The Wrong Questions With The Wrong Replies

So there’s been a lot of anger about the AIG bonuses lately. Some­one I know recently Tweeted “AIG = Arro­gance, Incom­pe­tence, and Greed.” The Huff­in­g­ton Post put up this satir­i­cal post about why these bonuses were well-​deserved. If you didn’t know, AIG used bailout money to pay “reten­tion bonuses” to mem­bers of its Finan­cial Prod­ucts Divi­sion, which got them into their cur­rent dire circumstances.

AIG has stated that they must pay the bonuses for two rea­sons. First, because they are con­trac­tu­ally oblig­ated to pay. Sec­ond, because the peo­ple who got them into this sit­u­a­tion are the only ones who can get them out again, by unwind­ing their own mess. Yes­ter­day, NPR tore both of these argu­ments apart. First, the con­tract to pay bonuses was shady from the start. Deals to assure bonuses to an entire divi­sion are unheard of. Also, the lan­guage sug­gests that it was signed know­ing that the FP Divi­sion was in trou­ble and they were needed to unwind the prob­lems. As for the sec­ond argu­ment, indi­vid­u­als who have left the com­pany were still paid the bonuses, which seems to negate that defense.

Now, dif­fer­ent parts of the gov­ern­ment are falling over each other to be the ones to fix the prob­lem for the Amer­i­can tax­pay­ers. Obama told his staff to use every legal means to get the money back. AIG CEO Liddy asked his employ­ees to return “at least half” of the bonuses. The New York Attor­ney Gen­eral and the Con­necti­cut Gov­er­nor are both pur­su­ing cases to get the money back. And now, Con­gress is vot­ing to put a 90% tax on all bonuses paid by com­pa­nies sup­ported by bailout money as well as sub­tract­ing the bonuses from AIG’s next install­ment of bailout money.

Wouldn’t this have been a lot eas­ier if we hadn’t bailed out the banks in the first place? If only we had taken more bold action instead of try­ing to put a band-​aid on the trauma.

Tags: America, Obama