The random political thoughts thread (Part Deux)

[scaeagles]

OK....AIG.

I don't even want to address the morality or lack thereof of bonuses or whatever. However, if I am to understand this correctly, these bonuses that are causing this outrage were written into the the bailout bill.

If that is indeed the case, why then the outrage at the AIG people for the bonuses? Shouldn't the outrage be at those who wrote, voted for, and signed the bill?

And in terms of outrage, this kind of reeks of kickbacks to me.....

There was plenty of outrage on Capitol Hill last week over the executive bonuses paid out by AIG after getting federal bailout money. But another money trail could make voters just as angry: the campaign dollars to members of Congress from banks and firms that have received billions via the Troubled Asset Relief Program.

[Alex]

Well, the "bonuses"* weren't written into the bill, just a provision barring bonuses was changed to say "except for those already contractually agreed to."

I doubt that many (if any) of the people behind that provision were aware that AIG had already taken what had been merit/performance bonuses and turned them into guaranteed payments (for reasons that may very well have made some sense at the time but still ended up being a really wrong decision). That is, I don't doubt that there was awareness of existing required "bonuses" I just doubt many people know how utterly stupid the bonuses were.

The UAW contracts for the auto bailouts are held up as an example of the government saying contracts are ignorable but in that case the bailout was made contingent on the car companies extracting concessions from the employees. If that had been the case up front with the AIG (or general finance bailouts) I wouldn't have a problem with that, though I suspect that the government wouldn't have been able to achieve its aims at the time (regardless of whether you agree with them or not) because the healthier institutions would have refused the money completely, marking the less healthy large institutions for death -- which is exactly what the government was trying to avoid by ensuring that all of the large institutions took money whether they really needed it or not. (Another difference is that in the auto industry failures employee compensation is seen as a large contributing factor to the financial problems, which -- as obscene as salaries and bonuses may be -- is not the case in the finance sector.)

I do think that giving money and then trying to change the rules after the fact is not a good precedent.

And there are already grumblings that this might bite them in the ass on the new proposal for dealing with the bad loans. They're trying to encourage hedge funds to invest in them, taking on big risk for possible huge rewards if the markets recover. But why would they take that risk if, should they pay out beyond their wildest dreams public outrage that they're getting so rich just because of public assistance means they might face a 90% tax (or something like it) on the returns?

That said, the 90% tax is super stupid on many fronts. In full disclosure, I have received a bonus this year from a company that would fall under the new tax. I would get to keep my bonus, but a receptionist here probably would not because her husband is a reasonably successful divorce attorney. One would assume our money would be equally dirty (though we both work exclusively in very profitable business lines) but apparently hers is dirtier since she married better than me (though makes much less than me).

* I put the quotes around "bonuses" because I think that word is a huge cause of the outrage. But these were not really bonuses in the sense that most people think of the word. They weren't salary, but they were guaranteed. So they're bonuses in the sense they were compensation beyond base salary but not in the sense of being completely discretionary on the part of the employer.

[Drince88]

Originally Posted by Alex

I do think that giving money and then trying to change the rules after the fact is not a good precedent.

Just had to give you a big 'you said it, brother' to that line.

[Ghoulish Delight]

Some employees have volunteered to return their bonuses.

story.

[Ghoulish Delight]

Originally Posted by Alex

But I will agree that unless they were of some deeply personal meaning, that a gift of DVDs (man I hope they were region free or of the appropriate region)

Oh dear.

[Alex]

Yeah, I heard that on last week's Wait Wait.

[Ghoulish Delight]

I podcast it, so I'm a week+ behind.

[Ghoulish Delight]

Keep meaning to post this (3894's post regarding the Special Olympics reminded me finally).

We watched Obama's Leno appearance a couple days later and saw the Special Olympics comment for ourselves.

What he did not say was that his terrible bowling score was comparable to the Special Olympics. What he did say was that Jay Leno's jokingly condescending, "No, no, that's really gooood," was like the Special Olympics.

Whether this is better, worse, or equally offensive is another question. But if you do plan on being offended, be sure it's for an accurate reason.

[Drince88]

The City of New Orleans has some pretty inept people in 'high' office. One of the 'best' is the director of sanitation, Veronica White. She just had her computer siezed by the feds, gave out all the city council emails to a lawyer (under FIOA) without going through the city lawyers (as is policy) but the mayor isn't going to discipline her because she ddn't break any laws. She has an ongoing feud with the Parish Council, too.

She just wrote a book "How To Maximize FEMA Funding After a Natural Disaster". $35 for an 80 page paperback. She definitely has a following given some of the reviews, just not a following that most people would like to have.

I just wish there was some way to work this into my Mardi Gras costume next year...

[SacTown Chronic]

Oh I don't know about inept. Is there a more corrupt and profitable political machine in this country outside of Chicago than New Orleans? Those guys down there wrote the book on how to bribe a politician.