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Again, all the money was used to fulfill contractual obligations. A whole lot more money (like 100 times more) went to fulfill contracts with foreign banks than did contracts with domestic employees. Your argument doesn't really hold much of anything. You're saying that AIG just shouldn't be paying money they owe their employees, because you want to continue to believe that there are villians there who deserve their punishment.
Paying off financial obligations to another bank or business is not the same as paying off bonuses to people who work there. The government could have said "hey, you don't have any fucking money. Here is some money to pay off other banks and insure your shit so you don't go under", the government has no obligation give them any money, and they do not have to give them money to pay off employees that wouldn't even have a paycheck.
These people can then sue AIG. Maybe by the time the company turns around and makes a profit AIG could pay off their contractual bonuses.
Well, the government didn't stipulate which contracts they should and should not make good on. And I don't think I much approve of the assumptions you're saying they should have assumed. You say they should pay back all their CDS debt to foreign banks, even though those foreign banks failing maybe ought to be what happened since getting so heavily invested in CDS is a big part of what caused this mess. And, you know, they aren't American and this is American tax money. But they shouldn't honor compensation contracts to employees. Because those employees are villians or whatever. I don't get it.
@Yar: I think you're deflating their base compensation. My friend is still a junior banker at one of the smaller firms on Wall Street and made $60,000 in base salary her first year on the job while receiving an $80,000 bonus at the end of her first year. That is not lower-middle class, not by a long-shot, particularly for a single person with no children (and it doesn't count all of the perks that came along with her job, like black car service and meals). $60,000 is a lot of money right out of college, with little work experience other than internships at financial institutions. It's hardly lower-middle class, even in NYC.
Really, people who make $60K need to be denied their bonuses? How far does wealth hatred reach? $50K? $40K? I think the answer is, "anyone who makes more than me."
Yeah, I agree. Populist outrage might actually hurt the recovery because, like it or not, additional bailouts of financial institutions are going to be necessary. We haven't gotten anywhere near the bottom of this, considering the massive amount of toxic debt still gumming up the sheets of Citigroup, BofA, etc.
I think people have their hearts in the right place (this isn't FAIR!) but the sad truth is that it isn't fair but we have to live with that for now so we can fix what's broken to get our economy going again. We can save the grandstanding and arm waving for AFTER this is all over (and hopefully, we can change things so we don't have to do this again any time soon).
Yeah I guess I'm just looking for a little more detail and direction in people's wrath. The media likes to throw big numbers and weighted words at you, and I just am dumbfounded at the amount of rage that even the President himself seems to pretend at all this, without even knowing the specifics and the rationale.
The current CEO has only been there a few months, coming in after much of the bailout money, and he was put there by the government. He makes $1/year, and all the executives already voluntarily gave up all 2008 bonuses and 2009 raises. He is the one saying that these remaing bonuses to non-execs are owed and cannot be cancelled. We aren't talking about executives anymore. At some point you ahve to accept that in order to keep doing business, people have to be paid what they were told they'd be paid.
They contractually will have to pay the people their money. however saying it's "just how they do business" is silly. Maybe it's time they fundamentally reevaluated how they do business because their current model obviously sucks some serious cock.
They've already agreed to that as well. THe 2009 bonus structure is being overhauled.