I am enjoying the torrent of outrage and vituperation over the AIG bonuses. Yes there should be outrage, but not at AIG. Like Chris Rock said about Manticore: "that tiger didn't go crazy, that tiger went TIGER".
Same here. Roy got mauled because an idiot got in a cage with a tiger. We are in the situation we are in because incompetent government bureaucrats got into a deal with a tiger.
They (said bureaucrats) either didn't think to ask, "hey are you planning any inconvenient bonus payments?" or they didn't care. Geithner must go.
Many people have said if the Gov. can force the UAW to renegotiate contracts, why not the same for the AIG bonuses? Well it seems like the difference is ex-ante vs. ex-post. Ex-ante, sure, you can put any conditions you want on aid and the other party can take it or leave it. Ex-post, not so much.
Of course, in true "lady who swallowed a fly" fashion, we are going to follow this government screw up with more hasty ill-conceived government actions to "fix" the problem. Wake me up when the get to the horse.
6 comments:
I do not believe it was a GOVERNMENT bureaucrat who established at AIG and other companies the notion that employees in charge of divisions that lost enough money to completely wreck the company should still receive multi-million-dollar bonuses.
It takes some twisting to blame the private-sector pathology on "government bureaucrats".
The government enabled this mess. If they hadn't bailed them out there would have been no huge bonuses.
What I find chilling is the plan to pass a bill that would enable the government to tax certain employees at certain companies at a 90% rate on bonus payments? That's scary - who will they come after next time?
Without the sanctity of contracts, there is no capitalism. If we have an agreement that you'll pay me $10K to replace the roof of your house in 5 days or $15K if I do it in 4 days; and I do it in 4 days... then you better pay up. It doesn't matter if I'm getting rich fixing roofs quickly or that you're suddenly out of cash - I want my damn $15K even if you have to borrow it from your brother.
Employees are not the corporation, just resources of it, and they participate in their own labor markets. AIG had poorly conceived contracts with its employees, but a contract is a contract.
If we had just let AIG go bankrupt, this wouldn't have been an issue. It's also important to remember that this is a low interest gov't loan and not a handout. If I lend you money, I expect you to honor ALL of your obligations; and not spend all of your time in court defending yourself against other lenders.
Hi Davey if you could perhaps get a literate person to read my post to you, you'd find that I never say or imply that government invented the notion of giving weird bonuses (though retention bonuses are used all the time at companies in trouble). I said the G screwed up by not doing due diligence that these bonuses were upcoming when they gave the aid and bailed out AIG.
As it turns out it's even worse. Chris Dodd (clearly a member of the government,no?) now admits to explicitly writing language into the stimulus bill that allowed these bonuses to go forward.
LOL.
You cannot ever over-estimate the bogosity of our government
I'm confused by this. The government was told that they were going to pay these bonuses. They responded by passing a law saying that they could pay the bonuses. The guy put a sika deer in the tiger pen, watched the tiger eat the deer, then, when other people noticed, freaked out and shot the tiger.
I think its worse. The guy put the deer and the tiger in the cage, and when the tiger started eating, he shouted "Everybody look! The tiger is eating the deer!!! Let's burn down the forest and kill all the tigers!"
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