Monday, March 16, 2009

AIG Bonuses

Josh Marshall at Talking Points Memo sums up the mess with AIG bonuses pretty darn well:

Whatever else you can say about AIG CEO Edward Libby, he ain't much for irony. In his letter to Secretary Geithner he said that AIG "cannot attract and retain the best and brightest talent ... if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."

As noted yesterday, the bonuses are overwhelmingly weighted toward AIG's Financial Products division (AIGFP), the relatively small division responsible for the company's de facto bankruptcy and no little part of the world financial crisis.

With respect to AIGFP, there's no little snarking to be had about whether these folks are really the "best and the brightest." But it actually goes beyond that. It's not just the people. The whole division is toxic and should be shut down, probably the building should be razed and the ground salted. AIG is a ward of the federal government. Our only financial interest in it is in chopping it up and getting the best prices for the valuable parts of it. I don't think AIGFP is going to have a lot of takers. And as a matter of policy I think we probably want to close it down.

More generally, the idea that there are a lot of jobs on offer at the moment for credit default swap writers strikes me as dubious.

The other argument -- real, as far as it goes -- is that what we're trying to do is untangle a massive ball of twine these guys created. And as much as we might revile these characters we can't do without their help trying to get it unwound. Again, true as far as it goes. The problem, though, is that we're even entertaining the question on the retention/compensation front. The government has more options.

It appears that most of these guys should be doing a perp walk, and they're demanding bonuses. AIG should cease to exist.


Anonymous said...

The bonus payout excesses at AIG are just the tip of the iceberg of what is happening with the other Wall Street bailouts including Bank of America. Working productive Americans are bailing out the same crooks that destroyed our economy along with 45% of the wealth in the world and now the American taxpayers and our children will be forced to live a far lower standard of living with reduced prosperity and opportunities due to this but only we pay the price.

Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. Find out what a growing repudiate the debt movement could mean for treasuries, the dollar, gold and the stock market and how this is a better alternative than Washington’s plans to monetize the debt in future years and tax and destroy our remaining wealth by depreciating the dollar.

The Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is starting now in the U.S. See:

Reamus said...

So the guys that put the ball of twine together are the ONLY ones who know how to take it apart? They out to do it from jail.

troutay said...

I would think that in real life, if we did such a lousy job we would be fired. We wouldn't get a bonus.