A Different Take on the AIG Bonuses…

Written by Scott

Topics: Archives, Uncategorized

I’m both perplexed and very amused by the fuss over the AIG bonuses, and my take on the issue may put me at odds with virtually all sides.

The first issue is the bonuses themselves. The bonuses were contractual, much like jobs that have a commission structure to them. For the company to deny that pay, it would be violating labor laws, and would violating the terms by which those employees were hired. You can quite easily argue that those bonuses should very well have been re-negotiated at the point the company’s solvency was in question, but they were not…even when the government became involved. But we’ll get to that part in a bit. The point is that the company HAD to pay those bonuses.

So let’s move onto the taxpayer money AIG received: the bloated, pork-filled stimulus bill that contained those funds was hastily written, forced upon the legislature and the American people, and few if any who voted on the bill actually read it. If there is to be any outrage, THIS is where it should be. How any legislator could vote to approve a bill they had not read is beyond belief, and frankly should be considered an impeachable offense, especially in this magnitude.

But why was it rushed? A new President, overly eager to show the American people that he was capable of action chose swift action rather than careful action, and accelearated it with a nice healthy dose of fear, telling the American people as often as he had the chance how critical the situation was, and how this was the largest economic crisis since the Great Depression. Which, if people had bothered checking, was nowhere near the truth. And then a few weeks after the stimulus was passed, our President reassured us that it was not nearly as bad as we think (or, apparently, as bad as HE had been telling us), and that the “fundamentals of the economy are strong”. [Remember the ridicule on McCain’s statement during the election of almost the same wording?].

The blame for this “scandal” isn’t with AIG. They should be blamed for failing, yes…and should have been allowed to reap the natural consequences rather than being propped up by the government. The blame for this lies with our Congressmen and Senators, with the Obama Administration, and more importantly, with the President himself. Because, after all, the buck stops with him, right? (Or in this case, the trillions of dollars of money our government doesn’t have…stops with him).

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3 Comments For This Post I'd Love to Hear Yours!

  1. Luke says:

    Very interesting take on this whole deal. I honestly hadn't considered the idea that the bonuses would be contractual…But you're right: It's incredible that our leaders signed off on a huge document that likely had yet to be read by them. ~Luke

  2. Anonymous says:

    Well written, Scott, and well thought out. Ironically, that's the exact opposite of what could be said about the stimulus bill!~Jannette

  3. Hello Scott, Great blog! I am the stay at home Dad and will start homeschooling out children later this year. My wife is a financial analyst and her take on AIG, the economy and the new administration's "fix". She called the current economic crisis over 5 years ago and he take is the "fixes" aren't and will only serve to prolong the problems. Her blog is very insightful and her writing is pithy, often tongue in cheek and humorous. I know that I am biased but she really is a good read. If youare interested, you can find her blog at <a href="http://storehousepartners.blogspot.com/http://storehousepartners.blogspot.com/<br />Thanks for a great blog.Blessings,Larryhttp://dadshomeschool.wordpress.com/