closer look at AIG bailout - Instead, I was livid about the amount of American taxpayer money, through the AIG bailout, that had gone to foreign banks. If you think $165 million for executive bonuses is excessive, what is your reaction to the nearly $38 billion going to foreign banks?
  • Stop the Presses: Congress Is Angry! - I have a friend who was in Washington this week, and he stopped into Wednesday’s Congressional inquisition — oops, I mean hearing — into the A.I.G. bonuses. He stayed about 15 minutes and left when he couldn’t take it anymore. He didn’t know which was worse, he told me afterward: the way the A.I.G. financial products traders had conned the company into handing them bonuses — or the Congressional hearing complaining about the bonuses. “What a waste of taxpayers’ money,” he said. He was referring to the hearing, not the bonuses.
  • Looting 2.0 (Or, Why AIG Must Fail) - The presence of insurance when outcomes are asymmetrical massively dilutes incentives to act responsibly. The incentives that result are: heads, I win; tails, I still win. If I win a bet where costs might be imposed on everyone, I gain, and no one else does. If I lose a bet where costs might be imposed on everyone, everyone pays off my losses but me. That's looting — the subject and title of a classic paper by Romer and Akerlof, recently highlighted in the NYT's Economix blog.
  • Key Dems KNEW About AIG’s Bonuses!...

Chris Dodd and AIG Bonuses (and other info)

I'm really starting to like this guy... check out How the World Works for tons of other videos.

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May we each take the moment necessary out of this day and any day we feel the need to remember those who have gone before us in defense of our freedoms. Without them... we would not be "here"... we would be in chains. ~Bug~