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March 16, 2009

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» AIG bonuses: OBAMA KNEW! from Sister Toldjah
I mean, just a couple of weeks ago, Obama spox Robert Gibbs was confident the administration knew where AIGs money was being spent: From White House press secretary Robert Gibbs briefing two weeks ago, when $30 billion in additional funds... [Read More]

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bad

Jan 15, 2009:

(CNN) -- President-elect Barack Obama on Tuesday tried to persuade Senate Democrats to get behind his plan for the second half of the $700 billion bailout, warning he would veto a threatened disapproval resolution, according to senators who met with him.

Interesting....

LUN

Ranger

And just to put the AIG bonuses in perspective, the Dems in congress and the president just authorized over $1.5 billion for Future Gen, a clean coal test plant that was cancelled by the DoE because the technology is already obsolete. So, the Federal Government is going to spend 10 times as much tax payer money on one pork project boondogle as AIG is spending on these bonuses.

bad

That was a Blago earmark, Ranger. Talk about perspective.

clarice

Be careful with that one, I have reason to believe that the Futuregen project really was a good one which the prior administration cancelled in error.

clarice

"Greenwire, 11 March 2009 - A $500 million math error led the Bush administration to cancel plans for FutureGen, a clean coal and carbon capture and sequestration project, the Government Accountability Office said today.

The Energy Department announced early last year that it was pulling out of the original Mattoon, Ill., project because the program's costs were going to double to $1.8 billion and could easily go higher.

Former Energy Secretary Samuel Bodman said escalating costs did not justify project benefits. It would be better, he said, to invest in carbon capture and sequestration (CCS) components at multiple commercial power plants. DOE also said there were problems with the cost-sharing partnership with the FutureGen Industrial Alliance, an international consortium of large coal companies that was to pick up 26 percent of the project's tab.

But GAO said the Energy Department failed to incorporate inflation when it compared the original 2004 price for the project, $950 million, to the final $1.8 billion lifecycle estimate made by the industry alliance. The $1.8 billion estimate would have been $1.3 billion in 2005 dollars, a 39 percent increase, similar to cost increases at other projects of similar magnitude, according to GAO.
"

http://www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MzM2NjM>Math is so hard

BumnperStickerist

When reading a blog I ask myself this question: How many fields of human endeavor are there which the blogger believes he or she cannot master in the course of five minutes of Googling?

The higher the nunmber, the better the blog.

Hamsher, Greenwald, Yglesias, et most on the left have a cummulative total of 1.5

kim

Carbon capture is horrendously expensive and completely unnecessary. We are cooling, folks, because carbon dioxide has minimal effect on climate.
===============================

kim

It's like believing in a perpetual motion machine, clarice; the energy required to chemically bond carbon will always be more than we can get by breaking the bonds.
=====================================

clarice

You may be right, kim, but apparently DOE didn;t think so--the only reason the project seems to have been cancelled was a math error.

Charlie (Colorado)

Jane Hamsher won't let facts get between her and a tirade.

Boy, there's a comment that could be used daily.

kim

Last year at one point Andy Revkin was talking up some Department of Energy project to sequester carbon. It turns out that the energy to do so would come from a nuclear plant. The obvious question? Why not just use the energy from the nuclear plant? There was no good answer. It was ridiculous from the get go and only funded because of the insanity of the climate debate.

Please read Christopher Booker yesterday on RCP about how no one is listening to the real climate experts. We must get over this madness or make serious policy error after dangerous policy error after expensive policy error. Even in good times we couldn't afford this madness. Why now?
=====================================

Rick Ballard

WFC to Geithner Take Your Stress Test and Shove It

It's so comforting to see a the CEO of a major bank tell the Secretary of the Treasury that his "plan" is "asinine". It seems to have trimmed 180 points or so off the O-bubble Rally today. I don't know what in the world Kovacevich expects from this lying ass* apart from something asinine.

*Turbo or Zero - u-pickem

kim

Clarice, I think Bush and Cheney had somehow tapped into real understanding of the skeptical position on climate. I grant you that they still gave lip service, and they probably had to politically, to the prevailing winds about climate, but they stymied time after time any effort to encumber carbon. Maybe it was old-fashioned conservatism and maybe it was far seeing wisdom. Knowing the Bush Administration, I'll bet on the latter.

Furthermore, as the globe cools, this is going to become a potent political issue.
====================================

kim

Tom, this business of Obama asking Geithner to 'try' to stop the bonuses is just Axelrod attempting to focus populist rage on eeevil capitalists and away from the Democrats responsible for the mess. Note Barney Frank in a white hot turmoil. Distraction. It works as well as egresses.
=========================================

clarice
no doubt, the Democrats plan on playing the blame game to the hilt:

But the populist rage also might present a bigger challenge to the political party that’s more associated with big business, less regulation, and tax cuts for the wealthy. In fact, if there was a time for the Obama administration and Democrats to push to let the Bush tax cuts to expire, to press for the Employee Free Choice Act (or “card check”), or to institute new regulations, this is the time, right? Still, now’s a time when everyone in Washington is suddenly going to be channeling his/her inner-populist. Who will have the most credibility doing it? As for the short term, Congress is going to want a pound of flesh (and then some) from AIG. Obama also will discuss AIG during his remarks today.

If the economy really starts to meltdown as a result of the failure of the Obama Administration to come up with a viable plan to stabilize the banks and the financial markets, you can bet that they arleady have a fallback position with regard to blaming the rich for the nation's troubles. And Obama will use this resentment to get card check, health care, and other populist programs through Congress.

It will be class warfare on a scale never before seen in America - not even during the Great Depression.

http://www.americanthinker.com/blog/2009/03/democrats_will_ride_aig_backla.html


MarkJ

"It will be class warfare on a scale never before seen in America - not even during the Great Depression."

And class warfare will, very likely, result in armed warfare. And guess who has more guns and gear on hand? Hint: it ain't the Donks.

I think I know why Obama keeps bringing up FDR and Abe Lincoln as his role models. It's now clear His Majesty not only wants to preside over his very own Great Depression...but also his own Civil War.

bad

Tapper has Gibbs Tapper dancing: LUN

kim

He'll get a World War too, as a bonus.
=======================================

Rick Ballard

MarkJ,

Glasater linked the difference between popped today.

I don't think the daily two minute hate is going anywhere. Axelbama blew it right out of the chute by going after Rush. Everybody had to recalibrate their Progressive Stupidometers after that move.

Rick Ballard

between Obama and FDR

The new Preeviw setup is a real treat. SixApart Still Sux - and TyphusPad is their "best" product.

Tim P

I want to see a copy of the contracts that these executives have that provide them with bonuses for losing 10's of billions of dollars. I also think that any person involved in the compensation board for AIG should be terminated for incompetence

kim

Tim P, you have an excellent point. Bonuses should be for work that adds value to the company, not subtract it. This might be the way out of the maze. Of course, just try to nail the directors on the Remuneration Committees.
==========================================

bear1909

reveal your birth certificate lil bHo. let's put you out of your narcisstic misery.

we dont want a great depression or a civil war.

you achieved your boyhood dream of being elected president because of lil stickypants Georgy Soros (or whatever his real name is).

now leave office under a cloud of shame because u were never serious about being POTUS. just running and winning.

game over. now scram.

what is the Department of Energy doing in any kind of construction business project related to energy? just what the hell is it going to do with over a billion besides take 40 years to build anything that ALMOST works?

keep the one point five and cut the capital gains rate. stop dog dickin around, lil bHo. oh right. well, ya see lil bHo, cutting the capital gains rate means.... (dumb shit).

Bear1909 out

bad

My understanding is that the bonuses are "retention" bonuses, not "performance" bonuses.

kim

It's still a trick, bad; retain them if they are performing. Otherwise, why do it. I know I'm being pretty simple here.

Bear,
Is not rare.
==========================================

Ranger

clarice,

I would argue that if the DoE had to put up 3/4 of the money for an energy research project, and still had trouble getting private industry to put up the other 1/4, then there is not much promise of profit in the technology.

If you want carbon free electicity, look to nuclear power. The new peble bed reactor technology produces safe, clean, and cheap electricity. The only reason we are spending over 1 billion on Futurgen is to convince the Coal Miners Unions that the war on carbon will not mean an end to coal mining jobs.

kim

Yah, we have Chu, a prize physicist, building a perpetual motion machine. What will they think of next? A poseur for President? Yeah, that's the ticket.
===============================================

bad

I think the trick is igniting class warfare to distract from disasterous policies.

And everybody is falling for it.

kim

Too bad China is light years ahead of the rest of the world in pebble beds and will be franchising them all over the world while we're putting windmills where people ain't and building perpetual motion machines for the sheer politics of it.
==========================================

clarice

I'll not dispute that Ranger. I have been fighting for nuclear energy since the mid-70's with no good effect. I wanted only to note that although the Blago earmark pork story about the project is the prevailing one; the back story appears to be a major math error.

I think we did a better job on energy and education when we didn't have federal departments dealing with such things.

Charlie (Colorado)

It's still a trick, bad; retain them if they are performing. Otherwise, why do it. I know I'm being pretty simple here.

"Simple" isn't necessarily a good thing.

Here's the white paper from AIG explaining things.

Here's the gist:

(1) they wrote retention pay in to encourage people who knew things to stay.
(2) these contracts are legally binding.
(3) if they attempt to renege, they'll be due (and Tom already mentioned this above) the employees legal fees and double the bonus in damages.
(4) they would also open themselves up to these people claiming constructive termination, which would lead to more losses, abd
(5) might very well be legally a default that would then trigger lots of default clauses, exposing AIG to many billions more in losses.

It's no surprise that O decided to announce he wanted AIG punished, because he reliably will do whatever he thinks looks good at the moment. I'd bet $10 on Geithner quietly announcing on some Friday afternoon before a three-day holiday that they can't do anything.

Charlie (Colorado)

Uh, "and". I must be typing with the sniffles.

narciso

Certainly true, Clarice, we had nuclear power for thirty years, we had oil development for a hundred years before that, and as education, well that is certainly an open question.

bgates

the back story appears to be a major math error.
Your earlier quote,
The $1.8 billion estimate would have been $1.3 billion in 2005 dollars, a 39 percent increase, similar to cost increases at other projects of similar magnitude,
does not seem so much a defense of this project as an indictment of all the rest of them.

TCO

We should have just not bailed AIG out. The insured entities were not in danger (they are sheilded). Just let the derivative players (including counterparties) take their losses.

kim

The math error, clarice, is how they are trying to sell it now. Blame Bush, see? They still can't get around the thermodynamics of it.

Well, when it's not so simple it is more compelling, Charlie. So why can't AIG explain it like that, and why can't a wise administration understand it instead of demonizing it. Oh, forget I asked.
====================================

kim

Interesting, TCO. Where's the proof that the insured entities were not in danger?
=======================================

Charlie (Colorado)

On the same cereal box he gets his other "facts" from.

narciso

Discouraging news, all around, a little thanks to the evil form that is Elliot Spitzer, the demagoguery made possible,
one tiny glint of hope, in all this craziness, maybe

Bill in AZ

Top Stories headlines:

Obama pushes banks to lend more to struggling entrepreneurs

That worked so well with struggling homeowners for the last 20 years, why not? Better warn the grandkids.

Pofarmer

I think we did a better job on energy and education when we didn't have federal departments dealing with such things.

Yeah, no kidding. Homogenize a bunch of bad ideas and you get bad results. Fancy that. Central control is not generally a good thing.

ben

"Obama pushes banks to lend more to struggling entrepreneurs"

Yeah, he wants to finish them off himself with high taxes, more regulations and more environmental restrictions, there is no fun in it if they succumb now.

clarice

could be bgates, but until the present downturn, I expect overruns on big projects--say the Boston dig--were substantial. Of course, my memory could be wrong.

Vietnam Vet

Give them their damn bonuses, then apply the "9mm solution" that China invokes on greedy executives who cause pain and suffering for millions of people!!!

bad

Remember all of O's promises of no mortgage bailouts for the dishonest?

LUN read the comments

kim

Sure lend money to these people whose business model is going to change thanks to changes in capital gains laws, health insurance, and energy costs. Give them money while I screw them up completely and their creditors, too.

Surely Obama and Administration are aware of the double talk. Surely.
======================================

ben

"Remember all of O's promises..."

No, I just remember half of them were empty, unfeasible and demagogic. I didn't think much of the other half.

na

you can keep the change. while cigerette taxes rise ....another 11.00 a carton... thank you obama. how much does that make them now >??

Charlie (Colorado)

The problem is figuring out which half you mean, Ben.

TCO

kim it was discussed plenty on the internet. insured entities are protected by state law. The entity that did the trades does not have access to the protected assets of the state insurance companies. Although it just doesn't surprise me a bit that you understood this wrong.

you probably also think Goldman Sachs is a "bank". Sheesh girl.

Charlie (Colorado)

Speaking of, bd, here's a nice graf from the comments:

The fallout of the housing crisis will hit the innocent one way or another. It is unavoidable. The magnitude and duration of the impact can be affected. What I'm saying is that we can't cordon off the 'evildoers' and let their wickedness devour them. Their past actions will continue to bleed out into the market whether or not we prosecute them. The phenomenon of capitalization of value is what makes your house more valuable when your neighbor sells high and less when your neighbor sells low. Neither occurence depends on your behavior but both can affect your financial position.

daddy

I am probably misunderstanding this and mixing apples and oranges but;

1) Everyone agrees that the high cost of Union collective bargained wage contracts are at least partially if not primarily responsible for large portions of multiple American industry's (Autoworkers/Airlines) inability to remain competitive, to keep out of bankruptcy, or to turn a profit.

2) Everyone is mad at AIG, an entity entirely going broke, for honoring their wage contracts.

3) Therefore the Administration wants to force AIG to dishonor their employee's wage contracts, yet at the same is pushing to shove Unionization down the throats of America's remaining competitive non-Unionized industries so that these industries will then have to honor collectively bargained wage contracts that will absolutely result in making them less-competitive, less able to turn a profit, and more prone to banckruptcy.

TCO

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/29/AR2008092903121.html

Just for you Kimmie...darling...honey bunches. Teh wonders of Google!

Charlie (Colorado)

TCO, the problem is that you don't understand what "protected" means in this context. If AIG fails, then the insurance companies would be taken over by the various regulators, put under government control, and the assets sold off with policy holders having the first claim. If the assets arent sufficient, then the various state insurance funds are tapped.

In other words, what you're proposing is that the US should nationalize AIG completely and pay out pennies on the dollar to the insured people, instead of continuing it as a going concern while they sort out what the CDOs etc are worth.

Sounds great.

Charlie (Colorado)

Daddy, I don't think you're misunderstanding, but I think you're thinking farther ahead than the Obamaniks are. I honestly think it's like Billy Crystal's character Fernando. He does care what it means, or what happens, as long as it looks Mahvelous.

bad

Yup, Charlie, that's why I think Obama was insane to make those promises of bailouts only for "righteous" homeowners.

It's pretty obvious that anyone who lied to get the loan in the first place won't be disqualified for that reason.

kim

'Discussed plenty on the internet' does not constitute showing proof, TCO. You do know this was a global problem, not just one covered by state laws, right?

What protected assets of the state insurance companies? I grant you that I don't have a very sophisticated understanding of all this, but it sure sounds like you are talking nonsense.
======================================

Extraneus

Has Amtrak ever paid a bonus?

PeterUK

Daddy,
Might interest you to know that secret ballots for worker was a lynch pin of Margaret Thatcher's policy to bring the unions to heel.
Obama's Card Check will drag industrial relations back to the bad old days.

Don Meaker

Can we take it out of Congress's salaries and emoulments? There should be some savings from not running Nancy's jet, Barny Frank's condom-minium allowances, William Jefferson's Refrigerator bills....

SWarren

Bad,

Thanks for the Econlog link. Interesting discussion on the scoundrels.

bud

Bullshit. This isn't about "fair", it's about power; who has it, and who doesn't.

Pretty obvious which side of that equation you land on.

Yeah, I'm a taxpayer, and I'm pissed. I work for a profitable division (last year, the ONLY profitable division) of a multifaceted corporation. Said corporation is in finacial trouble because of shenanigans of clowns like AIG, and needs to cut expenses. Guess what? Profitable or not, I took a 10% pay cut at the beginning of the year. The jerks collecting "bonuses" (it isn't a bonus if it isn't tied to improvement, IMNSHO) are tied to the whole of AIG. If the other divisions were supporting them, do you think they'd whine about taking money from them? Hah!

Pull ALL the bonuses for EVERYONE in AIG.

TFB.

RichatUF

Has the Post Office ever paid a bonus?

Did Fannie and Freddie executives get bonuses for 08-they've lost more than AIG?

Maybe those who are getting bonuses could form a union.

TCO

kim, I frigging had a damn link in the next post. Go read it. Sheesh. You are such a rock dumb moron.

TCO

Charlie: You littlem commmie faggot. chapter 11 and seniority of claims is exactl;y the right way to handle this. Instead you had the Buch admin urging the NY Fed to get NY state to actually WAIVE the restrictions and allow the endangered part of AIG (corporate center) to draw on the sheilded assets. You fucking cunt. Go fucking die...you fucmking RINO maggot.

kim

It's an url, not a link, but in any case it won't load. Explain to me why Charlie's objection at 6:44PM is not valid?
===============================================

bgates

until the present downturn, I expect overruns on big projects--say the Boston dig--were substantial.
I'm sure that's right. I just don't think it's much of a defense.

ben

AP and Reuters reporting TCO had a nervous breakdown on JOM. Rumor has it he has a terminal case of invective and profanity, a common affliction of bloggers who run out of ideas or arguments. He will be taken to a padded cell and given fake darts to throw at all real and imagined RINOs and traitors.

mel

clarice-

The Mattoon project was, I feel, justifiably pulled and bad math may have been the wet paint on the justification. Between Durbin and Obama, in the Senate, and any of the other members of the House's Illinois Democratic Caucus, that project would have been hooked up to the milking machine that IS Illinois politics. Think the Big Dig had "overruns", those guys were amateurs in the federal slop trough. Five will get you ten that they could have spent that $1.8B within the estimated life of the project with not one dime going into the ground.

I need a bath just thinking about it.

narciso

SAdly Ben, he would probably qualify as an AP or Reuters stringer, but the point still optains,

seeyausa

these bonuses are not good and give cover to obama husseins 93 billion to overseas banks that no one is talking about

Brian

President Obama stands up and criticizes AIG for using 0.01% (400 million) of taxpayer's money in bonuses for top executives, but signs the $410 billion dollars spending bill with 1% (4 Billion) of it going to "Fat Cat" Legislators in the way of earmarks!!!!!

What A Show!

Brian Saunders
Charlotte, NC


clarice

Well, I blogged these two bonus posts at AT and whew--a lot of people aren't buying it, TM.

Frustrated American

Ok, all I need to say is that these guys at AIG did mess up and squander the money in many different ways; however, since when did the government have the power to break contracts set with employees? What kind of America are we living in? The percent of bailout they are paying these executives in bonus money is less than 1/1000 of the bailout funds received and they are under contract to get paid this with the company. What part of the constitution allows the government to breach basic concepts as a contract with an employer even one that received TARP funds? I understand the sentiment but let's be realistic that if you were under contract with a job site and they came back and said we are not going to pay you your money that you would be suing to high heaven. I'm sorry but this is miniscule and who is Barney Frank to think that he knows much about finances. Him and Dodd were the reason we got into this mess in the first place by requiring Freddie and Fannie to buy high risk loans from lenders. What lender wouldn't make these loans and sell them if there is a buyer? Enough said. Government is not the solution, they are the problem.

PeterUK

TCO
"Instead you had the Buch admin urging the NY Fed to get NY state to actually WAIVE the restrictions and allow the endangered part of AIG (corporate center) to draw on the sheilded assets."

I wouldn't say Obama was that butch,seems a little fey.
What's the matter petal,put your thong on back to front again?

PeterUK

"What kind of America are we living in?"

The America of 1692 - The Salem Witch Trials.For similar reasons.

gus

I've got a really really cool idea for Big Ears Dimwit the new President.
How about we default on all our loans to China. I mean we don't like them either.
Calling Obama a phony does a dis-service to phonies.

Charlie (Colorado)

Pull ALL the bonuses for EVERYONE in AIG.

Sounds fine.

"Oh? And when the last law was down, and the Devil turned 'round on you, where would you hide, Roper, the laws all being flat? This country is planted thick with laws, from coast to coast, Man's laws, not God's! And if you cut them down, and you're just the man to do it, do you really think you could stand upright in the winds that would blow then? Yes, I'd give the Devil benefit of law, for my own safety's sake! "

Charlie (Colorado)

You littlem commmie faggot. chapter 11 and seniority of claims is exactl;y the right way to handle this. Instead you had the Buch admin urging the NY Fed to get NY state to actually WAIVE the restrictions and allow the endangered part of AIG (corporate center) to draw on the sheilded assets. You fucking cunt. Go fucking die...you fucmking RINO maggot.

I don't think you should use dirty words you can't spell.

kim

The trouble is, Charlie, he's got nothing left for the real scum. Wasted his essence on me, poor dolt.

That's nice about giving the Devil benefit of the Law, for safety's sake. Where is it from?
=====================================

Charlie (Colorado)

Oh, sorry, Kim, I should have linked it. From "A Man for All Seasons", one of the great plays of the 20th century.

FroggyLady

So, uh... what about a 150% tax on any and all bonuses paid out by companies who have accepted "bailouts/assistance/subsidies/aid", etc, financed by OUR money?? I'll bet the putative "recipients" of said "bonuses" would cancel their "contracts" in a New York SECOND!! I've seen "retro" law changes before... why not NOW?!?!?

Molon Labe

"Securities Lending" = "Naked Short Sales"

LUN

Pablo Chardon

All this will stop when "WE THE PEOPLE" stand up together and put this country on notice and the politicians on notice that they work for us,"WE THE PEOPLE" dont work for them.There ties to large companies need to be cut, or we should just fire our politicians who are not doing what is best for "WE THE PEOPLE".
Also everybody with an AIG insurance plan should just drop them and go with someone else. SHUT THEM DOWN.......

qrstuv

"Interesting" bunch of new posters here.

So many of them have no problem with tearing up contracts. I wonder if they have thought through the implications of that idea?

I have an idea. Toss out contracts. Let's just do what's "fair." Who says what is "fair"? you ask. The People's Bureau of Fairness, of course.

They'll be stopping by to assist you in achieving "fairness" in your life, perhaps sooner than you think.

bud

Maybe it's the union militant genes in me coming out, but I smell good ol' boy network all over this crap.

WHo is it that's saying "We have to, it's in the contract"? Geithner, et al. These people all know each other, or they are frat brothers, or the same prep school, college, etc. That "contract" business is nonsense.

I've been involved with enough startups to know that *EVERY* round of new financing screws the previous rounds, and that employment contracts are routinely "renegotiated" then. How bad the previous rounds get screwed, and how much worse the employment contracts become is very much a function of how bad you need the money to keep going. AIG was at the tin cup stage. Those employment contracts were negotiated on Geithner's watch, and their generosity has nothing to do with necessity, but all to do with "I'll scratch your back this time, and you'll scratch mine next. For God's sake, we can never admit that what we do isn't worth the ludicrous amounts of money that we suck out of the system."

kim

Look to ludicrous pork, orders of magnitude more wasteful than this stuff, and not covered by contract law. You are being distracted, bud, and not for your own good.
========================================

clarice

If I didn't know better I'd think from all the new revolutionary posters we're getting that Alinskyites were afield on the IT agitatin'..If so, they are surely wasting their employer's money here..

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