OK folks! The AIG bonus scandal is quickly turning into another one of those media feeding frenzies. Let's back up, take a deep breath and look at it.
We (da taxpayers) recently loaned AIG $30 Billion. Or did we just give it to them in exchange for an equity position in the company? It would be nice if the media actually informed us of the details of the "bailout". Wouldn't it?
Don't hold your breath. For now, I'll call this a loan.
Had we not loaned AIG $30 Billion, they would have gone bankrupt and pulled down other banks in a domino effect. I understand that. The plan is necessary to stabilize the banking system.
Had AIG gone bankrupt, I doubt they could have paid these bonuses. Therein lies the problem. The beneficiaries of this lavish compensation are being directly paid by taxpayers for running a company whose financial performance does not warrant lavish compensation. That's putting it mildly.
The big friggin' outrage is that something like $150 million has been paid out to AIG execs as retention bonuses. OK kiddies! Let's do the math! $150(EE6) divided by $30(EE9) times 100% equals 0.5%. In other words, less than 1% of this money has been paid out in bonuses.
Back in the wild and wooley days of the Casino business in Los Vegas, this was called "skimming". The government stopped it. Strange that the government didn't stop this! I understand your anger.
That does not mean we had to let the entire world banking system melt down. This problem doesn't mean it was wrong to rescue the banking system. It just means that the government once again, let a hundred executives of a large corporation get rich at taxpayer expense for no good reason.
Unheard of! Eh?
Today, I've heard news reports of Congressmen shouting from the highest mountaintops that this is an outrage. What is an outrage is that Congress didn't do any due dilligence to prevent this.
And what of the O'Bama Administration. This is an Administration that told us just a few weeks ago that banking bailout money would have "strings attached"; executive compensation would be limited to real-world levels for those banks accepting federal assistance. Either the O'Bama Administration was NOT sincere, or they failed to follow through with their own promise. No wonder the President is madder than a hornet.
I just wish our elected leaders had the HUMILITY to express a sense of embarassment over this issue. I think the money paid out to these executives can probably be recovered. If not, the government can certainly make these executives sorry they ever kept it.
Yet the media feeding frenzy on this story is focusing on public anger and the anger of our elected leaders. I can certainly understand the public anger. As far as our elected leaders are concerned, they should be EMBARASSED.
Oh! And one more thing before I sign off. I sure hope that our elected leaders in Washington D.C. take better care of how that "stimulus" money is spent better than they took care of the AIG rescue money. The stimulus package is law, but the money hasn't been spent yet. There's still time to prevent further embarassment to our elected leaders.
Do you think they'll use this time wisely?
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