Dear A.I.G., I Quit!

@DrewDad,

That is a little extreme DrewDad, don't you think?

An act by a democratically elected Congress in full view of public is not "mob rule"... even if you don't like the outcome.

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@Robert Gentel,

My friend I know that this man in his position had gain greatly over his working life because of a set unjust rules/conditions set up for the upper classes for the benefits of the upper classes by the upper classes and if he get hit by an ‘unfair’ give back this time I could cry tears.

The country for at least two generations had been way out of balance in it rewards and as the old swing return somewhat back to the center some of the people who had setting pretty for those two generations are going to get slightly harm.

This is nothing new the poor men who fought in the revolution war was pay with worthless paper and not being able to hold on to this paper for over a decade in the hope congress would make good on their promise sold said paper at a few cents on the dollar.

Congress then decided to pay in full on the Revolution paper at the request of those investors and they got very wealth at the expense of the men who bleed real blood fighting for our freedoms.

That kind of a situation I might be willing to cry for but not the one we had been talking about.

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@BillRM,

You don't know anything about the guy, much less what he is or is not responsible for, but you are willing to pin the blame on his ilk blindly. This is exactly what I'm talking about.

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I want to make my position clear (and separate myself from other arguments being made). There are two issues...

First, I think it is reasonable for the Congress (as representatives of the taxpayers) to insist that bonuses be cut as a condition of a bailout. I would accept this if this happened in my company (assuming that my company was on the rocks and there was no other option). Of course there may be legal issues that I am not aware of-- but I support the basic principle. If I am going to bail out a companies, I don't want executives to receive excessive bonuses.

Second, I think the anger leveled at executives in the financial industry is justified. They are the ones who run the financial system we depend on-- and they make obscene amounts of money doing so. Part of the reason they are supposed to be making these sums of money is the risks they take-- meaning that pain they feel on down times (if losing 40% of 10 million dollars can be considered pain) is part of the game.

Robert... I get your point that this particular AIG employee did not directly hurt Rabels 401K plan. But don't push this too far. The crash financial industry in general has undeniably hurt lots of Americans-- not just 401K plans, but also jobs and housing etc.

It was financial executives who profited from the system that now is crashing. It is they who set up the system favoring short term gain over long term stability.

The idea of moral equivalence between financial executives and normal working Americans is a hard sell.

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@Robert Gentel,

Where did I pin any blame for anything on this one man?

I just said I do not feel like crying over the "unfairness" to him when he is still likely to be better off then 99 percent of the population.

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@ebrown p,

ebrown p wrote:

First, I think it is reasonable for the Congress (as representatives of the taxpayers) to insist that bonuses be cut as a condition of a bailout.

So do I, but it's worth noting that this is not what happened.

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If I am going to bail out a companies, I don't want executives to receive excessive bonuses.

I haven't seen any evidence that these bonuses are excessive. I think AIG was politically retarded to call them "bonuses" but paying a VP a dollar in salary with a "bonus" at the end of a year did make sense for the company in order to retain the individual.

It's commonly bandied about here and elsewhere that they shouldn't be keeping the people that ran the company into the ground, but I've yet to see one instance of such a statement where the individual in question actually did so.

The ironic thing is that these individuals don't represent the cause of the financial crisis, and their bonuses constitute less than 1% of a bailout that is largely going to go to banks that did have direct participation and all the noise is about the bonuses because they are more "tangible" to the average American. It's a very odd fraction of a percent to be on a witch hunt about. Of all the people involved in the bailouts, this particular group of individuals doesn't deserve to bear the brunt of the public's anger just because of the public's inability to comprehend the situation.

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Second, I think the anger leveled at executives in the financial industry is justified. They are the ones who run the financial system we depend on-- and they make obscene amounts of money doing so.

Is their compensation the reason you think it's justified? Or do they actually have to have committed some form of wrongdoing?

Quote:

Robert... I get your point that this particular AIG employee did not directly hurt Rabels 401K plan. But don't push this too far. The crash financial industry in general has undeniably hurt lots of Americans-- not just 401K plans, but also jobs and housing etc.

Would you support the same generalized anger at racial demographics? Or is it just economic demographics and industry labels that you think can be blindly attacked?

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It was financial executives who profited from the system that now is crashing. It is they who set up the system favoring short term gain over long term stability.

You are starting to remind me of this part of the last South Park episode:

I thought it very fitting that they included Cartman's speech as the others are of the same blindly discriminating ilk.

There certainly are many in the financial industry that are responsible for big mistakes that contributed to this crisis, and I want to start a thread about the specific people and the specific things they did as time permits, but the generalized "they took our economy" line is bullshit.

"Wall Street" didn't do this, no matter how much America want's to absolve themselves of blame by pretending they did. There were those on Wall Street who contributed, but there were those on "main street", and in the government as well.

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The idea of moral equivalence between financial executives and normal working Americans is a hard sell.

It's supposed to work a bit differently. If you want to paint them as guilty of something, you are supposed to sell it as opposed to your interlocutor selling you on their innocence.

Did you know of any specific wrongdoings by these individuals in AIG? Or are you just subscribing to the generalized and poorly-informed public anger?

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@BillRM,

BillRM wrote:

Where did I pin any blame for anything on this one man?

You didn't, which is precisely the point.

Quote:

...this man in his position had gain greatly over his working life because of a set unjust rules/conditions set up for the upper classes for the benefits of the upper classes by the upper classes...

You can't show that this man has done a single thing wrong, but you subscribe to the general anger against his economic class.

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@Robert Gentel,

So what he got hurt because the rules change as we all had gotten hurt from time to time due to such changes.

Why should any one care about his situation when people are being harm to a far larger degree by the millions due to the rule on credit etc being change.

I feel far worst for a car saleperson who loss his job, his family health insurance and his home because banks will not grant car loans to even good credit risks.

I can only feel like cheerfully waving good-by to the man as the owner along with the rest of the taxpayers to this man firm.

With the job market being the way it is I am sure we can replace him more cheaply before his rear end hit the door.

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@BillRM,

BillRM wrote:

Why should any one care about his situation...

I've said many times that I'm not advocating that anyone care for his situation or for him personally.

I'm advocating against the mindless class conflict that you have been a good example of, I'm not asking anyone to feel sorry for him.

This sympathy shtick must be practically instinctual in some people, it's their only stock and store.

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@ebrown p,

ebrown p wrote:

That is a little extreme DrewDad, don't you think?

Nope.

Our nation supposedly protects minorities against the depredations of the majority. My hope is that if Congress does enact some punitive legislation that it will be thrown out by the courts.

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@Robert Gentel,

What mindless about class conflict? The ruling class is the one that been setting the rules to benefit them and increasing the overall percent of the total wealth of this society in their hands for the last few genertions and it time to swing this back.

And I hate to tell you this but the overriding percent of the ruling class have zero to do with increasing the total wealth either and of late had been the class as a class that had cause a large decrease in the society total wealth.

When the wealth of any society get out of tune and power and wealth get into to few hands then the society become unstable see the French Revolution for an example.

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@BillRM,

Oh just to enlarge my viewpoint the founders of my former company created real wealth in the billions of dollars range by creating new technology and bringing it to the market place.

They also created thousands of middle class jobs for decades and when at their death the company was sold the family share 400 million dollars of the sale price with the employees base only on how many years you been with the firm.

Nice people who for the most part if you ran into them you would not know they had any great wealth. It can be strange seeing a man who net worth is listed at 500 million driving himself around in a car older then most of his employees drive!

The current CEO who had zero to do with creating the firm and had off shore everything that could be off shore and taken a number of steps that had proven bad in the long run causing the credit rating to drop for example. Oh he had also lied directly to the employees something I had never known the founders to do.

The company only employee group that had shown a growth is the number of Vic Presidents with the number roughly four to five times what it was when the founders was in charge.

All in all I have nothing at all but respect for the small percent of the ‘upper class’ that had created the wealth and nothing but disrespect for the bulk of the economic upper class that had gotten there by rigging the system not by ability.

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Here's a response that sums up my attitude about DeSantis.

Not that that excuses the political grandstanding going on.

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@DrewDad,

Matt Taibbi didn't seem to have paid enough attention to retain the basic facts. For example, in this part of his rant, he seems to have forgotten that the individual is working for a dollar salary and the bonus is, in fact, his entire compensation.

Matt Taibbi wrote:

First of all, Jake, you asshole, no plumber in the world gets paid a $740,000 bonus, over and above his salary, just to keep plumbing.

He can take issue with how much the man is being compensated, but the fact remains that this is his only compensation this year from the company. And aside from the political stupidity of doing so the way this compensation is structured makes sense to the company. They essentially asked their employees to work for no salary and for their compensation to come in the form of "retention bonuses" after a year. This is a legitimate strategy if you want to ensure that they stick around for at least that long. The company gets to defer the entire salary and the employee only gets paid if they stick it out.

So these aren't "bonuses" in the traditional sense of the word, this is a legitimate structure to retain employees for a negotiated period of time. This is not the corrupt bonus to insiders that it is being portrayed as by politicians on their soap boxes. Taking issue with the amounts they are being paid is one thing, but I've seen no talk of what an appropriate amount would be and all the focus I see is merely on the fact that this compensation structure involved something that is called a "bonus".

I don't see anyone saying "he worked for a $1 a year, and is getting a $700,000 (after tax) 'bonus' but how much should that really be? Is that too much?" but rather just calling for their heads (sometimes literally) and jostling to express the most outrage that "bonuses" are being paid at all when the company's performance obviously doesn't justify it.

This is a misrepresentation of what is actually happening. They aren't rewarding performance. This is a compensation structure that would be perfectly sensible if it weren't for the predictable uproar it would cause.

If we are going to spend billions bailing out this company we shouldn't stupidly make it a scapegoat at the same time. This small financial division will control a huge amount of money and we should want the individuals responsible not to be underpaid as much as we want them not to be overpaid.

I personally don't know if they are being overpaid, but I haven't seen any indication that anyone in the pitchfork crowd does either. It doesn't seem like it matters for them and quite frankly with that much public money on the line it should.

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@Robert Gentel,

IMO, the compensation plan does not make sense. The $1/year "salary" appears to me to be spin control.

Then, when the people were due to actually get paid, they got caught.

Stupid, stupid, stupid.

They should have had a rational compensation plan to begin with.

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Here's a very interesting article on cheating and stealing:

http://www.ted.com/index.php/talks/dan_ariely_on_our_buggy_moral_code.html

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@DrewDad,

DrewDad wrote:

IMO, the compensation plan does not make sense.

Why doesn't it make sense to you?

Quote:

The $1/year "salary" appears to me to be spin control.

What evidence leads you to this conclusion? Do you know when the salaries were agreed upon?

Quote:

Then, when the people were due to actually get paid, they got caught.

Caught? What on earth are you talking about? Just because Obama decided to get on a soap box all of a sudden doesn't mean this was a surprise to anyone or hidden at all. Everyone knew about this, and they didn't suddenly get "caught" so much as Obama suddenly decided to express political outrage over it.

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@Robert Gentel,

Salary is salary and a bonus is to reward work beyond the amount earn in normal salary. A dollar a year salary and a bonus in the range of millions is game playing.

Sorry the game was call <not> and they ended up with their dollar a year salary.

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@Robert Gentel,

Robert Gentel wrote:

DrewDad wrote:
IMO, the compensation plan does not make sense.

Why doesn't it make sense to you?

IMO (and I stress opinion), it's silly grandstanding. They could have paid an actual wage with a bonus at the end.

Robert Gentel wrote:

DrewDad wrote:
The $1/year "salary" appears to me to be spin control.

What evidence leads you to this conclusion? Do you know when the salaries were agreed upon?

The way I read DiSantos' letter, it appears that it was after the mortgage losses were known.

Robert Gentel wrote:

Quote:
Then, when the people were due to actually get paid, they got caught.

Caught? What on earth are you talking about? Just because Obama decided to get on a soap box all of a sudden doesn't mean this was a surprise to anyone or hidden at all. Everyone knew about this, and they didn't suddenly get "caught" so much as Obama suddenly decided to express political outrage over it.

That's not the timeline I remember. As I recall, the media reported the bonuses, voters got upset, and then the politicians trumpeted their outrage.

Plenty of idiocy to go around. AIG's idiocy in paying "bonuses" instead of a wage, politicians' idiocy in trying to retroactively punish the employees, and DiSantos' idiocy in writing an op-ed piece.

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@DrewDad,

DrewDad wrote:

IMO (and I stress opinion), it's silly grandstanding. They could have paid an actual wage with a bonus at the end.

If it was grandstanding why did you know of the bonuses long before the $1 salary?

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The way I read DiSantos' letter, it appears that it was after the mortgage losses were known.

I see, so you see this as "spin" for the mortgage losses. I'd thought you were speaking of a spin for the bonuses, which would have made a lot more sense.

Frankly, I don't see how anyone would see structuring the compensation this way as a positive way to "spin" this. They'd have been better off politically doing it any other way.

It really does seem they were trying to secure a particular group of people for a particular duration of time to me, and I actually think as far as "spin" is concerned they went about it the worst possible way.

Quote:

That's not the timeline I remember. As I recall, the media reported the bonuses, voters got upset, and then the politicians trumpeted their outrage.

That's a very recent timeline (as in for March). Ultimately, this has been known for quite a while, and everyone waited till it was paid to begin really talking about it.

NY Times wrote:

The Treasury and Federal Reserve officials said they had known about the bonus program as far back as last fall.

http://www.nytimes.com/2009/03/17/business/17bailout.html?_r=1&ref=todayspaper

What bothers me in this timeline is that the right time to do it would have been in the negotiations for bailing out AIG in the first place, just like with the auto industry. But they let the people work on this contract and waited till they were paid to begin to clamor for it.

It may sound like a trite issue, but this is at the center of the most objectionable parts to me. Before we bail out AIG we have real bargaining power that is legitimate. Now we have very dubious methods like taxation.

It's not like they were just "caught" red-handed and the public needs to pay. The public's representatives in this have not done their due diligence and are using moral outrage to deflect from the government's role in this process.

They handed out billions without enough strings, knew about this issue for months, and then decided to play "look, bad bankers!" and surf the public anger.

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Plenty of idiocy to go around. AIG's idiocy in paying "bonuses" instead of a wage, politicians' idiocy in trying to retroactively punish the employees, and DiSantos' idiocy in writing an op-ed piece.

In regard to AIG I really don't get why the mere compensation structure, as opposed to the amounts, is objectionable to anyone. If AIG were to pay the same bonuses in wage would you have a qualm? If not, what is the qualm with the name of how they are compensated?

As to the attempt to retroactively punish I agree, and really think that's a big part of what's driving the moral outrage, the desire to deflect from the irresponsible way the AIG bailout was allowed to start but your last part I don't get, what do you have against writing an op-ed piece?

1 Reply

Dear A.I.G., I Quit!

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