President calls $165 million in bonuses an 'outrage to the taxpayers'
Mark Lennihan / AP
NEW YORK - The government will "pursue every legal avenue" to block millions of dollars in bonus payments for American International Group Inc. executives, President Barack Obama said Monday, calling the bonuses "an outrage to the taxpayers" who bailed out the giant insurer.
"In the last six months, AIG has received substantial sums from the U.S. Treasury. I've asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole," Obama said.
The president was speaking as he unveiled plans to help small businesses. In his remarks, he said AIG _ which has benefited from more than $170 billion in federal rescue funding and is 80 percent owned by taxpayers _ is a company in distress due to "recklessness and greed."
"Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?" the president said.
The president's stern remarks echoed the growing indignation in Washington and on Main Street over the bonuses.
New York Attorney General Andrew Cuomo sent a letter to AIG's chairman Edward Liddy requesting a full accounting for the bonuses, CNBC reported. According to CNBC, the letter requests a list of those who received the bonuses, what their roles are and why they deserve the bonus. Cuomo wants the list by 4 p.m. EDT, CNBC said, or he will subpoenae AIG.
Earlier, Rep. Barney Frank charged that AIG's decision to pay millions in executive bonuses amounts to "rewarding incompetence."
"These people may have a right to their bonuses. They don't have a right to their jobs forever," said Frank, echoing outrage expressed on both sides of the political aisle in the wake of revelations that AIG will pay roughly $165 million in bonuses.
The money was payable to executives by Sunday and was part of a larger total payout reportedly valued at $450 million. AIG has argued that it was contractually obligated to pay the bonuses.
Appearing on NBC's "Today" show, Frank noted that the Federal Reserve Board, using a Depression-era statute, was the institution that gave AIG its initial government bailout, before Congress passed legislation providing for additional assistance. He said he did not think sufficient safeguards were built into that initial bailout by the Fed.
Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, added on NBC's "Today" show that "it does appear to be that we're rewarding incompetence."
On ABC's "Good Morning America" Monday, Sen. Richard Shelby said Congress must do everything it can to make sure the government money going to AIG is handled appropriately. The Alabama Republican, who is the ranking member of his party on the Banking Committee, also said he was angry.
"We ought to explore everything that we can through the government to make sure that this money is not wasted," Shelby said. "These people brought this on themselves. Now you're rewarding failure. A lot of these people should be fired, not awarded bonuses. This is horrible. It's outrageous."
Frank said he was disgusted, asserting that "these bonuses are going to people who screwed this thing up enormously."
"Maybe it's time to fire some people," he said. "We can't keep them from getting bonuses but we can keep them from having their jobs. ... In high school, they wouldn't have gotten retention (bonuses), they would have gotten detention."
Frank said Congress intends to make very clear that it will not stand for "any more abuses of this nature."
Frank's statement came as AIG revealed it used more than $90 billion in federal aid to pay out foreign and domestic banks, some of which had received their own multibillion-dollar U.S. government bailouts.
Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks — France's Societe Generale at $11.9 billion, Germany's Deutsche Bank at $11.8 billion, and Britain's Barclays PLC at $8.5 billion. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion as of Dec. 31.
"The ability of AIG to meet its obligations is important to the stability of the U.S. financial system and to getting credit flowing to households and businesses," Federal Reserve spokeswoman Michelle Smith said.
The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions.
Other banks receiving between $1 billion and $3 billion from AIG's securities lending unit include Citigroup Inc., Switzerland's UBS AG and Morgan Stanley.
Municipalities in certain states, including California, Virginia and Hawaii, received a total of $12.1 billion under guaranteed investment agreements.
The company said it used billions more to fund its Maiden Lane business, which was set up following the federal bailout to purchase toxic assets, and to repay debt and provide capital for some of its operations.
"I've been asking for this information for months. This is a good first step, but I'm concerned by how long it took,' said Rep. Carolyn Maloney, who is chair of Congress' Joint Economic Committee.
In a letter to Treasury Secretary Timothy Geithner dated Saturday, Liddy said outside lawyers informed AIG that it had contractual obligations to make the payments and could face lawsuits if it did not do so.
Liddy said the company entered into the bonus agreements in early 2008 before AIG got into severe financial straits and was forced to obtain a government bailout.
AIG has agreed to the Obama administration's requests to restrain future payments.
- Re: Obama seeking ways to block AIG bonusesposted on 03/16/2009
"$165 million in bonuses" is not an outrage.
The government's interfering with the private enterprise is an outrage. That outrage is the source of all the subsequent feigned "outrages" acted by those in the circle of power.
The ultimate result of any government intervention in the economy is socialism.
Just let AIG and all those insolvent banks go belly up. It won't be the end of the world.
- posted on 03/16/2009
Without those banks, private savings still find their way into the production capital structure. The savings-investment channel does not depend on those banks.
The whole hysterical crying about "saving the banks" is a political gimmick to save those bankers' economic interest. A more proper way to say it is to "bail out the bankers."
Those ignorant idiots who cry for government intervention in the economy know nothing about the natural order of economics although some of them pretend to be experts who wrote nonsense articles on the economic crisis.
- posted on 03/16/2009
The whole economy production process depends on real private savings-investment. It does not depend on artificial credit expansion that is not a result of real private savings-investment. Artificial credit expansion causes artificial boom and then the bust. Private real savings-investment does not cause any of the boom-bust cycles.
That is where the boom-bust cycles and the corresponding economic crisis come.
That is part of the natural order of things in economics.
It is not the so-called "deregulation" bullshit that caused this economic crisis as some idiot "economic expert" actively wrote in bullshit articles in various Chinese language forums.
- Re: Obama seeking ways to block AIG bonusesposted on 03/16/2009
我还准备转这篇,给七月转了先。当然希望总统能作点事,就怕下面
叫不动,这美国大老爷,比中国的难侍候多了。
美国变变也无妨,不然太乱搞了。这不公平,迟了要闹革命的。 - Re: Obama seeking ways to block AIG bonusesposted on 03/16/2009
The whole populace is fed with all those nonsensical statement such as "2/3 of the whole US economy is consumption", and the most of the populace believe that.
That statement is false. A far less proportion of the whole US economy is consumption.
The whole populace is basically fed with bullshit by the mass media, and those fed don't want to know that they are fed with bullshit. - Re: Obama seeking ways to block AIG bonusesposted on 03/17/2009
今天美国大报小报的封面或头条都是AIG,看来是触犯众怒了。
- posted on 03/17/2009
布须 和奥巴毛 的政府里的政客们对经济胡作非为,众不怒。布须 和奥巴毛们胡作
非为之后的后果是,AIG成了公不公、私不私的怪物,而那怪物里的managers 做这
也不对、做那也不对,众对政府里政客的胡作非为不怒,反而对后者怒。那就是本
人严厉批判“众”里面的那些傻敝愚民的原因之一。那些傻敝愚民当怒不怒、不当
怒反怒。本人还能说什么呢? 只能跟着那些傻敝愚民们被布须 和奥巴毛操了。区
别是:那些傻敝愚民们是欢呼着被布须 和奥巴毛操;本人是喊着“操布须 和奥巴
毛的妈妈”的口号被布须 和奥巴毛操。
xw wrote:
今天美国大报小报的封面或头条都是AIG,看来是触犯众怒了。
- Re: Obama seeking ways to block AIG bonusesposted on 03/17/2009
“傻敝愚民”是一个什么概念?未必不是文盲的意思。其概念包含所有的人们,包括
那些博士硕士学士高中士初中士小学士幼儿园士从未上过幼儿园士们。整个人类的
历史中存在统治者和被统治者的时间里,统治者之所以能统治就是由于那些“傻敝
愚民”的存在,否则,那些统治者早就改行了。一些“傻敝愚民”还著述立说地为
统治者的一些具体统治手段赞美呢! - Re: Obama seeking ways to block AIG bonusesposted on 03/17/2009
"未必不是文盲" 改为“未必是文盲”。否则离“傻敝愚民”不远了。
- posted on 03/17/2009
有人说:那些“傻敝愚民”之所以傻、敝、愚,原因可以从两个层次找:1) 那些人
不懂、不想懂人们的活动中的外在于他们的价值判断的规律;2) 那些人不懂、不想
懂每个人(包括他自己)脑子里的价值判断的产生和变化机理的规律。
本人说:那是很好的一个总结。So?
那人说:要使得“傻敝愚民”变得不傻、不敝、不愚,就要从那两个层次改变他们。
本人说:说得很好。 So?
那人说:要改变他们就要用政府的力量来教育他们,例如在公立学校里面开设相应
的课程等,例如讲解各种宗教里面的具体内容,来用那些具体的宗教内容来从幼儿
园就开始教化那些民们,只有那样才能使得他们长大后不傻、不敝、不愚。
本人说:你让公立学校教那个宗教的具体内容?
那人说:凡是好的具体内容,无论是哪个宗教的都教。
本人说:谁定什么是好的什么是坏的?你!? 一个天主教徒可能说伊斯兰教里的一
些具体内容是坏的,而一个伊斯兰教徒说那是好的。怎么办?你做裁判?!谁听你
的呢?
那人说:由政府定。
本人说:谁是政府?让公立学校教宗教里的具体内容的最后的结果就是人们互相屠
杀。那就是政教要分离的原因。你连那都不明白,你还胡说八道什么呢?! - Re: Obama seeking ways to block AIG bonusesposted on 03/17/2009
当今的多数属灵人士完全不懂上贴所说的外在于一个人的价值判断的那些规律,他们
提出的主张有很多都是错的,因为不合外在于一个人的价值判断的那些规律。但,
由于那些属灵人士的无知和狂妄,他们已经不愿意承认那一点了。他们成了只知其
一不知其二的狂妄傲慢者。若他们的主张被实施了,他们最后不是成了宗教之间和
教派之间的武装冲突中的杀人者就是被杀者或两者。那些狂妄傲慢的不懂不想懂外
在于一个人的价值判断的那些规律的属灵人士们基本就是就是一个人的自由的敌人。
- Re: Obama seeking ways to block AIG bonusesposted on 03/17/2009
提防那些言必称属灵的那些人们,他们多数都是只知其一不知其二的狂妄傲慢的疯子。 - posted on 03/18/2009
AIG chairman says retention payments distasteful
AP Press Writer – 3 mins ago
AP – In a Thursday, Dec. 11, 2008 file photo, Edward Liddy, chairman and chief executive officer of American … WASHINGTON – The chief of failed insurance conglomerate AIG acknowledged Wednesday to skeptical congressional interrogators that the company's multibillion bonuses to employees were "distasteful" to many Americans including himself and that "I share that anger." Lawmakers from both parties expressed fury over the company's behavior.
"Mistakes were made at AIG on a scale few could have every imagined possible," Edward Liddy, chairman and chief executive officer of the American International Group Inc., said in prepared testimony.
But, he told a House Financial Services subcommittee, the $165 million in bonuses paid out over the weekend should be honored as a legal commitment of the United States government, which now owns 80 percent of the battered insurer.
"When you owe someone money, you pay that money back," he said. "We at AIG want to believe that we are all in this together," said Liddy, who was named six months ago to take over the company as part of the government rescue. Some $170 billion in tax money has now been pledged to AIG.
Liddy's stance on this issue drew sharp comments from both sides.
For the American public, AIG now stands for "arrogance, incompetence and greed," said Rep. Paul Hodes, D-N.H.
It is "time for us to assert our ownership rights," said Rep. Barney Frank, D-Mass., chairman of the full committee. Frank said Congress will be asking for the names of the bonus recipients, but if AIG declines to provide it, he will convene the committee to vote a subpoena for the names. "We do intend to use our power to get the names," he said.
Rep. Scott Garrett of New Jersey, the senior Republican on the subcommittee, complained that the administration still has no exit strategy for disentangling itself from the insurance giant.
"Part of me wants to say to some of the loudest critics, `What did you expect and why weren't you asking more questions before?' I would argue that the real outrage now is the $170 billion of taxpayer moneys that's been pumped into this company and to what effect," he said.
Rep. Gary Ackerman, D-N.Y., cited a "tidal wave of rage" throughout America right now.
AIG is under fire for $220 million in retention bonuses paid to employees in its troubled financial products division. The most recent payment of $165 million began to be paid last Friday and caused a furor.
Liddy found himself the reluctant defender of princely employee bonuses that members of Congress — and much of the American public — find indefensible.
The retention payments — ranging from $1,000 to nearly $6.5 million — were not his idea. Liddy himself is not getting a bonus and is only drawing $1 a year in salary. The deals were cut early last year, long before then-Treasury Secretary Henry Paulson asked Liddy to take over the company.
Liddy acknowledged, "We are meeting today at a high point of public anger."
"Because of certain legal obligations, AIG has recently made a set of compensation payments, some of which I find distasteful," Liddy said in his prepared testimony.
He told lawmakers that the company grew into an internal hedge fund that became overexposed to market risks. AIG is the largest recipient of federal government emergency assistance.
"No one knows better than I that AIG has been the recipient of generous amounts of governmental financial aid. We have been the beneficiary of the American people's forbearance and patience," Liddy said. But he also said that "we have to continue managing our business as a business — taking account of the cold realities of competition for customers, for revenues and for employees."
He told lawmakers, "I want to assure you that the people at AIG today are working as hard as we can to execute the restructuring plan that, we believe, offers America's taxpayers the best possible income."
But the payments went out. Congress is in a lather and wants the money back. And Liddy, who had been scheduled to testify about AIG before the bonus story took root, was a timely target.
The clamor over compensation overshadowed AIG's weekend disclosure that it used more than $90 billion in federal aid to pay out to foreign and domestic banks, including some that had multibillion-dollar U.S. government bailouts of their own. AIG is the single largest recipient of government assistance — a company whose financial transactions were so intricate and intertwined that it was considered simply too big to fail.
Liddy said the company's new management team found that the company's "overall structure is too complex, too unwieldy and too opaque for its component businesses to be well managed as one company."
He said the new managers have "addressed our liquidity crisis and stabilized the company's cash position" and is winding down the financial products side of the business.
Lawmakers already were troubled by the idea of an institution that could single-handedly topple the financial system. Now, Liddy's appearance comes just as lawmakers from both parties are casting his company as the symbol of excess and abuse of taxpayer dollars.
The White House and Treasury Secretary Timothy Geithner, both of whom have condemned the payments, have been besieged by questions about why they did not know about the bonus payments sooner.
The White House for the first time on Tuesday night said Geithner learned of the impending bonus payments a week ago Tuesday; he told the White House about them last Thursday, and senior aides informed President Barack Obama later that day.
Geithner said on Tuesday he was working with the Justice Department to find ways to recover some of the payments. He cited a provision in the recent economic stimulus law that gave him authority to review compensation to the most highly paid employees of companies that already have received federal assistance.
- posted on 03/18/2009
I just read this. It is so fresh as if it was just written today. It was written by Ludwig von Mises who has been long dead.
Ludwig von Mises 用词温和,实际上他就是在严厉批判那些 睁眼瞎子的傻敝愚民们。
他这里也用了“blinded”这个词。
"The publication of a standard book on economics raises again an important question, viz., for whom are essays of this consequence written: only for specialists, the students of economics, or for all of the people?
To answer this question we have to keep in mind that the citizens, in their capacity as voters, are called upon to determine ultimately all issues of economic policies. The fact that the masses are ignorant of physics and do not know anything substantial about electricity does not obstruct the endeavors of experts who utilize the teachings of science for the satisfaction of the wants of the consumers. From various points of view, one may deplore the intellectual insufficiency and indolence of the multitude. But their ignorance regarding the achievements of the natural sciences does not endanger our spiritual and material welfare.
It is quite different in the field of economics. The fact that the majority of our contemporaries, the masses of semi-barbarians led by self-styled intellectuals, entirely ignore everything that economics has brought forward, is the main political problem of our age. There is no use in deceiving ourselves. American public opinion rejects the market economy, the capitalistic free-enterprise system that provided the nation with the highest standard of living ever attained. Full government control of all activities of the individual is virtually the goal of both national parties. The individual is to be deprived of his moral, political, and economic responsibility and autonomy, and to be converted into a pawn in the schemes of a supreme authority aiming at a "national" purpose. His "affluence" is to be cut down for the benefit of what is called the "public sector," i.e., the machine operated by the party in power. Hosts of authors, writers, and professors are busy denouncing alleged shortcomings of capitalism and exalting the virtues of "planning." Full of a quasi-religious ardor, the immense majority is advocating measures that step by step lead to the methods of administration practiced in Moscow and in Peking.
If we want to avoid the destruction of Western civilization and the relapse into primitive wretchedness, we must change the mentality of our fellow citizens. We must make them realize what they owe to the much vilified "economic freedom," the system of free enterprise and capitalism. The intellectuals and those who call themselves educated must use their superior cognitive faculties and power of reasoning for the refutation of erroneous ideas about social, political and economic problems and for the dissemination of a correct grasp of the operation of the market economy. They must start by familiarizing themselves with all the issues involved in order to teach those who are blinded by ignorance and emotions. They must learn in order to acquire the ability to enlighten the misguided many.
It is a fateful error on the part of our most valuable contemporaries to believe that economics can be left to specialists in the same way in which various fields of technology can be safely left to those who have chosen to make any one of them their vocation. The issues of society's economic organization are every citizen's business. To master them to the best of one's ability is the duty of everyone." - Re: Obama seeking ways to block AIG bonusesposted on 03/18/2009
"the majority of our contemporaries, the masses of semi-barbarians led by self-styled intellectuals, entirely ignore everything that economics has brought forward"
原来他用词并不怎么温和。“the masses of semi-barbarians”比本人用的“睁眼
瞎子的傻敝愚民们”几个字还更严厉。;-) - Re: Obama seeking ways to block AIG bonusesposted on 03/18/2009
According to Washpost:
"BREAKING NEWS
Fed to Expand Rescue Efforts by $1.2 Trillion "
How nice!
Please paste HTML code and press Enter.
(c) 2010 Maya Chilam Foundation