Dear A.I.G., I Quit!

[Clever_Iggy]

Originally Posted by Azure

Which is why you let them go bankrupt, and restructure everything in the end.

I think the "bottom" of the recession would have come a lot faster if AIG, auto-manufacturers, bail-out recepients in general, would have been allowed to go bankrupt. That would have been a good thing.

Now, with the massive (and incomprehensible) amount of money spent to try and prop up the economy, the bottom will be deeper, getting there will take longer and the trip will be more painful. Corrupt, inefficient, mismanaged and irrelevant companies in a huge cross section of industry and commerce are allowed to survive on tax dollars. As any tax payer, but especially one in the US where "tax" is the dirtest word of all and hard-working and efficient business is supposed to thrive over weaker, inefficient business... WTF?!

Government spending to boost an economy, IMO, works. However, unchecked and reactionary spending that we've seen at the tail end of the Bush admin and so far in the Obama admin is just making things worse.

When the porn industry has their hand out for bailout money, that's a pretty good sign that too many industries are getting help.

[HPLovecraft]

Should have let these fools die in the first place. If you don't want bad business practices, you don't do your best to save those businesses.

[Daradon]

Originally Posted by Clever_Iggy

I think the "bottom" of the recession would have come a lot faster if AIG, auto-manufacturers, bail-out recepients in general, would have been allowed to go bankrupt. That would have been a good thing.

I don't know about that. I have wondered about it, but thinking it through, I don't think so. And even if the bottom did hit faster, the crash would have been harder.

I think they just should have put more conditions on the money and spent it wiser (which I have been saying from the beginning in political threads)

[Clever_Iggy]

Originally Posted by Daradon

I don't know about that. I have wondered about it, but thinking it through, I don't think so. And even if the bottom did hit faster, the crash would have been harder.

I think they just should have put more conditions on the money and spent it wiser (which I have been saying from the beginning in political threads)

I think there are legitimate (and obviously polarizing) sides to both arguments.

My problems with more conditions is that they (a) go against the free market form of commerce the US embraces, (b) may not be constitutional (your contracts argument runs up against the government requirement to pass strict scrutiny when interfering with private contracts), and (c) would have to be so comprehensive that they would have to control how businesses operate for an extended period (to prevent this type of over-arching crash from occurring again).

My problem is the money was so massive and so many industries are reaching out that accountability and controlling it would have been impossible.

[Daradon]

Originally Posted by Clever_Iggy

I think there are legitimate (and obviously polarizing) sides to both arguments.

My problems with more conditions is that they (a) go against the free market form of commerce the US embraces, (b) may not be constitutional (your contracts argument runs up against the government requirement to pass strict scrutiny when interfering with private contracts), and (c) would have to be so comprehensive that they would have to control how businesses operate for an extended period (to prevent this type of over-arching crash from occurring again).

True on all counts, but extraordinary times call for extraordinary measures. The effort and change needed would probably be worth it, even if only temporary. Might be better than the alternative.

Originally Posted by Clever_Iggy

My problem is the money was so massive and so many industries are reaching out that accountability and controlling it would have been impossible.

Also true, could be a logistic impossibility or just too expensive and time consuming to try.

Yeah, I can fairly say, I really don't know what the best alternative is. Kinda one of those times you wish life came with a pause button, a restart button, or a save folder, lol.

[Clever_Iggy]

Originally Posted by Daradon

True on all counts, but extraordinary times call for extraordinary measures. The effort and change needed would probably be worth it, even if only temporary. Might be better than the alternative.

I agree. And I think the bailouts are extremely extraordinary measures taken in extraordinary times. The problem is, if the government interferes in private contracts without sufficient justification and suit is brought, the courts, including the Supreme Court of the US, has a pretty good track record of not allowing this type of interference. That would result in lengthy litigation proceedings and likely would end up costing the government more than the initial bailout money to start with.

Originally Posted by Daradon

Yeah, I can fairly say, I really don't know what the best alternative is. Kinda one of those times you wish life came with a pause button, a restart button, or a save folder, lol.

Which is why I think those on the right end of the spectrum need to give Obama leeway. These are incredibly tough decisions. The right is already pronouncing Obama and the Dems failure when, in reality, the Republicans themselves have a pretty good track record of spending and spending on big business. If McCain would have been elected and/or Congress was Red rather than Blue, I don't think Republicans can be too comfortable saying that they wouldn't have made the same mistakes.

[simonsays]

Daradon, they did act in bad faith with taxpayers money. And we should all be pissed about the way that bonuses are handed out to companies that are on Government IV. But that does not prevent the people who stuck the needle into the corporations arm from reading the fine print.

If the gov't had inspected the company properly before handing over the cash then this wouldn't be an issue. They would have seen the contractual bonuses and either accept with them or dealt with them. The backhanded taxation of these bonuses is garbage. When they took over AIG could they not have asked to restructure contracts/bonuses? Couldn't they play hardball a little?

IMO Azure is right (it feels dirty to admit it). And while it's a lot of fun to blow smoke into the wind, the federal gov't still seems to be missing the point. Why aren't they re-legeslating risk ratios instead of making populist accusations?

I just can't see anyone in the right on this one.

[VladtheImpaler]

Originally Posted by Daradon

Obviously you've never been screwed on a contract.

If the person owing you can't pay, it don't matter. If AIG had not received the bailout, they wouldn't be able to pay. The fact that the were bailed out changes everything on the books at that point because if they weren't, there wouldn't even be books, jobs, bonuses to discuss.

You should really stop arguing contract law with lawyers. Because you are very wrong and will not become any "righter" by repeating yourself.

[Azure]

Originally Posted by Daradon

The fact that they did not, coupled with their continued spending on other perks as stories broke early on, show there are (or at least were) many fat cats up at the top that just didn't get it and acted as it if were entitled to them.

Uhhh, even if AIG would have wanted to restructure the contracts, the government didn't ask them too.

[Azure]

Also, if the government screwed the pooch here, with something as simple as this, how likely do you think it is that they're going to mismanage more of the 'bailout' money?

Bobblehead is right. There is nothing wrong with a government bailout, provided the money is looked after properly. We're seeing that it isn't....which is the EXACT reason I didn't, and still don't support a US government bailout for certain companies.

If the government can't even properly handle $150million dollars worth of bonus money, how are they going to handle trillions spread all over the US?

[VladtheImpaler]

Originally Posted by Azure

Also, if the government screwed the pooch here, with something as simple as this, how likely do you think it is that they're going to mismanage more of the 'bailout' money?

Bobblehead is right. There is nothing wrong with a government bailout, provided the money is looked after properly. We're seeing that it isn't....which is the EXACT reason I didn't, and still don't support a US government bailout for certain companies.

If the government can't even properly handle $150million dollars worth of bonus money, how are they going to handle trillions spread all over the US?

To modify the old saying: those who can't teach.... or run for office.

[Byrns]

The beauty of this is Obama and friends knew about these bonuses a long time before they were announced. All this grandstanding Congress is doing, is ridiculous.

[Azure]

Originally Posted by Byrns

The beauty of this is Obama and friends knew about these bonuses a long time before they were announced. All this grandstanding Congress is doing, is ridiculous.

Yeah, no kidding.

Senator Dodd even made a provision in the original agreement that the bonus money wouldn't be touched.

About his connection to AIG.

http://www.realclearpolitics.com/art...irector_o.html

[edn88]

I cannot believe that people are outraged that over execs making a million bucks, but pro athletes are okay. Guess its not okay to make money by using your brain, but making money by being able to make a slap shot is.

A contract is a contract is a contract. How AIG failed is terribly, stupid and/or incompetent, but if you didn't want the company to totally fail, you needed to have some one running the show.

I think that Obama screwed up, and is feigning outrage to cover his ass.

But none of that probably matters to many, they are outraged, and want to see anyone who looks like they are profiting pay - guilty or otherwise.

[Daradon]

Originally Posted by VladtheImpaler

You should really stop arguing contract law with lawyers. Because you are very wrong and will not become any "righter" by repeating yourself.

Well if they can't pay, they can't pay. They might serve jail time for it, I don't know exactly how that works, but you're probably still not getting money from them. I've been screwed by a company before, and I know others that have. I don't know if I ignored some legal options I had, but generally if there's no money left in the coffers, you end up defaulting on contracts or financial obligations you have. What happens then? I dunno. Depends on many other circumstances I'm sure.

As far as it changing everything on the books by taking the bailout I meant more in a moral sense and a fiscally/corporately responsible sense. Not in a legal sense. But I would hope that any company receiving federal bailout money would look long and hard at what were necessities and try to cut back as much as they could or the law would allow. Especially if you a company front and center in this mess and have been part of the problem. As I mentioned before I'm sure that there were some contracts that could have been fought legally and should have been fought legally given the extreme failure of some actions. I'm not advocating not answering their responsibilities, I'm just advocating really looking at what those responsibilities really are.

And as far as arguing with a lawyer goes, no one here mentioned to me they were one, so I can't be blamed for arguing my points as such, as I understand them. If I knew they were a lawyer, I'd obviously give more credence to what they were saying, although I think I've explained my position since this reply. I'm not arguing against not paying anything that is upheld by law. I'm not saying AIG wasn't bound by law to pay some if not most of those bonuses. But I have to argue the whole, 'a contract is a contract' because there are clearly some examples where executives did not honor their side of the contract. People made mistakes. BIG mistakes. I also have to argue it because every once in a while, a contract isn't good enough to save your ass, and you get screwed. It happens to others who are more unable to handle it, why not here? There are extraordinary times. No one is immune.

[Daradon]

Originally Posted by edn88

I cannot believe that people are outraged that over execs making a million bucks, but pro athletes are okay. Guess its not okay to make money by using your brain, but making money by being able to make a slap shot is.

A contract is a contract is a contract. How AIG failed is terribly, stupid and/or incompetent, but if you didn't want the company to totally fail, you needed to have some one running the show.

I think that Obama screwed up, and is feigning outrage to cover his ass.

But none of that probably matters to many, they are outraged, and want to see anyone who looks like they are profiting pay - guilty or otherwise.

Pro athletes (or their companies) are not part of the current problem.

AIG and undoubtly some of their employees are. That puts them under the microscope.

[Daradon]

Originally Posted by Azure

Uhhh, even if AIG would have wanted to restructure the contracts, the government didn't ask them too.

Do you do only things your told to do? Or do you sometimes try to do the right thing? Especially if someone else is helping you?

If I'm getting taxpayer money to fix my company, a a problem my company helped created, not just for us mind you, but people ALL OVER THE GLOBE, you can bet I'm trying to skimp everywhere STARTING at the places and people responsible for the mess.

[Daradon]

Originally Posted by Azure

Yeah, no kidding.

Senator Dodd even made a provision in the original agreement that the bonus money wouldn't be touched.

About his connection to AIG.

http://www.realclearpolitics.com/art...irector_o.html

That I can agree with and a a huge problem there. Guy should be relieved of his seat. I mentioned I knew one guy really screwed up in one of my posts but I couldn't remember his name.

I have no love for this guy and think he should be turfed. However it does little to excuse AIG's behaviour. It just adds a culprit.

[Daradon]

Originally Posted by simonsays

Daradon, they did act in bad faith with taxpayers money. And we should all be pissed about the way that bonuses are handed out to companies that are on Government IV. But that does not prevent the people who stuck the needle into the corporations arm from reading the fine print.

If the gov't had inspected the company properly before handing over the cash then this wouldn't be an issue. They would have seen the contractual bonuses and either accept with them or dealt with them. The backhanded taxation of these bonuses is garbage. When they took over AIG could they not have asked to restructure contracts/bonuses? Couldn't they play hardball a little?

IMO Azure is right (it feels dirty to admit it). And while it's a lot of fun to blow smoke into the wind, the federal gov't still seems to be missing the point. Why aren't they re-legeslating risk ratios instead of making populist accusations?

I just can't see anyone in the right on this one.

I don't disagree with any of this and think I have mentioned it somewhere among my many posts in this thread. I just feel AIG forced this backwards taxation to some extent (as unfair as it is) by acting in the terrible faith they did.

Both parties (AIG and the government) had the ability to make this better or at least lessen the damage considerably. Both screwed up more than once, and it's been going back and forth since then.

As you said, no one is in the right, which I wholly agree with. I just don't see how the government is MORE to blame then one of the biggest players in the mess.

As I said about halfway through the thread. It makes me want to say no companies should have been bailed out. At least it would have been simpler.

[Azure]

Originally Posted by Daradon

Do you do only things your told to do? Or do you sometimes try to do the right thing? Especially if someone else is helping you?

If I'm getting taxpayer money to fix my company, a a problem my company helped created, not just for us mind you, but people ALL OVER THE GLOBE, you can bet I'm trying to skimp everywhere STARTING at the places and people responsible for the mess.

They weren't getting taxpayer money when they signed the contracts.

So, how exactly should they get rid of the contracts, ESPECIALLY if the government didn't even ask them too?

If a contract is supposed to be void or invalid, both parties have to make an agreement. In this case, neither AIG, nor the employee EVER did that.

I'm not sure about the specifics, but as far as I know, the 'retention bonus' basically covered what the employee would have received in terms of salary pay. But, because AIG had no money to PAY salaries prior to the 'bailout' they recieved, they made a deal to pay the salaries at a set date, after they got some help.

Which is a smart move, considering they would either get bailed out, or they go bankrupt, where IIRC, each person with a 'contract' that couldn't be filled can make a claim and hope they get their money after the banruptcy is settled.

The Obama adminstration knew about this, Dodd knew about it, everyone involved KNEW that these bonuses were going to be paid out in March of '09, and they never made ANY restrictions, or even TALKED to AIG about possibly restructuring those contracts. Given that most AIG employees that recieved the bonus money have since returned it of their own free will, we can assume that they would have gladly negotiated a better contract if given the chance. But they couldn't, because neither side of the contract ever brought it up.

I think some people are looking at AIG as a company that is the incarnate of Satan himself, with a bunch of evil henchmen sitting at the helm trying to figure out a way to screw over the taxpayer as much as possible. And Obama is trying to manipulate the public as much as possible to direct their outrage at those 'evil henchmen'.....instead of putting the blame where it belongs. With those people that worked on the original bailout deal.

But no, that would be admitting a 'mistake'.....and he can't do that. So much for a open, honest and transparent government. When it really counts, he can't be honest like he said he would be.

Too bad the general public is too stupid and ignorant to really realize what is going on.

It doesn't take 4 years of law school to understand how contract law works. Most of us have at one point or another signed a contract for one thing or another. House mortage, bank loan, car payments, etc, etc. Imagine if you 'breached' that contract. The bank, car dealer, etc....has the RIGHT to go after you in a court of law and get back what is rightfully theirs.

Imagine what would happen if you couldn't make the payments on your house. With time, the bank has the right to take it away from you. Your utility bill? Enmax can turn off your power. On, and on.

There is a standard that NEEDS to be upheld. Those laws were specifically put into place to protect both sides of the equation. Just because the Obama administration didn't do their homework, that doesn't mean AIG is suddenly in the wrong.

Put the blame where it belongs. At the feet of the government. And with those AIG people that were involved in the original bailout deal.