Most interesting thread of the past couple of weeks IMO.
I have to admit, I haven't taken much of an interest in the bailout and the AIG debacle in particular.
To me, the whole situation (and the various points of view in this thread) shows just what a precarious balance the entire financial system is in. It seems to go something like this:
The Government can't afford to let AIG fail because it's so important to the US financial system, and therefore has to use taxpayer dollars to prop it up.
AIG, in trying to survive, must retain its qualified employees but cannot do so given their virtual bankruptcy, and so must rely on the Government for a bailout in order to continue operating.
AIG employees, or at least those in this individual's position, are watching the partial collapse of their industry and the potential loss of their jobs. They could leave AIG, but to go where? I doubt there's a lot of hiring going on in the financial sector right now. So, they agree to work essentially for free in the hopes that the company can get back on track and they can maintain their employment, but they only do so with AIG's assurance that they will be paid in the future. They take a calculated risk that AIG will not collapse.
The Government then bails out AIG, allowing AIG to make good on its promises with its employees - which is important, because if AIG can't do so it will lose its employees, no longer be able to operate, and will go out of business regardless of the bailout it receives from Government.
Taxpayers are then annoyed by the fact that AIG is using their money to pay its employees "bonuses," which isn't surprising given the size of the "bonuses" and the hardships your everyman taxpayer is experiencing.
The Government then responds to the complaints of the taxpayer, and attempts to force AIG employees to give up their bonuses.
As a result of the Government's actions, employees leave AIG, AIG's position becomes even more precarious, and AIG may collapse even with the bailout money - not because it's insolvent, but because it can no longer operate as a viable company.
So, if I've got this right, does this mean the blame lies partly on the media for mischaracterizing the AIG "bonuses" as being payments on top of AIG employees' regular salary, thus inflaming the taxpayers and resulting in ill-considered Government action? Does blame also lie partly on the Government for failing to specify the uses to which the bailout money could be put? And does blame lie on AIG for making promises to its employees which were excessive in the circumstances and, therefore, bad business?
Finally, does blame lie partly on the AIG employees who may be partially responsible for AIG's collapse and who, in any event, could have left AIG when they saw the headlights coming, but instead stayed around hoping that it would all work out in the end, and hoping they'd get the bonuses they were promised?
Oddly, it looks to me that the whole system is doing exactly what we might expect it to do in the circumstances. And it's hurting everyone in the process.
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