Thursday, March 19, 2009

The A.I.G. Blues

This is a week for the blues, isn't it. This is my second post in two days dealing with the blues. Edward Liddy, the CEO of A.I.G. was certainly singing the blues today in a congressional hearing on Capital Hill. He is the face that will be paraded before congress and the American Public that will symbolize the greed, avarice, and utter arrogance of Corporate America. The long story made short is this...

This mope had to explain to congress and the American people why his company paid $165 million dollars in "Retention Bonuses" to its employees (some who, by the way, were no longer working for the company) and, at the same time, accepting bailout funds from the American taxpayers. Breaking it down in laymen's terms, that's like me coming to you late at night needing to borrow $ 20.00, which might be your last twenty until payday, while I'm holding $ 50.00 in my back pocket that you know nothing about.

These "Retention Bonuses" were made to some traders and executives whose risky financial behavior caused the company's near collapse. You understand, of course, that news of this has a lot of people justifiably upset. The president asked for legislation to give the government vast new powers over institutions like A.I.G. to protect the public. I can hear Rush Limbaugh, Glenn Beck, and Sean Hannity now saying that we are being led down the road to socialism. The fact that these people have proven that they can't be trusted when given a free hand for close to twenty years and four presidential administrations prior to President Obama has just gotten by them. Three of these previous administrations were Republican and a Republican House and Senate watched over them.

For sure, Edward Liddy was on the hot seat today and he did the best impersonation of Elmer Fudd I've heard since Mel Blanc was living. Oh, he said that the American people have spoken and that A.I.G. has heard them loud and clear. He also said that some of the employees have even volunteered to give some of the money back. I doubt that they "volunteered". They were probably the lowest on the totem poll and were "told" that they had to give it back. I found the whole thing laughable myself.

The government is already overseeing banks and the Federal Deposit Insurance Corporation (FDIC) exercises some regulatory control over them. However, A.I.G. is not a bank... it's an insurance company and it is not subject to the same oversight that banks are. For that reason, President Obama will have to ask for a different kind of regulation.

Perhaps Beck, Hannity, and Limbaugh are right... with the government close to nationalizing banks, insurance companies, the automobile industry, and let's see... who else did we bail out (?), one must wonder what happened to "free" enterprise? Sad to say... it's going the way of dinosaurs and public trust... extinction.


James Perkins said...

The nerve and arrogance of these guys surprises even a skeptic like me.

Simon Bastion said...

Free enterprise run amok..That's what this is an example of.

Grover Tha Playboy said...

Tony Soprano had more honor than these gangsters at AIG.

TATE2 said...

It takes nerve to ask for a bailout
and then take it and BLOW UP!!!!
These cats are gangsta..and that aint a compliment.

Jazzy said...

AIG practically started the financial collapse in the nation last fall and they have the nerve to try and pull something like this?? Bonuses for executivs that
f____ed up!!! Unbelievable.

Swaggie said...

They need to give that money back and then resign...but of course that aint gonna happen.

Political Sean said...

Once again another on point post Keith..

Toni said...

I was watching Edward Liddy on the news...He was sweating buckets as
well he should have been.

Angie B. said...

AIG finances a lot of things...Sporting events, Motion Pictures, you name it, they have their hands in it..Of course someone that big should be regulated..To much of the public's welfare is involved.

Sunflower said...

You are right when you say that AIG
and other institutions like it have had a free hand for twenty years of de-regulation and have just run wild. They have proven that they can't be trusted without
goverment regulation.

Vanessa said...

You know what? I don't care what Glenn Beck and the right wing crowd says..20 years of Republican deregulation and hands off has led us to this..I am in favor of putting the clamps on the banks so that this doesn't happen again.

Lisa said...

Great post Keith...You made it plain for a person like me who was striving to understand what was going on.

Halo said...

@lmao at Grover and his Tony Soprano anology..I agree, these CEOs are like gangsters and they do have a lot of gaul..

Anonymous said...

The President that you people love so much allowed it..He didn't put the necessary "regulations" on AIG when he allowed them to be "Bailed out"

Captain Jack said...

America will soon take on "The European model of near socialist government. That is not as bad as it sounds..These countries still have free enterprise, but the major means of production and wealth are regulated and controlled
by the government which ideally represents the public(people's) intrests.

Keith said...

I'm going to allow the anonymous comment to stand, only because it is a serious point that bares looking at and it does not seem to be idiotic.

Anonymous said...

They are supposely giving the bonuses back. They shouldn't have gotten them in the first place.

Arlene said...


Please tell your anonymous commentor that his people constructed the bailout plan for AIG. Our president, the one we love, was elected on November 4, 2008 and took office on January 20, 2009. The AIG bailout was formulated by the previous administration. Anonymous must remember Geo. Bush and Dick Cheney were in charge at the time. Some of us are not surprised that these bonuses were allowed to stand. Remember, it's Republicans who believe in self help for others and tax breaks and bailouts for themselves and their friends. Remember, anonymous, Reagan said wait for the "trickle down" and all will be well. Is it?

Isn't it cute that the people "victimized" by Bernie Madoff want a bailout? Had they made an 18% profit on their money, everything would be okay. "Regular" people should be satisfied with 2 or 3% return on investments.

Yes, the rich ARE different.

ShellyShell said...

I work at one of the Investment Banks that didn't need a bailout! Because we got in the subprime mess late in the game and our write-offs were less! We still wrote off a few billion!

I semi feel for Liddy because he became CEO after the fact. Why he would walk into that shyt I will never know! I think the people who got millions should return that shyt but not everyone at AIG is a criminal there are some who work hard and having that 25k means alot. No matter who's at fault. All I's weren't dotted and T's weren't crossed and they dropped the ball!

I work hard for my money and some in my group come to rely on our bonuses. I honestly didn't think we were getting one this year and we did and I was thankful....although it was down 60% but it was extra cash nonetheless! I guess me working on Wall st. I can see both sides!

Kofi Bofah said...

"Mope?" you are putting Liddy in with a common criminal.

Although I have also railed against AIG - we need to be clear on this. (And I touched on this point)

Liddy is the FOURTH CEO of AIG since this meltdown. These contracts were not put together on his watch. The cat calls for Liddy to step down are ridiculous.

Who do people want to run this company?

If we brought Jack Welch back from retirement to run AIG - America would be calling for him to resign next week over deals that were put together 18 months ago.

Kofi Bofah said...

Arlene and Anonymous are both out of line and need to study up. (Although there is some Truth to what they are both saying).

Stop pointing fingers, either way and I am in no mood to write a dissertation.

1: Bush was more so embraced by the Democrats than he was by his own party in his final days with the 2008 Economic Recovery Act (Bailout).

2: The holes in the legislation that made bonus clawback nearly impossible did come on Obama's watch.

3: Republicans speak as if they want Obama to fail - but then turn around and wave the flag of patriotism. This makes no sense.

GOOGLE Democrats Senator Dodd and Timothy Geithner. Watch how they both are taking shots at each other to apply blame for this fiasco.

The Truth is that the U.S. Economy is so complex - that few people have the answers. But, if you want to mouth off - at least do your research first.

Anonymous said...

Liddy was up there sweatin' like a pig at a roast party. There is simply no explanation for this corporate hustle-it's utterly disgusting and they should all be sharing a cell with Bernie Madoff!

BTW: thanks for stopping by my blog brotha.


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