Tuesday, March 17, 2009

Cartoon Of The Day -- Sharin' of the Green


We haven't had a cartoon of the day in a while. Gary Varvel, the great cartoonist over at the Indianapolis Star, has a good one, though. AIG, which has received some $170 billion in taxpayer funds (with more to come), doled out $165 million in bonuses to AIG executives this past weekend. AIG, it says, had very little choice. Contractual obligations tied its hands (see story here).

Gary Varvel's cartoon from yesterday (hat tip Lisa):


P.S., Happy St. Patrick's Day.

19 comments:

  1. Mario Cuomo's letter to Barney Frank about the AIG bonuses:

    http://online.wsj.com/public/resources/documents/CuomoHouseCommitteeLetter3172009.pdf

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  2. We chose to bail them out rather than following the letter of the law and reorganizing them through bankruptsy which would have voided the bonuses. OR we could have made it a condition of the bailout that bonuses are forfeit....we did none of this....At this point to act outraged about AIG not breaking the law and paying on their contracts is an insult to the intelegence of the American people.

    Politics at its worst

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  3. AIG promised them money. AIG ran out of money, and therefore had no money with which to pay them. Too bad, so sad. Take them to court. I, as a taxpayer, did NOT contractually agree to pay these greedy clowns a bonus, therefore not a penny of my money is legally obligated to go to them.

    Do what you want with your own money. But once you go broke and ask someone else for money so you can remain solvent, they have a say in where that money goes. And it should go to SOLVENCY. Not luxuries, i.e. gifts to executives because you were stupid enough to sign contracts with unconscionable clauses like "you get an entire year's salary as a bonus regardless of performance."

    I didn't sign those contracts. So I don't have to honor them. AIG signed those contracts and went down (WONDER WHY?) before they could honor them. Let the courts deal with the parties to those contracts. I'm not one of them, so leave my money out of it.

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  4. Did you see where they're talking about taxing these bonuses at 91%? Wow.

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  5. Summers: We'll Be Creative In Recovering AIG Bonuses

    http://biz.yahoo.com/cnbc/090317/29737774.html

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  6. CM, re: the tax thing... we, your deceptively clever readers, suggested that some time ago, didn't we?

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  7. My deceptively clever readers likely did suggest it, U. With more than 12,000 comments (or something like that) on the blog, I can't remember who said what. LOL.

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  8. Seems congress didn't read the cardmember agreement when they bought AIG.

    Pity, we've been chanting that mantra for some time now.

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  9. Weren't we worried about counterparty risk when we bailed AIG out? I thought we were worried about the domino effect if we allowed them to fail. Not sure why everyone is so upset about the other banks getting paid by AIG (by way of us).

    The Real AIG Outrage

    http://online.wsj.com/article/SB123725551430050865.html

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  10. Subterfuge. I wanted to revisit a "word of the day" from a few weeks back.

    Seemed appropriate.

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  11. You're right, CM. It was obvious considering the products that were responsible and likely to cause catastrophe that money would be going to other institutions, even foreign ones. But those who fully understood this were in no rush to explicitly state it, and the media didn't point this out either, likely because they didn't understand it anymore than anyone else.

    I read the stories coming out about this new outrage, and I was just like, "Well, duh!"

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  12. I find that I am a lot more irritated by the bonuses than the $100 billion or so that flowed to other banks. But that's me.

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  13. I am, too. Absolutely! The reason is that it shows very clearly that the folks running AIG are still clueless. They don't get the gravity of their own situation. They're still being greedy and playing games. Sure, the amount of money is not large when the overall bailout amounts are considered. But it is so damned insulting.

    I love Cuomo's letter, too. In it he points out that AIG negotiated salaries of $1 for 2009 in exchange for bonus payments, so there was room to negotiate those bonuses. And also, the part about how retention bonuses were paid to people who left the company, that was delicious too.

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  14. I tend to be a contracts guy. But it seems that these were flexible. When it looks that way, it's more difficult for me to fall back on the "contract is a contract" mantra.

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  15. We assumed they'd do the right thing, plain and simple. We didn't even entertain the possibility that they'd take the money, thumb their noses at us, then basically dole it out amongst themselves and run off laughing. Who would do something that blatant, right?

    Much like when my "friend" asked for money to stave off financial ruin, I assumed she'd do the right thing. I didn't even entertain the possibility that she'd instead spend it on manicures, pedicures, trips to the salon, vacations, concerts and theatre tickets.

    This is what happens when you trust people's motives, and give them money without knowing for sure that they'll use it for the purpose they claimed it was for. Some people have no conscience about crying poverty and then using your generosity not to survive, but to score themselves some goodies with YOUR money.

    The difference is that this chick scammed a handful of people. AIG scammed all of us. Why should they be allowed to keep their ill-gotten gains? Yes, the money was given to them stupidly, but that doesn't let them off the hook. All too often in this society we reward liars and thieves by blaming the victims, and practically praising the ingenuity of those who were able to get away with it. We take a "what did you expect?" attitude, and resign ourselves to the fact if you put down your wallet, the thief earned the right to take it. It was your fault for not being vigilant. Not the thief's for stealing.

    Enough. Being trusting or even stupid doesn't give thieves the right to steal and keep the largesse. And AIG are thieves.

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  16. I don't know the details, and I'm certainly not a lawyer. But it seemed odd to me that those outside attorney's came back rather quickly and said there was no way to get out of those contracts. Hell, if contracts were so simple there'd be no need for an entire discipline within the study of law devoted to contracts.

    I suspect, and I'm probably misguided, that those salary negotiations created that contractual obligation for the bonuses. So you'd have a situation where the system was gamed in order to maximize personal enrichment, and I would call that bad faith.

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  17. Contractual obligations may have tied their hands but this is yet another perfect example of our leaders in DC not having a clue. I read today that there was actually language inserted to protect these types of bonuses. If not for the public outrage nothing would have come of it.

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  18. Did you hear that some of these "retention" bonuses are going to go to employees who've already left the firm? The more you learn, the crappier this thing gets.

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