In the news, Republicans and Democrats are furious that AIG is paying $165 million in retention bonuses. On Fox News, “AIG to Hand Out Another $165M in Bonuses,” there is a through story that explains a lot of this issue.
It is time to make some readers angry. AIG must pay these bonuses. Why? If you read the letter from AIG chairman and CEO Edward Liddy to Treasury Secretary Timothy Geithner you will understand what these bonuses where for and why they were offered. The main quote from the letter is:
Without these bonuses, “We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses which are now being operated on behalf of the American taxpayers.”
These were CONTRACTS that were offered to employees of AIG were to meet certain fulfillments of these contracts. The employees met the requirement and earned their money. According to the most basic contract law, AIG must pay these merit bonuses.
Add this caveat to this issue. What happens to AIG, if they do not pay these bonuses? What will these employees do? What would you do? First, they will sue in court for AIG to enforce these contracts. They should win and probably will. Second, they will quit.
Now, who owns 80% of AIG? You do. Yes, the United States taxpayer own 80% of AIG. How will AIG operate without their best talent? They won’t. Their performance will plummet and they will not be able to pay back the loans they took from us. Bites doesn’t it? You bet it does.
To make matters worse, yes, it gets worse. Now, let’s look back to TARP. If you read it, you probably didn’t, don’t worry Congress didn’t either. There is nothing in the legislation that tells AIG or the government how uses this money. When the government gave AIG the money, there were NOT any strings attached. AIG could do what it wanted with the money to stay afloat.
Therefore, it is not AIG’s fault; it is Congress’s for not putting strings on the money. It is the fault of the government, not AIG. But, this is what government does. They mess up and then blame everyone else but the actual cause, themselves.
Also, AIG and banks are sending money overseas to foreign investments and banks. Guess what? We cannot do anything about that either, because there weren’t string attached.
So, as Obama, Geithner, and Barney Frank act like “indian givers” and try to tell AIG how to spend the money, AIG is going to pay the bonuses, because they have to according to the contacts. This should be a lesson to companies taking money from the government, and for the government lending money to companies. As we know, they won’t learn and this is only the beginning.
Showing posts with label Barney Frank. Show all posts
Showing posts with label Barney Frank. Show all posts
Monday, March 16, 2009
Tuesday, February 17, 2009
“Turning Japanese”
I can hear the one hit wonder from the Vapors now, “we are turning Japanese” oops Swedish? Yes, Obama is now leaning toward changing the American banking system into a Swedish system and steering away from the Japanese model of the 1990s to rebuild our banking system.
Good thing. Japan still hasn't recovered from their recession of the 1990s and we should steer clear of anything they did, like high, wasteful governmental spending, buyouts, and nationalization of industries. Wait…we are doing that!
On Wizbang, Obama eyes Swedish model for US banks, there is more detailed explanation of the Obama/Geithner plan (oh…hot picture of Swedish models too!) Basically, the government would buy up the banks until they recovered and created enough assets to buy themselves back. Sounds good, expect for the government being involved and them owning a prime American institution of Capitalism. Worst part is in the following link Bank nationalisation gains ground with Republicans from FT.com. Yes, the same Republican suspects, not Specter, Snowe, and Collins this time, but Graham and McCain from illegal amnesty fame. These politicians don’t get it do they? They do not understand that the People know best. Free markets know best. We can fix it, if you would just let us.
GET OUT OF OUR WAY!
Now, the U.S. government cannot do anything right or efficiently. Also, the citizens cannot trust the government that they would own the banks temporarily. They don’t do anything temporarily. So, they are only going to make it worse and do it permanently.
To make matters worse, if the government owns the banks, what power would they have over the citizens? Who would control what interest rate you would get for a loan? Who controls which businesses get credit and which doesn’t? What interest rate would a wealthy person receive compared to a middle-class person? Who would control who does or doesn’t get a loan? Would they continue giving loans to people who cannot afford them? Are they going to continue to give loans to illegal immigrants who cannot verify their identity? Who monitors and guards all that private information of the citizens?
Answer. Why the United States government, of course. The same government that created the Freddie Mac and Fannie Mae debacle that created the whole economic downturn in the first place.
Careful…your head is about to explode.
Who in the esteemed, all knowing government would have all this control. How about Barney Frank and Christopher Dodd. Yes, the same wizards of smart that are responsible for the bank collapse by saying that Freddie Mac and Fannie Mae were stable and suggested we need do more of the same policies, all of which are at the heart of the banking crisis.
So, they are only going to make it worse and do it permanently. At least, Dodd can still be getting his sweetheart loans. Hey, maybe Frank and Dodd could loan some of OUR money to some Democrats to pay some of their past taxes. I have heard that list is getting quite long.
Good thing. Japan still hasn't recovered from their recession of the 1990s and we should steer clear of anything they did, like high, wasteful governmental spending, buyouts, and nationalization of industries. Wait…we are doing that!
On Wizbang, Obama eyes Swedish model for US banks, there is more detailed explanation of the Obama/Geithner plan (oh…hot picture of Swedish models too!) Basically, the government would buy up the banks until they recovered and created enough assets to buy themselves back. Sounds good, expect for the government being involved and them owning a prime American institution of Capitalism. Worst part is in the following link Bank nationalisation gains ground with Republicans from FT.com. Yes, the same Republican suspects, not Specter, Snowe, and Collins this time, but Graham and McCain from illegal amnesty fame. These politicians don’t get it do they? They do not understand that the People know best. Free markets know best. We can fix it, if you would just let us.
GET OUT OF OUR WAY!
Now, the U.S. government cannot do anything right or efficiently. Also, the citizens cannot trust the government that they would own the banks temporarily. They don’t do anything temporarily. So, they are only going to make it worse and do it permanently.
To make matters worse, if the government owns the banks, what power would they have over the citizens? Who would control what interest rate you would get for a loan? Who controls which businesses get credit and which doesn’t? What interest rate would a wealthy person receive compared to a middle-class person? Who would control who does or doesn’t get a loan? Would they continue giving loans to people who cannot afford them? Are they going to continue to give loans to illegal immigrants who cannot verify their identity? Who monitors and guards all that private information of the citizens?
Answer. Why the United States government, of course. The same government that created the Freddie Mac and Fannie Mae debacle that created the whole economic downturn in the first place.
Careful…your head is about to explode.
Who in the esteemed, all knowing government would have all this control. How about Barney Frank and Christopher Dodd. Yes, the same wizards of smart that are responsible for the bank collapse by saying that Freddie Mac and Fannie Mae were stable and suggested we need do more of the same policies, all of which are at the heart of the banking crisis.
So, they are only going to make it worse and do it permanently. At least, Dodd can still be getting his sweetheart loans. Hey, maybe Frank and Dodd could loan some of OUR money to some Democrats to pay some of their past taxes. I have heard that list is getting quite long.
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