Talk about adding insult to injury! When I glanced at the title, " The Case for Paying Out Bonuses at A.I.G." by Andrew Ross Sorkin, in the NY Times Dealbook, I groaned. I held my nose and read it just to see what the convoluted argument would be that the Wall Street (WS) snake oil salesmen have conjured up to squeeze more $$$ out of us. Money that could save our brother's life, who just lost his job and healthcare. Money that could save our neighbor from living in a tent. Money that the slick, oily Wall Street crowd will spend on jewelry or a gold Jacuzzi.
I forced myself to read the propaganda, because I know that they are very good at using logical fallacies, loopholes, and sleight of tongue to redistribute our hard earned paychecks into their bank accounts. I want to keep up with their clever subterfuge and talking points.
Although, it was hard reading through all of the blarney (Happy St. Paddy's Day!), I was heartened to see that there were no compelling points made to bolster his premise. Thus, there is no case to pay out bonuses at A.I.G.
People are now starving and dying from health conditions that could have been addressed if these financial "brainiacs" hadn't bilked us for billions of our tax dollars, so I think it's imperative to nip their slick talk in the bud. We cannot afford their lavish lifestyles nor their schemes any longer. It's literally us vs. them now. Our survival vs. their 5th vacation home in sunny Florida.
AIG sent out $165 million in bonus checks to reward and retain AIG executives, under whose watch the company went under. We've had to fork over $170 billion so far to AIG, with no strings attached and no transparency, to compensate incompetence. It's a travesty that AIG employees should be awarded millions of dollars in bonus pay, while we lose our jobs, homes, and healthcare due to the economic meltdown they caused.
In his article, Sorkin asks, "Do we really have to foot the bill for those bonuses at the American International Group?"
He then cleverly tries to win us over by talking like he is one of us.
It sure does sting. A staggering $165 million — for employees of a company that nearly took down the financial system. And heck, we, the taxpayers, own nearly 80 percent of A.I.G.
It doesn’t seem fair.
But then, he gives us something that's hard to swallow, claiming that it's "for our own good":
So here is a sobering thought: Maybe we have to swallow hard and pay up, partly for our own good.
He adds this cute remark to quell dissent with humor.
I can hear the howls already, so let me explain.
Here we go down the slippery slope of slick salesmanship.
First, he presents the opposing argument:
Everyone from President Obama down seems outraged by this. The president suggested on Monday that we just tear up those bonus contracts. He told the Treasury secretary, Timothy F. Geithner, to use every legal means to recoup taxpayers’ money.
Sorkin concedes:
Hard to argue there.
Sorkin now inserts an Obama statement he thinks isn't hard to refute:
"This isn’t just a matter of dollars and cents," he said. "It’s about our fundamental values."
Sorkin triumphantly reiterates Larry Summers' argument (the WS #1 talking point) about contracts:
On that last issue, lawyers, Wall Street types and compensation consultants agree with the president. But from their point of view, the "fundamental value" in question here is the sanctity of contracts.
Here is what Larry Summers actually said:
We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.
Before we go any further, I would like to remind you that Larry Summers and Tim Geithner are Wall Street types, who paved the way for the deregulation that permitted companies like AIG to run AMOK when they were in the Department of the Treasury in the late 90s. In fact, Larry Summers, Alan Greenspan, and Robert Rubin, aka, The 3 Marketeers, were also guilty of muzzling the voice of reason, Brooksley Born, The Woman Greenspan, Rubin & Summers Silenced, who could have prevented this financial debacle from ever occurring in the first place.
Why are Summers and Geithner, who got us into this mess, calling the shots in the U.S. Treasury? Something is fundamentally wrong with our value system when Summers and Geithner are rewarded with jobs in the U.S. Treasury and AIG executives are sent millions of dollars in bonus checks after causing one of the worst financial disasters in U.S. history!
Back to the WS yack attack:
If you think this economy is a mess now, imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right.
Imagine, indeed. We don't have to imagine what actually did happen thanks to Geithner's and Summers' deregulation and the incompetence of the AIG execs with checks. We are living that $170 bn nightmare right now. The same WS types, warning us that we must continue to heed their propaganda about sacred contracts or gloom and doom will befall us and we must fork over more money to their WS pals, abrogated their contract with the American people by steering us wrong and robbing us blind. The financial meltdown they caused clearly indicates it's best to ignore their toxic advice.
Glenn Greenwald has this to say about The sanctity of AIG's contracts after citing an example of contracts that were broken by 3 big auto companies in Detroit with the United Auto Workers when the government bailed them out:
Concessions with the union are a condition of the $17.4 billion in government loans that the automakers have received so far.
Apparently, the supreme sanctity of employment contracts applies only to some types of employees but not others. Either way, the Obama administration’s claim that nothing could be done about the AIG bonuses because AIG has solid, sacred contractual commitments to pay them is, for so many reasons, absurd on its face.
Sorkin's addresses Greenwald's example:
The auto industry unions are facing a similar issue — but the big difference is that there is a negotiation; no one is unilaterally tearing up contracts.
His claim that the UAW's contract isn't a contract, but a "negotiation" is really scraping the bottom of the absurdity barrel. One only need to read this article, Ford To Save $500 Million A Year Under UAW Contract Changes, to see that he was being misleading. The title says "contract changes" not "negotiation changes."
What about the trust and commitment organizations have to their employees? Companies change their benefits packages at the drop of a hat. They break their agreements all the time.
But, the piece de resistance of Sorkin's twisted logic is this bombshell:
A.I.G. built this bomb, and it may be the only outfit that really knows how to defuse it.
What can I say? Is this ridiculous or what? The fools who make a mistake are the only ones who can correct the mistake. Pew! That argument stinks to high heaven. Someone open a window!
Why not hand over million dollar bonuses to the company who messed up the Ted Williams tunnel panel that killed a woman in Boston? Woman killed when part of ceiling falls in Big Dig tunnel. They didn't make the right glue, so they should be awarded several million to make another batch! Yeah, right! Great idea!
Well, I've got news for you, when people mess up, and their mistake hurts other people, they pay the victims millions of dollars in damages, Boston tunnel settlement to cost builders $458 mln; the victims don't award them bonuses.
I didn't think the argumentation would turn to blackmail, but Sorkin warns us that we better keep the bad guys on the payroll or they may get ugly and hurt us even more:
If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book.
So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company.
I think we should do what was done with the Big Dig fiasco: sue them into the ground, not award them bonuses.
To guard against their threat to retaliate against us later if we don't retain them handsomely in their AIG seats with millions of dollars in bonus pay, we need to pass some quick ethics and regulatory laws, so that if they "turn against the company," they'll soon be rooming with Bernie Madoff.
another possible explanation is that A.I.G. knew it needed to keep its people.
That is the explanation offered by Edward M. Liddy, who was installed as A.I.G.’s chief executive when the government effectively nationalized the company last fall. (He is being paid $1 a year.)
Yes, let's listen to the officials at AIG, who took us for this $170 bn ride into financial hell. And, of course, if Liddy is only being paid $1, then everything he says must be implicitly believed as the word of in God we Trust, which is written on his $1 bill. Uh huh. Yes. Good one.
Especially this Liddy gem:
"We cannot attract and retain the best and brightest talent to lead and staff" the company "if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury"
Don't read this stuff after eating. May cause nausea. Best and the brightest AIG execs - ewww! Sounds like Larry Summers "brain drain" propaganda (WS Talking Point #2) regurgitated. Sickening.
There’s some truth to what Mr. Liddy is saying. Would you want to work at A.I.G.?
Sorkin describes how terrible the jobs are for these A.I.G. execs, having to read about themselves in the daily paper, etc.
What planet does this guy live on? Oh, yes, the WS planet, flying high above us in an orbit fueled by taxpayer's money.
You can bet that someone would scoop up the talent from A.I.G. and, quite possibly, put it to work — against taxpayers’ interests.
Bwah! Cry me a river! Poor wittle rich WS executives! Boo hoo! They may pick up their wittle marbles and work "against taxpayers' interests." Sounds just wike blackmail. Hand over the bonuses or else we will hurt you even worse than we've already hurt you.
What are we, a bunch of masochists? Why are we tolerating this economic sadism by these WS dominitricksters?
"The word on the street is that A.I.G. employees are being heavily recruited"
Ooooh! Oh, my goodness gracious! They must be really hot stuff! Let's give them millions of dollars right now, before we lose them!
Sorkin advises Cuomo, who wants to investigate who these execs are and whether they deserve their bonuses to "honor their contracts" and
Perhaps they will "volunteer" to give some of their bonuses back
Clever ploy. Give us the money now, and maybe, just maybe, we'll give it back to you.
We the People own 80% of AIG, whether we like it or not. Shouldn't we be calling the shots, not the buffoons who got us into this mess? Don't they work for us now?
I think Keith Olbermann should make Andrew Ross Sorkin the worst person in the world again for this column, just as Keith did on November 26, 2008, when Andrew falsely claimed that auto workers earn $70/hour, when it's actually $28/hour.