Mob Rule

I see broadening support for mob rule on the question the AIG bonuses.  Let me single out Felix Salmon, who would rather type than do his homework:

If AIG simply didn't pay the bonuses, would the employees of the financial products arm really fancy their chances in court were they to sue to receive them?

It's possible that they would "win" such a court case -- if by winning you mean having your picture splashed across every TV screen in the land as an exemplar of out-of-control greed and avarice. Which is why AIG could probably have quite a persuasive conversation with the AIGFP employees, along these lines:

"We know we promised you this money, but it's clearly politically impossible for us to pay it to you. So you're not getting the bonus you were counting on. Sorry about that. At this point, you have three choices. You can continue to work for us, and keep your job. You can quit, and find a better-paying job elsewhere. Or you can quit, and sue us for the bonus that we promised you. Your call. But if you choose the third option, you'll probably want to hire a PR person at the same time as you hire a lawyer."

I suspect that most of the affected employees would not sue AIG, and that the bonus payments would therefore be saved. It's hardball, but it might well be effective.

Let's see - first, as Liddy explained to Geithner (or see ABC News or the WaPo), under the applicable law employees could sue for double their wages plus legal fees.  If we don't want to pay these people $165 million, how will we feel about paying them $330 million while enriching their legal teams?  Believe me or use your imagination - plenty of people at these firms are tough, proud, competitive, and very comfortable with lawyers and legal scuffles, and they will welcome the chance to double their bonus. 

There is also this cryptic passage in the Liddy letter - "individual managers who decide to withhold wages that are due are individually liable for violations of the Wage Act."  I don't know if that is a criminal or civil liability and I am confident Mr. Salmon has no idea either.  Maybe he would like to sign off on the order withholding the bonus pool and find out?  How cool would that be if Treasury Secretary Geithner were jailed and personally bankrupted after he loses this lawsuit?  The biter bit indeed. 

Second, as to the notion that these people will be nationally shamed - I hope we are not calling for the threats and intimidation suggested by Michael Crowley at TNR. . (And I deplore these death threats, even if the death is meant to be self-inflicted).  So what club is Mr. Salmon expecting to see wielded?  Does he seriously imagine that the Bear Stearns, Lehman, and Goldman employees who travel in the same social circles as the AIG people will now shun them?  Again, believe me or use your imagination - they won't.

Finally, AIGFP was involved in profitable lines of business apart from credit derivatives.  The management plan in March of 2008 was to ease out group head Joe Cassano (who had led the charge into credit derivatives) and keep the operation going by offering a retention pool of guaranteed bonuses (not incentive bonuses.)  Plenty of people who stayed were neither Cassano acolytes nor involved in credit derivatives, so the current demonization is a bit misdirected.  But satisfying, I'm sure.

MORE:  A rousing defense blaming all of us. 

A KEEPER:  I linked to the above headline but want to save it for hysteria posterity:

Senator suggests AIG execs should kill themselves

IOWA CITY, Iowa – Iowa Sen. Charles Grassley suggested that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant by resigning or killing themselves.

Grassley is the ranking Republican on the Senate Finance Committee with oversight for Medicare, so when it goes bust he'll know what to do.

FROM THE WAPO:

At the Federal Reserve Bank of New York, which has directly overseen AIG since its federal takeover in September, officials have studied the possibility of rescinding or delaying the bonuses. They even brought in outside lawyers for advice. The conclusion: If the bonuses weren't paid, the AIG staffers would be able to sue the company and probably would win, not just what they were owed but also punitive damages that would make the ultimate cost perhaps two to three times as high as the bonuses themselves.

Moreover, Fed officials also hope to keep current employees with the company. The senior executives whose decisions caused the company's collapse are long gone. Most of those left behind are trying to unwind complicated derivative contracts. Completing that process correctly is essential to preserving as much value as possible for taxpayers, officials at both the government and AIG have argued. If it is mishandled, it could expose taxpayers to billions of dollars in additional losses.

NOT JUST KABUKI, BUT DUMB KABUKI: From the Times:

WASHINGTON — President Obama and his top economic advisers scrambled to calm a nationwide furor on Monday over bonuses paid at the American International Group, even as administration officials acknowledged they had known about the issue for months.

One day after the economic advisers insisted that their hands had been tied by contracts requiring the payments, Mr. Obama ordered the Treasury Department to “pursue every single legal avenue to block these bonuses” and make the American taxpayers whole.

“In the last six months, A.I.G. has received substantial sums from the U.S. Treasury,” Mr. Obama said. “How do they justify this outrage to the taxpayers who are keeping the company afloat?”

...But administration officials conceded that almost all of the most recent round of bonuses, totaling $165 million, had been paid last Friday, one day before the Treasury publicly acknowledged that it had reluctantly approved the payouts. The officials said that people who received the bonuses would probably be able to keep them.

They have known about this for months, studied it carefully, and come up with no answers.  How does Obama help his image by acting angry and powerless?  Bring back "No Drama Obama"!  (Hmm, maybe we are seeing "No Karma Obama"?

I WANT A LAWYER:  The Law Blog at the WSJ engages in a bit of journalism:

The possible doubling [of the bonus pool after a court fight] is reportedly scaring off Geithner et al. from doing anything, for fear that the government could ultimately end up paying a lot more than it stood to get.

But how likely is a “double the damages” scenario? Apparently it has something to do with Connecticut law. We wanted to find out ourselves, so we called the good folks up at Wiggin and Dana in Connecticut and chatted wtih Lawrence Peikes, an employment lawyer in the firm’s Stamford office.

Peikes who is not involved in the matter, confirmed AIG’s assessment of the legal landscape, saying that a Connecticut statute — the Connecticut Wage Act — generally speaking allows an employee to recover double damages and attorneys fees where an employer withholds wages and the employee can show bad faith or unreasonableness. Peikes says retention bonuses may well be considered “wages” under the statute, and a situation in which “a company knows it is contractually bound to make a payment, but fails to do so” might well constitute bad faith.

I am pretty sure it is not good faith to argue that the retention pool payments are not polling well.

Comments

[bad]

Stupidity is incredibly bipartisan.

I blame O.

[clarice]

Yeah--I plead guilty to everything from 9/11 to the heartbreak of psoriasis..Wait!! If I am guilty of everything, I am really guilty and responsible for nothing. No?

TM, you've done a great job on this issue.

Shining a strong flashlight into the equivalent of the Dark Hole of Calcutta.

[Jane]

I say Senator Grassley and the rest of COngress should put their money where their mouths are. Let them take the Japanese approach first and the others can decide if they want to follow suit.

[bad]

I don't blame myself, TM.

I would have been shoving more money into the stocks market but was paying for college, cars and car insurance for teen-agers, instead.

Totally innocent on the other charges as well. So there!!

[Bob from Ohio]

An appalling display of how the civil legal system works.

There will be no trial or other occasion to publicly shame these people. This is not a criminal case where every court hearing requires a defendant to appear. No perp walks.

Since there appears to be no legal basis to deny the bonuses, the judge will almost certainly grant summary judgment in favor of the AIG plaintiffs. Maybe even a judgment on the pleadings.

All done by motion on paper without anyone showing up.

[MayBee]

hey even brought in outside lawyers for advice. The conclusion: If the bonuses weren't paid, the AIG staffers would be able to sue the company and probably would win, not just what they were owed but also punitive damages that would make the ultimate cost perhaps two to three times as high as the bonuses themselves.

Of course we know the admin was lying when they pretended to just this weekend find out about the bonuses.

It serves Obama's purposes, though, to pretend to be outraged now. One, it makes him look like a careful watcher of the taxpayers money (although a $165 million earmark wouldn't have raised his eyebrows).
But I think it is his goal to limit compensation of anyone who gets some portion of taxpayer money.
Which is scary, because he's expanding government like crazy.

Doctors better watch out.

[gus]

Very simple question for Obama the dimwit.
Should UNION WORKERS at Chrysler get paid?
We keep bailing out Chrysler. Why should these workers contracts be honored?
Which contracts can we ignore?

[PD Shaw]

"individual managers who decide to withhold wages that are due are individually liable for violations of the Wage Act." I don't know if that is a criminal or civil liability.

It's civil liability. The Conneticut Wage Act creates a cause of action against not only the corporate employer, but "the individual [with] the ultimate responsible authority to set the hours of employment and to pay wages and is the specific cause of the wage violation." Butler v. Hartford Technical Institute, 704 A.2d 222 (Conn. 1997) (cited in letter).

[clarice]

I particularly heart this:Grassley is the ranking Republican on the Senate Finance Committee with oversight for Medicare, so when it goes bust he'll know what to do.
TM is so cute when he's angry!

[Ranger]

I posted this in the other thread, but now that the WaPo article is here, too, I'll throw it up against the wall.

I think the WaPo article is a shot across the bow of the administration. The long term hands in DC fear and angry public. The target may be AIG today, but action has a logic of its own, and revolutions eat their young. Those elected officials stoking the fires now may draw the angry crowds to DCs door demanding accountability for the hundreds of billions of pork passed out in the Porkulus bill. Those truely angered by the AIG stuff will start turning out for "tea parties."

What's more, the anger focused on these people getting the bonuses at AIG is totally misplaced. These are people who could have abandonded the sinking ship to start new careers with healthy companies. Instead they were promised compensation to stick with a zombie and save the taxpayers a few billion dollars by unwinding these toxic contracts. Now, to distract the populous and satisfy the mob, we are going to punish these people. So, by all means, lets save ourselves $165 million now, because we won't even realize how many billions we've cost ourselves later in letting these people leave and those contracts explode on the taxpayers dime.

The problem with rousing the mob is that once the mob tastes power, it is impossible to quite it again. Each round of "justice" solves nothing, and leaves the mob that much more angry, and searching for new "evildoers" to punish.

[Ignatz Ratzkywatzky]

so when it goes bust he'll know what to do.

Sure he will. Raise everone's taxes and declare himself a heroic watchdog for the taxpayer.

[Rick Ballard]

TM,

Why not a Tea Party at Dodds house in CT every Saturday until he shuts up or quits? There was a time when the good citizens of CT knew how to tar and feather a dirty public official with dispatch.

You folks are getting too damned soft up there.

Jane,

That's the Felix Salmon idiot to whom I referred the other day. At heart, just another dirty socialist.

[Old Lurker]

"Doctors better watch out."

Ha. And their entire support staffs. And the owners of the affiliated service providers. And the drug execs. And the inventors of the drugs and devices. And the hospital administrators and exec staffs.

Who did we miss?

[clarice]

You may be right , ranger. I hope so.

Look at what that puke Dodd's doing--he wrote the bonus protection bit into the law and now wants to rescind the bonuses--oh and he was the biggest recipient of AIG campaign funds:
Dodd is such a puke when you buy him he doesn't stay bought:
"Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG: 0.9822, 0.2021, 25.91%) bonus recipients so the government could recoup the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing an AIG bonus tax.

While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law.

Also, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.

Dodd’s office did not immediately return a request for comment.

One of AIG Financial Products’ largest offices is based in Connecticut"

http://www.foxbusiness.com/story/markets/industries/finance/dodd-cracks-aig---time/

[Charlie (Colorado)]

NOT JUST KABUKI, BUT DUMB KABUKI

I suspect you've just written the eventual epitaph of the Obama Administration.

[RichatUF]

I'll ask a question cause I'm kind of curious and Tom mentioned it on the other thread.

If the Treasury and Geithner's old stomping ground the NY Fed were to actually stop the bonuses or try a claw-back, wouldn't that also abrogate any sort of non-compete clauses and non-disclosure clauses in their compensation agreement (though I'm not sure how those clauses would be enforcable in Singapore or Switzerland or where ever they would go to trade against AIG in the event this episode spooks enough of them to leave anyway).

Should be interesting to see Pigmy Geithner trying to defuse AIG without blueprints and the staff that can defuse the bomb decides to add in a few extra bobby traps for the tired and overworked Treasury Department.

[Trader Veritas]

A side aspect of this whole story that interests me relates to Eliot Spitzer. Recall that Spitzer forced Hank Greenburg out of AIG with a bunch of legal intimidation back when Spitzer wanted to be seen as the crusading AG to leverage his way into the governorship. I have to wonder if Greenburg would have allowed AIG to even move into the riskier areas that they have.

Maybe this is all Spitzer's fault!

[Ranger]

Instapundit explains exactly why the Beltway is so worried about Obama's assault on AIG bonus money:

CONGRESSIONAL PORK APOLOGISTS TELL US THAT EARMARKS DON’T MATTER BECAUSE THEY’RE A TINY FRACTION OF THE BUDGET: So why all the excitement about those AIG bonuses that represent only a tiny fraction of the bailout money? It’s all taxpayer money, right?

Posted at 10:25 am by Glenn Reynolds

You see, if people are going to get this angry about $165 million, imagine how angry they will be when they realize how many hundreds of billions of dollars of pork were in the Porkulus bill and the Omnibus spending bill and the $3.6 trillion Obama budget.

[RichatUF]

Trader Veritas-

AIG had a settlement with the SEC regarding the AIGFP and a deal with PNC Bank during Greenburg's tenure so I'm not so sure. It does appear that the unit in question did get wound up pretty well after Client #9 brought his special touch.

[MayBee]

Exactly, Ranger.

Everything Obama has done so far has shown us he's happy to spend a couple hundred million of taxpayer's money so he can spend billions more.

A $165 million earmark wouldn't have been worth his effort to sneeze at.
He gets more out of making highly compensated people into the enemy than he ever would have gotten out of keeping AIG from spending $165 million out of $170 billion.

[Charlie (Colorado)]

a few extra bobby traps

I think they only have bobby traps in the UK.

[pagar]

it makes him look like a careful watcher of the taxpayers money

This has to be a joke. This is a guy who took campaign funds from everywhere in the world, with contributor names like Mickey Mouse and claimed he didn't know how to prevent such things. A guy who has Rezko advising him on buying a house. A guy who apparently can't find his birth certificate after 40 some years of looking. Someone thought this guy was going to be a careful watcher of taxpayer money?

[PD Shaw]

"If the Treasury and Geithner's old stomping ground the NY Fed were to actually stop the bonuses or try a claw-back, wouldn't that also abrogate any sort of non-compete clauses and non-disclosure clauses in their compensation agreement"

I think as a practical matter, the employees would have to make a choice. They would either sue to enforce the contract and get the money, or treat the contract as breached and all restrictive covenants unenforceable.

[Jim Ryan]

I think they only have bobby traps in the UK.

Charlie, maybe Rich just didn't want to write a bad word?

[Jeff Bridge]

They should all be fired for failing and letting the company go down. Now that it is primarily owned by the taxpapers we should just put it out of commission or put Jesse James in as the CEO.

[pagar]

From Clarice's post above:

While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law.

Didn't we just have another version of this type of crisis a couple of days ago, when Obama signed some statement that Stem cell research had been changed and than a day later signed a bill outlawing his own signing statement. I get the feeling that the Democrats aren't too good at this governing thing.

[kim]

Jeff, firing all punishes the innocent along with the guilty. You like that?
=================================

[matt]

hear, hear, Jane!

These jerks are the most arrogant, two faced Januses in the country's history. What they do behind the door is completely at odds with their public pronunciations. The fix is usually in, and they all go out afterwards and laugh at the poor rubes they just conned.

[matt]

like I said last night, the government would hav to breach existing contracts, and the AIG employees would win unless of course Reichsprotektor Dodd issues a fiat....

[terry eckard]

to many attorneys talking bull... I am with you jeff! fire them all..or maybe just lay them off...like the rest of america...or send thier job to china...why are these people better than furniture builders,etc. who do they think they are? "politician's!!!" well...these guys set and watch the "bush bunch" thats right the bush bunch! rob us blind and said nothing.! now they are all goody goody !!!the American people want America back from these theives ...........

[kim]

I'm posting so I can see your comment, terry. Ready, aim....
====================================

[kim]

Fire! Oops, sorry all you innocent guys. You were in the way.

And find a little blame for the Dodds, the Franks, the Obamas, the CBCs, and the Boston Fed studies of the world, too. You might slaughter a few guilty ones in your outrage.
======================================

[narciso]

Good rant, there terry, reminds me of the Rodney Dangerfield line from 'Back to School'
"great teacher he really seems to care, about
what I have no Idea" to a rant by the late
Sam Kinison. You voted for the thieves and their facilitators like Dodd, top recipient of AIG, Countrywide, one of the top recipient of Fannie, Freddie, Lehman, probably Goldman.
Meanwhile the avenging angel, the next Murrow according to Fallows, Jon Stewart, has some
heavy Wall Street connections

[Charlie (Colorado)]

They should all be fired for failing and letting the company go down. Now that it is primarily owned by the taxpapers we should just put it out of commission or put Jesse James in as the CEO.

to many attorneys talking bull... I am with you jeff! fire them all..or maybe just lay them off...like the rest of america...or send thier job to china...why are these people better than furniture builders,etc. who do they think they are? "politician's!!!" well...these guys set and watch the "bush bunch" thats right the bush bunch! rob us blind and said nothing.! now they are all goody goody !!!the American people want America back from these theives ...........

Oh, come on you guys, think. I know it hurts to start, but with a little practice it's kinda fun.

The CEO who was responsible has already been fired. He's gone. AIGFP is already being shut down. The new guy is the one the government and the other creditors approved to manage the shutdown; the people getting the retention bonuses are the ones who he thought were needed to wind it down. We want them to wind it down, because that way we get back more money. We like that, because we've got $170 billion invested.

How many billions of dollars are you willing to sacrifice in order to have your revenge on the people at AIG?

[pagar]

Sen Grassley got his: $26,250

http://www.opensecrets.org/politicians/contrib.php?cycle=2008&cid=N00001758

If you want to know which politicians were getting what from AIG--Or which politicians owned how much AIG stock, here's a good article.

http://www.opensecrets.org/news/2009/03/before-the-fall-aig-payouts-we.html

[Charlie (Colorado)]

Charlie, maybe Rich just didn't want to write a bad word?

I would have just assumed he was referring to Congress.

[Charlie (Colorado)]

Pagar's links:

Grassley

AIG

[Jane]

Why not a Tea Party at Dodds house in CT

I'm in.

[Extraneus]

Where does he live in CT?

[RichatUF]

PD Shaw-

treat the contract as breached and all restrictive covenants unenforceable.

Curious, so they could resign, go to work for a soverign wealth fund (maybe someone with a grudge against the US-Libya or Russia perhaps) and since the contract is unenforcable bring the command codes for the bomb with them. I wonder if Schumer and Pigmy Geithner thought this all the way through.

[kim]

Heh, Weapons of Mass Destruction, eh, Rich?
=========================================

[Pofarmer]

Ya know, despite whatever "contractual obligations there may be, you have to admit that this was politically about as stupid as it could get.

Also, 73 of these bonuses were for over a million dollars. Now, I don't know what these high level clowns were making before. It seems to me the proper thing to do would have been to just say that, yep, you'll work here for free till we wind this thing down, we've already paid you 20 million, or whatever. The idea that the folks who fucked things up get to keep raiding kind of grates on the ole nerves, ya know?

[Ranger]

It seems to me the proper thing to do would have been to just say that, yep, you'll work here for free till we wind this thing down, we've already paid you 20 million, or whatever.

Unfortunately, there's an amendment in the constitution that bars involuntary servitude. In fact, I seem to recall that we fought a war over that at some point.

[RT]

Republicans warned a long time ago about impending problems (go to the video tapes!) and Libs smacked them down (again go to the video tapes!). Whoever said it in an earlier post was exactly right: you --- the american voters voting lib dem, the naive and gullible, uneducated or undereducated, unable to apply REASON to facts --- voted these lib dem idiots into office and some for term after term after term....Kennedy, Kerry, Maxine Waters, Pelosi, Dodd, Barney Frank and on and on and on. And now Obama with his history (or lack thereof)-- every possible reason was out there to not vote for him -- known and published liberal socialist record, lack of guts to vote yea/nay on senate issues, lack of legislation, no executive experience, questionable associations, etc. and yet he gets elected. And for your moderate Republicans out there who fell for it -- you deserve what we all will get. This is just the beginning, we will be paying for this administration in more ways than you can imagine for many, many years to come. I hope those who voted for this idiot and continue to vote for the idiots in your states are pleased now 'cause that won't last - at least if your objective and not with the media

[Pofarmer]

Call it punitive then, call it community service, but paying people in management millions that made 10's and sometimes hundreds of millions while their company went down the crapper just ain't right. The REALLY sad part is that these people will be free to hire out and do it all again.

[clarice]

Did someone send out invitations to a stupid convention to pop in here and post idiotic stuff today?

Where are all these dummies coming form?

[Extraneus]

Am I the only one here who's been paid a retention bonus by a company losing money? At the time, and it was more than once, I considered it fair based on the assumption that they'd have lost even more without me. But hey, who am I kidding? Maybe they'd have lost a lot less!

The lure of class-envy is strong, but pretty irrelevant. If all the AIG "execs" had just up and left instead of accepting the retention incentives, would the company have netted more than the $165M savings, or less? That's the question.

[Old Lurker]

Wondering the same thing, Clarice.

[Ranger]

Now, if people would just get as angry at the Fannie Mae and Freddie Mac crowd. Franklin Reins took almost $100 million out of Fannie Mae while driving it into the ground. Just last year http://www.nytimes.com/2008/04/19/business/19fannie.html?_r=2&adxnnl=1&oref=slogin&adxnnlx=1213218218-+MjcDtak7TCPIvZdGa5Eg>regulators sought:

...restitution totaling more than $115 million in bonus money tied to an improper accounting scheme.

The regulators said an accounting fraud at Fannie Mae included manipulations to reach earnings targets so that Mr. Raines, Mr. Howard, Ms. Spencer and other company executives could pocket hundreds of millions in bonuses from 1998 to 2004.

Where was the "populist outrage" over that?

[Charlie (Colorado)]

Call it punitive then, call it community service, but paying people in management millions that made 10's and sometimes hundreds of millions while their company went down the crapper just ain't right.

Unfortunately, as Ranger pointed out, we've eliminated slavery and indentured servitude.

[Charlie (Colorado)]

Ex, sadly, a lot of people are thinking about this entirely with their glands. Including a large number of "real conservatives" who are letting Barney Frank lead them about by their ... noses.

[Extraneus]

Where was the "populist outrage" over that?

It needed a leader, like Obama.

[Scott]

Charlie

Evidently some of our esteemed Senators and representatives are unaware of that. LUN

[Rick Ballard]

"Wondering the same thing, Clarice."

It's just a pod of Moby's passing through at the behest of the 0845 Fascist Directive commissars. Not a barrel of oil in 'em. Not worth chancing a good lance but fine target practice for those learning how to handle a harpoon for the first time.

Thar they blow!

[Ranger]

Call it punitive then, call it community service, but paying people in management millions that made 10's and sometimes hundreds of millions while their company went down the crapper just ain't right. The REALLY sad part is that these people will be free to hire out and do it all again.

Posted by: Pofarmer | March 17, 2009 at 03:39 PM

Well, once again, there is an amendment in the constitution that gives people a thing called "due process" before you can do that sort of thing to them. As to your other point, TANJ (There Ain't No Justice).

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as “bad luck.”

Robert Heinlein

[matt]

unfortunately retention bonuses are exactly what is necessary to keep good people at companies going down the tubes. Otherwise they leave and you're left with only the ones no one else will hire. Crooks, knaves, rapscallions all of them, but then again, that's a recommendation on Wall Street.

[Old Lurker]

The crime here that threatens our society is the appropriation of private enterprise by the government, and the intimidation of the ones not yet taken.

Alinsky would be proud of how easy it seems to be to work up the populist anger at these corporate excesses (bonuses today, jets tomorrow, or whatever), when what is being stolen before our eyes is the system created by our founders which has produced more good, more wealth, and more liberty than any system anywhere, anytime.

We're blowing it in just a few years.

It's not the stupid bonuses. It's this president and his un-American agenda, a quite stupid congress acting as a Board of Directors of businesses while writing tax laws to punish specific individuals...when they should simply be governing, and frankly a dangerously large group in the population too uneducated to appreciate the damage they do with their political support of the above.

Sheesh.

[bgates]

Clarice, the anger that we're seeing here reminds me of the approving link you posted to the fellow at that Massachusetts hospital who declared management would have to sacrifice more so that no janitor would lose a job. The hospital management had no legal obligation to do that.

The current AIG management may not be responsible for AIG's troubles, but no Massachusetts hospital created the housing bubble either. If we can cheer the latter for taking one for the team, why can't we jeer the former for taking 165M from the team?

I'm not endorsing the calls for indentured servitude; I don't think the federal government should get into the contract-destruction business. It would be nice if we had a vibrant civil society that could focus outrage on someone without the White House providing directions.

[RT]

To add to Rangers post ...All those Fannie Mae folks played key roles in Obama's campaign and election!! What a surprise!! Where is the outrage there? The dpuble standards as perpetrated by the dems lives on

[TM]

I have to wonder if Greenburg would have allowed AIG to even move into the riskier areas that they have.

Maybe this is all Spitzer's fault!

I have been assured (he said mysteriously) that Greenberg would have kept a much tighter lid on AIGFP. He set it up in 1987, led by Howard Sosin of Drexel. Cassano was the controller, brought over from Drexel by Sosin. Eventually, Cassano rose to the top, but the Credit Derivatives thing only took off like a balloon after Greenberg left (which may have merely been a reflection of the market, but who knows?)

[Fresh Air]

The retention bonuses likely weren't for "executives," they were for serious traders and product specialists who could have walked out of AIG and if not opened their own shop in about two weeks' time, at least gotten hired from a hedge fund or other IB rather quickly.

Stay-puts are almost always paid during mergers of securities firms to ensure the human capital doesn't walk out the door. You may not think these guys were worth anything. Maybe they weren't. But the decision to retain them was made a year ago, before the U.S. taxpayers got involved.

[Fresh Air]

Old Lurker--

Check out stimulus.org for the real outrages. We're now funding slave trails in Natchez, Miss., which the last time I visited had about 25,000 people living in it. The cost of this deluxe tourist destination: $600 million. Haven't heard a peep about this in the media, have you?

As Bob Dole once asked, "Where is the outrage?"

[clarice]

bgates, the mass General move was admirable because it was voluntary. Remember that.

[RichatUF]

kim-

Heh, Weapons of Mass Destruction, eh, Rich?

More like Unrestricted Warfare.

It is interesting, in Obama's rulebook, a few rules state that before engaging he should know the thumbscrews (he seems to have the demogogary down though) and have a very good idea the type of people you are dealing with.

The guys working at AIGFP, already wounded by how badly the company has failed and now targets by a political class they overwhelming support, could be picked off by organizations that look at economics through a national power lens. I wasn't joking when I said they could get picked up by a sovereign wealth fund, and in that capacity, be as dangerous as a chemist or physist working in an Iranian lab.

[Charlie (Colorado)]

bgates, if I saw any sign that the people expressing the most outrage had a tiniest hint of a clue what they're proposing -- from Kevin Drum's lack of understanding of basic facts, to Pofarmer's proposal to revive slavery -- maybe I'd be more comfortable with the idea of social opprobrium.

Right now, though, what I'm mostly seeing is a bunch of "true conservatives" being suckered by Obama, Schumer, and Frank trying to use them.

[clarice]

And DODD, Chaco..and DODD..

[daddy]

Please Senator Grassley, lead by example.

[kim]

So, we can blame Giuliani for messing with Drexel, eh?
==========================================

[Charlie (Colorado)]

And DODD, Chaco..and DODD..

Sorry, the list is long enough it's hard to get all the deserving.

[bgates]

Clarice, read my last paragraph.

I wasn't joking when I said they could get picked up by a sovereign wealth fund

-and redistribute American wealth around the globe, saving a world in need from white folks' greed. Good thing nobody in a position of authority would traffic in that sort of nonsense.

Charlie, I've read enough of Drum and Pofarmer to object to lumping the two of them together, never mind referring to Po as a "true conservative", like he's Kathleen Parker all of a sudden. I do think you're right that if Obama supports directing outrage at AIG, we should recognize it as a distraction.

[RT]

Old Lurker....you apply entirely too much reason and rationale to your points....well beyond the capacity of some here to really get it

[kim]

Sure it's a distraction. Notice that Dodds and Frank were two of those with the most denuncitory fervor. And even though these bonuses weren't really the fault of Obama, they represent, for the enraged populace, the real mismanagement that Obama is presiding over. He's got to lay blame elsewhere, and distract the rage. The problem is, that's poor management, too. These people know only media manipulation, Alinsky's rules, and Chicago thuggery. It won't get them far in the real world. Meanwhile, master and mistress of more clever politicking, the Clintons, wait in the wings. Don't put Biden and Pelosi on a plane together. We'd soon see a birth certificate if that happened.
========================================

[clarice]

I'm leaving, bgates..The demagoguery business is easier and more profitable than the sage old woman one.I am sure there's a role in this for you and Hit, too, if you care to hop aboard the Full of It Express.

[pagar]

Fresh Air,Maybe it's just me but I'm not getting anything at your url.

Check out stimulus.org for the real outrages

[Rick Ballard]

"I'm leaving, bgates.." she said, as she looked around the lobby of the Hotel California. Odd, there are no EXIT signs visible. Lots of soft chairs and a clear, warm light but the doors... where are the doors?

[Charlie (Colorado)]

never mind referring to Po as a "true conservative",

I'm okay with translating that to "idiots."

[Pofarmer]

to Pofarmer's proposal to revive slavery --

Oh, good lord man, take it down a notch. How many contractors have had to finish a job that they'd underbid and lose money on it? Were they working as indentured servants or slaves for that time? Get a grip, I'd bet most of those folks taking bonuses had salaries many, many times the national average already, and had for years.
The affront here, is that you are basically paying protection money to the people that were in place while the company was failing to not go out and further hurt the company. The whole thing is ridiculous, and never should have been started. People and businesses MUST BE ALLOWED TO FAIL. And no, I don't know the ultimate cost to that, and neither do you, but there are literally trillions of dollars being spent using this as an excuse.

Clarice, the anger that we're seeing here reminds me of the approving link you posted to the fellow at that Massachusetts hospital who declared management would have to sacrifice more so that no janitor would lose a job. The hospital management had no legal obligation to do that.

Now you hit one that is currently pissing me off. My wife had to take a 3% pay cut at the hospital where she works. All the staff did. Upper management took a 5% paycut, and the CEO did take a 10% cut. All this is for an indeterminate amount of time. Now "Contract expenses" ie doctors, amount to 10% of the entire hospital budget, for a very small fraction of the staff. Did they take a haircut??? HELL NO. They have a contract, they're entitled, but everybody else can be summarily cut. I mean, MY GOD THEY MIGHT HAVE TO DELAY BUYING THEIR NEXT FARM OR SOMETHING. So, I guess, yes, TANJ. The Janitors take a cut, and the Dr.s keep living high on the hog.

Nobody is being suckered, but a good amount of us are becoming righteously pissed off, and you're way off base if you thing Schumer, and Dodd and company aren't the recipients of it. People out here in the Hinterlands are getting HOT about this shit.

[Pofarmer]

never mind referring to Po as a "true conservative",

I'm okay with translating that to "idiots."

Charlie, you're a smart guy, but you have a tendency to be an asshole to people you disagree with.

[RichatUF]

bagtes, I don't understand your comment? Are you claiming that the demagoguery is proper and honoring AIG's committments is equivalent to Rev. Wright?

[clarice]

Well--here's some more news that will piss you off, Po--ACORN's been hired to "help" with the census.

In other news a bankruptcy judge ruled--first time--that under the law the bankruptcy of Vallejo Ca permits it to void all its union contracts. Given the large number of municipalities and states that are near bankrupt in large part because of huge, underfunded union benefit contracts, this case is being very closely watched. The clear language of the statute on bankruptcy seems to support the judge's position. Private partes cannot void these contracts by bankruptcy.

[RichatUF]

No the only thing I've seen is a bunch of "rightous anger" directed at a division at AIG and some obscure analyst at Citi. Where is the anger for Dodd-he can retreat to his Irish cottage? Schumer, he was out in the front leading the charge. The Dems, by leading the 2 Minute Hate, will get a nice bounce in the polls until the next target of the 2 Minute Hate comes along. And guess what-we'll still be on the hook for AIG's bonuses, which Geithner will probably release on a Friday afternoon, after the next target has been picked.

[Neo]

Isn't the point of the whole "AIG thing" to provide a test case to see if Congress can abrogate a "civil contract" since the same issue will at stake with the whole "cram down" mortgage legislation as well ?

[kim]

Well, Rich, we know that demagoguery is ineffective governance. It will fail. Sorry about all the victims in the meantime.
=====================================

[Pofarmer]

Rich, you don't have to beleive me, but there are a lot more people pissed off by the actions of our govt than the actions of AIG, and I think that will only intensify. I think this deal by Frank and Dodd and Schumer is a DEFLECTION. They are trying to get rid of some of the heat. Folks know what's going on. The bonuses at AIG were distasteful, but nobody is going to argue that they weren't legal and binding. Ultimately, this will all go back on Congress.

[Captain Hate]

I hope you're right Po, but my experience tells me that mob action is rarely pretty or smart and always looks for the scapegoat of least mental resistance. With the MSM running interference for the likes of Barney Frank, I'm counting on the only satisfaction I get from him is having seen O'Reilly (usually *not* one of my favorite people) reduce him to a sputtering incoherent queen.

[kim]

The beauty of it for me is the need for deflection and distraction. This is perceived, rightly or wrongly, as a failure of executive action. Obama and Gang look like fools here. Now, since they are fools, I'm happy, even thought the distraction is demagoguery.

As they are demagogues, though, and since they now have some populist anger to harness, I worry. This is chaotic governance and we are weakening, as a nation, by the week.

Where are the wise leaders to change this dynamic? Rudy? Mitt? Sarah? Get busy, y'all.
=====================================

[Caro]

Why not look at these bonuses as "stimulus?" We have given a lot more money to pork and probably less worthy projects. These AIG employees probably have families and spend a lot of trickle-down dollars.

Since I am a painter I can only sell now to people who have some significant (to me, anyway) discretionary cash. I need these people! I wish they were all in the US of course.

[bgates]

Rich, I've already said I don't think the government should get in the contract negation business. That being said, while these AIG people have a legal right to the money, I remain unconvinced that they're morally in the right to keep it. So while I don't think the government has any business clawing the money back, I can't bestir myself to defend the contract-abiding millionaire recipients of government money from the outrage of people like Pofarmer. Maybe if he was saying AIG was the whole problem and forget about Congress, but he's not.

So those are my thoughts about demagoguery.

As to your sovereign wealth idea, my perhaps poorly expressed reaction was that if someone wanted to transfer huge amounts of money from Wall Street to various Third World kleptocracies, driving Wall Streeters into the arms of the sovereign kleptocrats with threats of confiscatory taxation would be one way to do it, and aren't we lucky such an idea would never occur to true patriots such as our head of state.

[RichatUF]

Pofarmer-

Bullshit. The American people voted overwhelmingly to get into a welfare line, why else would Pelosi have a reliable "blue dog" coalition to move her San Fransisco left agenda. All the outrage didn't stop the stimulus bill, nor the omnibus spending bill, or re-work on both the Citi and AIG bailouts. No the muddle doesn't "know what is going on" because they are spending their time sending death threats to workers at AIG's Connecticut office-because the 2 Minute Hate hasn't run its course.

Oh look at this-Defense cuts because the world loves us now, concurrent, with Obama's plan to make veterans pay for treatment. Wonder if the national security risk has been priced in yet?

[Captain Hate]

As they are demagogues, though, and since they now have some populist anger to harness, I worry. This is chaotic governance and we are weakening, as a nation, by the week.

I worry about this too. I first became concerned about this during the agonies of Slick, when Muffer let loose with her "vast right-wing conspiracy" garbage. I thought this would be a topic of ridicule, only to find out that it was being seriously considered on quisling outlets like NPR, where talking points put together by maggots like Sidney Blumenthal were being discussed as if they were the height of learned discussion.

Speaking of Sid, it's hard to believe that a such a retrograde lifeform hasn't found a niche in Bammer the Clown's traveling carny.

[kim]

Well, Rich, I think Pof has a point. Some of this anger will be felt by Congressional folk, and re-directed by them toward the executive. It is a slow process, and not sure, but not entirely ineffective. Many people trust their own Congressmen and women, and many have open lines of communication to them. This will have some effect. It may change the dynamic about the health, energy, and education initiatives. For that we should be thankful.
====================================

[kim]

The beauty of this brouhaha is that it is clearly on Obama's watch. No blaming Bush possible here. He's trying to distract the anger on to eeeevil capitalists, but the whole nation knows this is his baby. Just a little pinprick to O'Bubblemania.
=======================================

[kim]

A little demagoguery of my own? Uhh, hunh, you betcha. But that's the jiu-jitsu of demagoguery. Turn loose the dogs, and sometimes they turn on you like Acteon's hounds.
==================================

[kim]

And again, Obama's demonizing capital and capitalists. Not likely to be good for the market. This guy is circling. Show me the....oh, never mind; we may not need that.
==========================================

[bgates]

The American people voted overwhelmingly to get into a welfare line, why else would Pelosi have a reliable "blue dog" coalition to move her San Fransisco left agenda. All the outrage didn't stop....

Well, of course it didn't stop legislation. Popular sentiment in a republic doesn't mean anything - unless the representative-pickers remember the how the representatives treat them.

And if the American people voted overwhelmingly for exactly what the Democrats are doing - that's Obama's line, surprised to see you using it - why would there be any outrage at all?

[kim]

Heh, I just thought of a good one: Show Me the Certiorari!
===================================

[kim]

Oh, bgates, he was just being bitter. This empowers the Republicans and the moderate Dems in Congress, be not mistaken about that.
======================================

[DebinNC]

Rich, thanks for that article on Gates. What he intends to do makes sense to me if he's as described in that piece. I just hate the thought of what BO will misuse any savings.

[pagar]

Oh look at this-Defense cuts because the world loves us no

Russia-UK-Barackistan to play game of nuclear rearmament/disarmament chicken?

the key priority for re-equipping Russia’s military is emerging clearly: there will be no backing away from updating Russia’s strategic nuclear capabilities.”

There is no need for spies, CIA or anything but common sense. Russia is rearming, (and telling us they are) especially in the nuclear field while the US apparently intends to disarm ourselves completely. The UK has already effectively disarmed them selves by bringing in such large populations of Fanatical Muslims.

[JM Hanes]

RichatUF & Charlie:

Did you ever pin down a source for Karl Rove opining on the legality of Campaign Obama's successor organizations? I was just blogging about "Orgainize for America," the White House Cavalry and Obama's data bank, and I'd love to add a update from Rove.