Why is the Treasury Dept., Congress and the administration suddenly acting so "shocked and outraged" about massive, contractual bonuses to AIG execs. One would have hoped that these contracts would have been known about for quite some time, especially with big-time government intervention within that failed organization. Known about at least prior to the latest 30 billion dollar bailout trucked AIG's way.
Sounds like more poor management, by the the new government overseers. So we now hear rumblings about taxing nearly 100% of said egregious bonuses. How to execute this legally upon employees of just one firm sounds problematic. Excise taxes (and/or mandatory limits) upon bonuses (etc.) at all firms with a certain percentage of government/taxpayer ownership, may be more workable. (See additional update, below.)
Aren't most of the recipients at AIG that everyone's railing against now working for the government, unwinding complicated positions, toxic assets, etc.? And, although they may have helped create a huge, worldwide mess, did these individuals actually do anything illegal? They certainly made terrible investment decisions and took miscalculated (or not calculated at all) risks. It has been pointed out elsewhere: Many other people did similar things, including consumers and homeowners during the now-gone boom times.
What the heck. At this point in the disaster, go ahead and excise tax the new millionaires to oblivion. People are blood-thirsty.
Hope there will be others around who can still help untangle the mess that persists. I still believe that unregulated AIG was so enmeshed in GLOBAL finance and investing instruments/transactions that worse problems would have unfolded at world financial institutions, if the bailout had not gone forth.
Update: Apparently good 'ol Connecticut law is getting serious blame for this bonus fiasco. Supposedly, because AIG headquartered its ("bad boy") financial products group in Wilton,CT, the rats are attempting to use a provision of the Connecticut Wage Act to claim they must pay the contracted bonuses. Or, if not paid, apparently employees can sue. Double.
Perhaps Senator Grassley had something going when he fired off this one about said AIG-sters: "But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide.
"And in the case of the Japanese, they usually commit suicide before they make any apology."
Sen. Grassley backed off this a bit, subsequently.
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