Monday, March 16, 2009

AIG Bonuses

This all seems to be so absurd. Where would AIG be today without the bailout money? Would they go further into debt simply to pay bonuses? Would they even exist as a company? If they didn’t exist, would they still be “obligated” to pay bonuses?

From Obama Administration Must Stop Bonuses to AIG Ponzi Schemers by Miles Mogulescu:

It's time for some righteous populist anger from the Obama administration--not just in words, but in deeds--to stop the looting of the Federal Treasury by Wall Street executives using taxpayer money to pay bonuses to the very people who manipulated markets and were instrumental in bringing the international financial system crashing down on the heads of hundreds of millions of people in America and around the world. If the Obama administration doesn't stop AIG from paying hundreds of billions of dollars in bonuses, it will enable a popular uprising (led, unfortunately, by hypocritical Republicans posing as populist leaders) which will block the Obama administration from taking the actions necessary to save the financial system. It could destroy Obama's Presidency and lead to a decade-long depression.

Instead, while AIG prepares to use hundreds of millions of dollars in taxpayer money to pay bonuses to the very executives at AIG's Financial Products Unit who designed, managed and marketed the credit default swaps which were little more than a Ponzi scheme, the Obama administration sends out Tim Geithner, Austan Goolsbee, and Larry Summers to lamely express fake anger to the media while defending the payments on the grounds of the "sanctity of contracts". As Larry Summers timidly told George Stephanopoulos, "The easy thing would be to just with their heads, violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law, for the overall financial system."
Read the rest here.

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