Edward M. Liddy is not to blame for AIG's pernicious affairs, but as CEO, he's gonna catch some hell when he sits down today before Congress to try to defend the multi-million dollar bonuses AIG paid out with taxpayer dollars.AIG, like so many of its counterparts, lives in a surreal world that most of us cannot even begin to comprehend; not in our wildest dreams. It isn't any wonder that the people running such companies have no clue as to life in the real world.
AIG is so big and so convoluted and so intertwined and enmeshed in our financial system, that it simply could not be allowed to go under. Joe's Repair Shop, on the other hand, really doesn't matter, and when the Republicans were in charge they made it almost impossible for Joe to get out from under his crushing debt, while at the same time they cut taxes for the folks running AIG and similar examples of capitalism run amok.
Thus, AIG got $170 billion of your dollars and mine to stay afloat. There were no controls put on that money and no oversight. So, the first thing these corporate criminals did was spend $90 billion of those funds to "pay out to foreign and domestic banks, including some that had multibillion-dollar U.S. government bailouts of their own."
The second thing they did was spend $200 million in bonuses to the nogoodniks who created the mess in the first place. That's not a very big piece of the $170 BILLION pie, but as someone once said, "It's the principle of the thing."
Furthermore, when one steps down from the cloud of high finance, one is faced with the fact the the huge majority of people in this country will never come close to seeing $1 million dollars. With AIG, we're talking about BONUSES. They already got their regular pay!
What Liddy is going to tell Congress today is that AIG had no choice, that the bonuses were contractual obligations.
Congress, I hope, will laugh in his face and say "Return the goddamn money or we're gonna run all your asses in jail for defrauding the United States of America."
Congress won't do that, of course. But members of the august body are pissed, so there will be repercussions.
And isn't it interesting that corporations routinely use financial distress as a means of breaking or dismantling union contracts, but when executives are involved, contracts are sacrosant?
When the ship is sinking because the ones in charge of keeping it afloat failed to do their job, one does not pay them extra money merely because contracts were signed back when everything seemed to be hunky-dory!
Some Congressional types want to place an extra income tax of say 35% on all bonuses over $50,000. That's funny. Millions of people in our country don't make close to $50K in one year!
I'd say stop screwing around. Tell AIG and its executives, "Return the money now or go to jail for fraud."
The other alternative of course, is to put Cheney back in the While House and have him run a covert "Executive Assassination" squad like he did under Chimpy.
1 comment:
I watched Mr. Liddy all day on C Span and suggest that he news coverage I WATCHED ON TV THAT NITE AND THE NEWSPAPER ACCOUNTS AND COLUMNIST WAS NOT THE SAME COMMTITTEE I WATHCED. He answered the same questions the same way at least eight times, before I lost count. Either many of our Congress people are stupid or they were not listening to this public servant, working his butt off for $1 a year, after being comfortably retired for a long time. He is an expert with no axe to grind except to do the job assigned him. He is well qualified in his field. The Congress people obviously have little knowledge of corporate contracts and how they work. Liddy explained that one small division of AIG caused the implosion. Most of the bad guys had been fired! Others were retained specifically because they had knowledge as to what to do to minimize the damage. Their contracts and bonuses were to do a specific job with no time limit. When they liquidated their portion, in accordance with the contracts, they were free to leave with their agreed upon bonuses and many did. Liddy could not have accomplished the reductions he did with people picked up off the street. It would have taken time to get settled and familiar with the problems and then to try to solve them. Contracts guaranteed knowledgeable people would be there to do that job. It was Liddy’s responsibility to have the best people, in his educated opinion available, even though giving bonuses were distasteful. He is charged with saving the profitable divisions of AIG so they can be separated and sold off, in order to pay the taxpayers back for money given and lent.
It was not Gaitner’s job once he recused himself after being considered for a job in the eventual administration to do anything unless asked to do so by Bush and his administration. It was their responsibility to have negotiated contracts and save the system. Obama had no role until after he became President, neither did his transition people until they were in office and granted authority. The proper questions should have been directed at the previous administration re contracts, oversight, etc. It was their role and their authority that matters The Democrats obviously did not have the votes to make changes without the three Republican Senators that broke ranks months after all this.
It is time for the timetable to be looked at, if blame is to be assigned. Obama’s people have been in office only since mid January and it is too soon for all their plans to be in affect or even voted on. In the meantime, get rid of the posturing and come up with concrete plans, not pick on parts that are not important. It is one thing to be in opposition. It is another to help solve the problems. The previous administration had eight years to prevent anticipate, create, ignore or miss the problems. Obama has had three months to find out the depth of the problems and try to do something about them. People like Liddy are needed. We do not need ignorant Congress people to interfere unless they have something to offer.
Post a Comment