The federal government (that is, We the People) owns 80% of AIG...
AIG is in the process of doling out $165 million in more bonuses...
And, according to the Treasury Department, nothing can be done about it?
That's ridiculous. AIG got over $100 billion in federal bailout funds. That means the people charged with managing the company did not do a good job, by any measure. Bonuses are supposed to be a reward for doing a good job. So, why are these people getting bonuses? More to the point, why is AIG getting federal money?
I say, cut off the bonuses, and let it be known that that's just the way it is. If these people want their bonuses that bad, well, since AIG (standing in for We the People) claims to be contractually bound, make the execs sue the government for the money. Such a lawsuit is bound to be covered as much as possible by the media. Maybe the extra scrutiny is all that's needed to make them fall back and make do with the millions they've already been paid.
AIG also says they'll "work on reducing bonuses in future years by 30%," but they can and should be made to do better than that. As long as the government has a stake in the company, in fact, there should be no bonuses. Make that their motivation for getting the company back on the right track.
To be fair, AIG did not fall into such a deep hole only because of the stupid bets they made with their policyholders' money -- the hole got deeper after AIG started falling, but the company itself dug the original hole. AIG insures the banks and financial service companies that all fell so hard throughout 2008, so they would have landed hard no matter what. AIG is also one of the companies that has to cover the loss for airlines whenever a plane goes down. AIG actually insures ("reinsures") insurance companies. But they wound up falling into the hole in the first place, not because of any of that, but because they violated a cardinal rule of the insurance business: do not risk policyholders' money. When an insurance company begins making high-risk investments in the same mad grab for cash that endangered Wall Street, well, we've all seen the result. In this case, it means the government winds up owning 80% of what should by most accounts have been a private company gone bust. After all, AIG may be a huge company, but it's not the only reinsurer. If it had gone under, there are plenty of insurers that could have taken up the slack. The interim would have been quite bumpy for the policy holders, particularly for the airlines (at least it seems that way for me). Watching such a big company go bust, though, would have sent a message to other companies -- namely, that they shouldn't think they're somehow entitled to a bailout from the Feds. Now, of course, because of all the money that's been handed out, there's that much more anger from the public, because the fat cats have been bailed out but the general public, the ones who are out of work and competing with millions more people for the few jobs available, are only getting crumbs.
And then Dick Cheney goes on TV and says that the Bush administration shouldn't be blamed for the mess "that was handed to the Obama administration." Well, who handed it to them? And who made the policies that created the mess? Cheney also said that the previous administration "achieved all its goals in the campaign in Iraq." Well, that can be true only if its goals included enriching Cheney's friends in the military-industrial complex, companies like Halliburton, and Bechtel, and of course the oil companies that are making billion-dollar deals in Iraqi Kurdistan (I'll add the link when I find the Forbes.com article).
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