Saturday, March 21, 2009

AIG Uproar: Still Stuck On Wrong

There is so much wrong in the uproar over AIG's bonuses that at this juncture there seems to be no chance of anything right happening.

First of all, the bonuses were not based on performance, as in "You did a good job, Sonny," but were highly negotiated instruments designed on keeping employees irrespective of their performance as AIG was going down the toilet owing to greedy managers and a bunch of possibly criminal derivatives traders.

While a convenient lightning rod for populist outrage -- real outrage out on the hustings and faux outrage inside the beltway -- the bonuses are less than 1 percent of the bailout money the insurance giant is receiving and a drop in the ocean compared to the trillions of bucks that the economy is hemorrhaging, let alone a projected $7 trillion budget deficit over the next decade.

Moving right along, the Obama administration knew about the bonuses but was concerned about being sued if they were not paid by a company that the government essentially owns.

And so Congress has now gotten into the act and passed a bill of dubious legality to tax the bonuses at a 91 percent rate.

A-freaking-hem.

2 comments:

Anonymous said...
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bobinfla said...

A freaking hem, yourself. You spent your whole working life as a newspaper reporter, so get it right, already. Congress didn't pass anything; only the House did.

That being said, yes, it definitely was a boneheaded move. I don't see the Senate continuing this disaster, though. And as Greenwald mentioned, there is a plus to this whole saga: Congress is getting the message that the public is pissed as hell & isn't going to take it anymore. Let's hope that more of our Congresscritters get that message.