Comments on: Very-quick thoughts on the AIG bonus kerfuffle

By: Change Your Life for Better

Change Your Life for Better — Wed, 18 Mar 2009 05:35:45 +0000

Ok, AIG is burning all the cash given through FED. But what I don’t understand is how much would it help by cutting the bonuses which are less than 100 times the bailout money.

We need to stop them from wasting bailout package. Though cutting bonuses is needed to raise the morale but it is drawing too much attention!

By: Shoebox

Shoebox — Tue, 17 Mar 2009 20:29:32 +0000

In reply to Charles H. Green.

I think in this case it’s pretty straight forward. Congress had the choice to allow AIG to go bankrupt. If they had, all of these contracts would have been nullified or settled via the bankruptcy procedures. I think it also would have been acceptable to make their initial support contingent on changing some of these not unlike a prepackaged bankruptcy. The problem with so much of what comes out of Congress is that they have become very shallow thinkers, not willing to look at the implications or details of the laws they pass. Hugo Chavez gets to implement laws based on what he “wants” to happen rather than the language in the laws. I suppose we could operate like he does….oh wait, that’s exactly what Congress wants to do!

By: Charles H. Green

Charles H. Green — Tue, 17 Mar 2009 17:54:12 +0000

What’s your view on the “sanctity of the contract” vis a vis the insurance contracts AIG wrote?

They were contracts, yes? They were violated, yes? Perhaps because of willful malfeasance on the part of those who wrote them? Perhaps due to spectacular incompetence at risk management by the now-bonused?

How does one distinguish which “contract” is more sanctified?

By: HeatherRadish

HeatherRadish — Tue, 17 Mar 2009 15:29:51 +0000

I keep seeing people–self-described “educated” people–say, “And this is why we should let Congress regulate banking and business more!” with absolutely no concept that Congress regulating that which it doesn’t understand is what precipitated the whole meltdown in the first place.

That drives me more nuts than companies’ internal workings.

By: Shoebox

Shoebox — Tue, 17 Mar 2009 13:33:32 +0000

This is an attempt to politicize an issue that is a non issue. It’s one more example where Congress (remember The Won was a member and in fact pushed for the second tranche) didn’t know what they were doing and screwed up with “emergency” legislation that had zero details included.