As for the frequent comparisons to the UAW - they voted and agreed to concessions in retirement and overtime benefits, not pay, and just like the retention contracts themselves, this was done to keep employee pay competitive and to keep the company running.
This is factually incorrect and your entire passage assumes that a) the brokers have better opportunities elsewhere when bonuses have been cut or eliminated across the financial sector (which is why this particular case is drawing such ire) and b) that somehow the knowledge of the completely harmful scams that almost killed AIG and did huge damage to the US economy are justification for not only retention but financial enticements to retain that knowledge. Both assumptions are ill-founded.
So are people really angry about this? I mean, really truly angry?
Or is this just mock outrage, being used to drive forward a political agenda?
I'm leaning toward the latter.
Mock outrage?
The company contributed to our current financial situation, takes our money to stay afloat, maintains the luxurious standards that its executives and staff are accustomed to, posted record quarterly losses, and to top it all off decides it appropriate to give out hundreds of millions of dollars in bonuses to its financial division.
So are people really angry about this? I mean, really truly angry?
Or is this just mock outrage, being used to drive forward a political agenda?
I'm leaning toward the latter.
Mock outrage?
The company contributed to our current financial situation, takes our money to stay afloat, maintains the luxuriously standards that its executives and staff are accustomed to, posted record quarterly losses, and to top it all off decides it appropriate to give out hundreds of millions of dollars in bonuses to its financial division.
Really, there's nothing to be upset about.
I keep seeing a recurring theme though; Nero fiddling as Rome burns, the rich old white men lighting their cigars with burning $100 bills, etc. That seems a bit too simplistic to me.
The bonuses paid are the current source of anger, correct? And what was the nature of those bonuses again?
So are people really angry about this? I mean, really truly angry?
Or is this just mock outrage, being used to drive forward a political agenda?
I'm leaning toward the latter.
Mock outrage?
The company contributed to our current financial situation, takes our money to stay afloat, maintains the luxuriously standards that its executives and staff are accustomed to, posted record quarterly losses, and to top it all off decides it appropriate to give out hundreds of millions of dollars in bonuses to its financial division.
Really, there's nothing to be upset about.
I keep seeing a recurring theme though; Nero fiddling as Rome burns, the rich old white men lighting their cigars with burning $100 bills, etc. That seems a bit too simplistic to me.
The bonuses paid are the current source of anger, correct? And what was the nature of those bonuses again?
Performing their job duties as of 2008.
Problem is, the company didn't have enough capital to pay it out (or they would if they had to liquidate their holdings by 100% or something retardedly stupid like that). Company on the verge of bankruptcy wouldn't be able to pay out the bonuses or even the severance pay, despite being the contract. Unfortunately said company took massive amounts of money for a bailout to keep the company afloat. Then money was used to pay salary to people who were the "talent" that created the mess.
Whilst I'm sure the contract said more than "Show up at 11:00 for tee off, don't forget to bring your towel," I can't in good conscious say they deserved it, even to honor the contract legally. There should've been stipulations on the money going in, ie, "You can't pay anyone an extraordinary amount because you obviously don't have the capital to do so, you get to keep your job, but obviously concessions have to be made for this to not end badly. Either way CEO [fumbduck here] won't be receiving his $250kabillion bonus this year."
I don't honestly see anything wrong with that, but I'm sure I'm jaded by my meager salary that pales in comparison to his, not even considering the bonus. I'm a little bitter that money, all of our money -- mine and yours, is going to help these people get more pay and I have to live paycheck to paycheck basically.
bowen on
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
So are people really angry about this? I mean, really truly angry?
Or is this just mock outrage, being used to drive forward a political agenda?
I'm leaning toward the latter.
Mock outrage?
The company contributed to our current financial situation, takes our money to stay afloat, maintains the luxuriously standards that its executives and staff are accustomed to, posted record quarterly losses, and to top it all off decides it appropriate to give out hundreds of millions of dollars in bonuses to its financial division.
Really, there's nothing to be upset about.
I keep seeing a recurring theme though; Nero fiddling as Rome burns, the rich old white men lighting their cigars with burning $100 bills, etc. That seems a bit too simplistic to me.
The bonuses paid are the current source of anger, correct? And what was the nature of those bonuses again?
Some sort of bullshit incentive to stay with AIG. Fuck them. Seriously, fuck them. I'm aware they have to keep some contractual obligation or something, but if there's any legal recourse, we should take it, and screw them so hard. Also, they don't need bonuses, because their incentive is that they are employed.
I think our recourse is going to, unfortunately, have to be paying on those contractual obligations. And even after that AIG is still going to be tough to fuck with because of the size of their portfolio of assets. We can't just let them crash; that would be monumentally bad for just about every financial institution everywhere. But we can't let them attempt to bully us to use the money as they damn well please.
Split up the company and choose not to honor contractual obligations of companies that give bailouts if the contract has a bonus stipulation that is more than $1 million ? I think $1 million is even too much. Why not just no bonuses at all?
bowen on
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
Republican Sen. Charles Grassley of Iowa didn't appear to be joking, however, when he spoke with Cedar Rapids, Iowa, radio station WMT.
"I would suggest the first thing that would make me feel a little better toward them [AIG executives] is if they follow the Japanese example and come before the American people and take that deep bow and say, 'I am sorry,' and then either do one of two things: resign or go commit suicide," he said.
"And in the case of the Japanese, they usually commit suicide."
Grassley later had an apology issued on his behalf. I think Gosling is going to have to add a rule that says something like: "You should never have to state 'I did not mean to imply that they should actually commit suicide.'"
The government buys 80% of AIG and appoints a new CEO at no pay. All 2008 management bonuses and 2009 pay raises are cancelled.
Many key employees naturally respond with "it's time to leave." They can go make more elsewhere.
Yeah, I hear the financial sector is doing really well right now.
Lots of people hiring.
After this I imagine a lot of people wouldn't mind leaving the financial sector.
Yeah I hear the every-other-part-of-the-economy is doing really well right now.
Lots of people hiring. Especially in the salary range they'd be getting at AIG.
There are still jobs to be had in this economy. Hell, we're hiring.
I read a fascinating article in the Atlantic (I think) that talked about what our economic landscape may look like next. The author was saying that the financial sector needs to contract by about 30% in terms of workforce, so it's likely that a lot of people working for AIG and etc. now are going to be looking for new jobs regardless.
So maybe the best thing would be to let the sector downsize itself to something more appropriate. Sucks for all the finance majors and whatnot, but if my career field started hemorrhaging jobs and I couldn't get one, I'd probably do the smart thing and change careers.
I'm also growing to like this idea of forcing the people wanting their bonuses to litigate. Besides being a serious investment of time and money, there's no guarantee that it'll be worth the effort on their part. Much better for them to settle and get some better terms than go through a protracted legal battle. We all know how slow shit is when you're trying to sue the government, after all.
So are people really angry about this? I mean, really truly angry?
Or is this just mock outrage, being used to drive forward a political agenda?
I'm leaning toward the latter.
Mock outrage?
The company contributed to our current financial situation, takes our money to stay afloat, maintains the luxuriously standards that its executives and staff are accustomed to, posted record quarterly losses, and to top it all off decides it appropriate to give out hundreds of millions of dollars in bonuses to its financial division.
Really, there's nothing to be upset about.
I keep seeing a recurring theme though; Nero fiddling as Rome burns, the rich old white men lighting their cigars with burning $100 bills, etc. That seems a bit too simplistic to me.
The bonuses paid are the current source of anger, correct? And what was the nature of those bonuses again?
Performing their job duties as of 2008.
Problem is, the company didn't have enough capital to pay it out (or they would if they had to liquidate their holdings by 100% or something retardedly stupid like that). Company on the verge of bankruptcy wouldn't be able to pay out the bonuses or even the severance pay, despite being the contract. Unfortunately said company took massive amounts of money for a bailout to keep the company afloat. Then money was used to pay salary to people who were the "talent" that created the mess.
Whilst I'm sure the contract said more than "Show up at 11:00 for tee off, don't forget to bring your towel," I can't in good conscious say they deserved it, even to honor the contract legally. There should've been stipulations on the money going in, ie, "You can't pay anyone an extraordinary amount because you obviously don't have the capital to do so, you get to keep your job, but obviously concessions have to be made for this to not end badly. Either way CEO [fumbduck here] won't be receiving his $250kabillion bonus this year."
I don't honestly see anything wrong with that, but I'm sure I'm jaded by my meager salary that pales in comparison to his, not even considering the bonus. I'm a little bitter that money, all of our money -- mine and yours, is going to help these people get more pay and I have to live paycheck to paycheck basically.
But the thing is, the bonuses were known about - this isn't something that just suddenly came up. The compensation plan has been in place for a while now, right?
And I'm sure Congress had to know about it, right?
It just seems a bit suspicious to me that the outrage is coming now, when the bonuses are due. The provision mentioned on page 1 of this thread:
We have been advised that the bonus provisions of the American Recovery and Reinvestment Act of 2009 prohibiting certain bonuses specifically exclude bonuses paid pursuant to pre-February 11, 2009 employment contracts.
That was put into the stimulus bill by Chris Dodd...am I wrong or is it an amendment specifically designed to protect this sort of payment.
And now he's apparently leading the charge to get that money back via taxes? I'm sorry, I just don't buy it. I don't think we're hearing the whole truth from Washington.
It's an outrage now because suddenly the public knows about it. I'm sure the treasury was privy to the information but I'm not sure every Tom, Dick, or Harry had the information. From what it appears, it doesn't look like the members of Congress knew either.
Contracts aren't supposed to be public information anyways. So I doubt many people knew save the board of directors.
bowen on
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
The government buys 80% of AIG and appoints a new CEO at no pay. All 2008 management bonuses and 2009 pay raises are cancelled.
Many key employees naturally respond with "it's time to leave." They can go make more elsewhere.
Yeah, I hear the financial sector is doing really well right now.
Lots of people hiring.
After this I imagine a lot of people wouldn't mind leaving the financial sector.
Yeah I hear the every-other-part-of-the-economy is doing really well right now.
Lots of people hiring. Especially in the salary range they'd be getting at AIG.
There are still jobs to be had in this economy. Hell, we're hiring.
I read a fascinating article in the Atlantic (I think) that talked about what our economic landscape may look like next. The author was saying that the financial sector needs to contract by about 30% in terms of workforce, so it's likely that a lot of people working for AIG and etc. now are going to be looking for new jobs regardless.
So maybe the best thing would be to let the sector downsize itself to something more appropriate. Sucks for all the finance majors and whatnot, but if my career field started hemorrhaging jobs and I couldn't get one, I'd probably do the smart thing and change careers.
As I'm sure you know, there has been a huge shift in the job market over the last 20 or 30 years from goods-based companies to services-based companies. This is generally a good thing, it means our economy is progressing and so forth. The catch is when there's an economic downturn services are typically the first to go. Most people are adverse to the change, however as it can look like a step "backwards". Working for a company that produces an actual physical product may not be as fancy as consulting or futures trading or whatever but it's nice to work for a business that is tied to a physical product.
But the thing is, the bonuses were known about - this isn't something that just suddenly came up. The compensation plan has been in place for a while now, right?
And I'm sure Congress had to know about it, right?
The Treasury Secretary was only informed of the upcoming scheduled "bonus" payout late last week.
I'm also growing to like this idea of forcing the people wanting their bonuses to litigate. Besides being a serious investment of time and money, there's no guarantee that it'll be worth the effort on their part. Much better for them to settle and get some better terms than go through a protracted legal battle. We all know how slow shit is when you're trying to sue the government, after all.
You realize that this is on shaky legal ground and I don't think anything is preventing them from forming a class and litigating as part of a class action lawsuit. So basically you would be spending a lot of government resources trying to fight something that has a high probability of succeeding anyhow out of a sense of spite and/or anger. That is not a good idea in terms of good governance.
So are people really angry about this? I mean, really truly angry?
Or is this just mock outrage, being used to drive forward a political agenda?
I'm leaning toward the latter.
Mock outrage?
The company contributed to our current financial situation, takes our money to stay afloat, maintains the luxuriously standards that its executives and staff are accustomed to, posted record quarterly losses, and to top it all off decides it appropriate to give out hundreds of millions of dollars in bonuses to its financial division.
Really, there's nothing to be upset about.
I keep seeing a recurring theme though; Nero fiddling as Rome burns, the rich old white men lighting their cigars with burning $100 bills, etc. That seems a bit too simplistic to me.
The bonuses paid are the current source of anger, correct? And what was the nature of those bonuses again?
People are angry that the jerks who got us into this mess are getting paid bonuses on the taxpayers dime because they had a contract, meanwhile blue collar workers who also had contracts are taking pay cuts due to renegotiation.
You're pretty out of touch if you think that is mock outrage to make a political point.
I'm also growing to like this idea of forcing the people wanting their bonuses to litigate. Besides being a serious investment of time and money, there's no guarantee that it'll be worth the effort on their part. Much better for them to settle and get some better terms than go through a protracted legal battle. We all know how slow shit is when you're trying to sue the government, after all.
You realize that this is on shaky legal ground and I don't think anything is preventing them from forming a class and litigating as part of a class action lawsuit. So basically you would be spending a lot of government resources trying to fight something that has a high probability of succeeding anyhow out of a sense of spite and/or anger. That is not a good idea in terms of good governance.
Yes, forcing the (admittedly dishonest and borderline if not actually criminal) cocks to litigate to get their contractually mandated bonuses is abandoning the rule of law. There is a similar situation in Britain with Sir Fred Goodwin and his cock hammeringly disgusting pension payout where a similar idea was floated (along with the idea of legislation to strip him of his extra-pension provision) and the same argument stands: it is a terrifyingly incorrect step for the government to take. It makes them no better than a junta run by the howling savagery of the mob.
I'd kind of like to know where the individual responsibility for this comes in. These guys receiving the bonuses in question work in a department of AIG that lost the company hundreds of billions of dollars through irresponsible, borderline-fraudulent behavior. Why would they accept the "bonus"? I know the answer is "because it's money promised to them via way of contract." Or "they're greedy assholes and they dont mind that they ran a company into the ground and now want taxpayers to up and support their stupidity." I'm sure if they wanted to waive that money they could though, so why don't they?
I'm feeling some odd sense of ethics that doesn't exist in contractual agreements between employers and employees.
Uh, how is making them litigate abandoning the rule of law. Isn't it the law that people who are in dispute about the terms of a contract may have the dispute arbitrated by a judge? This is no different than the way the DMCA is used as a bludgeon against individuals or small companies who might have a decent case but can't afford to take the case to trial. It'd be nice if this tactic was used for good instead of evil for a change.
The government buys 80% of AIG and appoints a new CEO at no pay. All 2008 management bonuses and 2009 pay raises are cancelled.
Many key employees naturally respond with "it's time to leave." They can go make more elsewhere.
Yeah, I hear the financial sector is doing really well right now.
Lots of people hiring.
After this I imagine a lot of people wouldn't mind leaving the financial sector.
Yeah I hear the every-other-part-of-the-economy is doing really well right now.
Lots of people hiring. Especially in the salary range they'd be getting at AIG.
There are still jobs to be had in this economy. Hell, we're hiring.
I read a fascinating article in the Atlantic (I think) that talked about what our economic landscape may look like next. The author was saying that the financial sector needs to contract by about 30% in terms of workforce, so it's likely that a lot of people working for AIG and etc. now are going to be looking for new jobs regardless.
So maybe the best thing would be to let the sector downsize itself to something more appropriate. Sucks for all the finance majors and whatnot, but if my career field started hemorrhaging jobs and I couldn't get one, I'd probably do the smart thing and change careers.
As I'm sure you know, there has been a huge shift in the job market over the last 20 or 30 years from goods-based companies to services-based companies. This is generally a good thing, it means our economy is progressing and so forth. The catch is when there's an economic downturn services are typically the first to go. Most people are adverse to the change, however as it can look like a step "backwards". Working for a company that produces an actual physical product may not be as fancy as consulting or futures trading or whatever but it's nice to work for a business that is tied to a physical product.
I personally don't think it's a step forward at all. All it is, is the numbers proving we can no longer make products at a marketable price point. I'd hardly call that progress.
Uh, how is making them litigate abandoning the rule of law. Isn't it the law that people who are in dispute about the terms of a contract may have the dispute arbitrated by a judge? This is no different than the way the DMCA is used as a bludgeon against individuals or small companies who might have a decent case but can't afford to take the case to trial. It'd be nice if this tactic was used for good instead of evil for a change.
No, it would be nice if this tactic wasn't used at all. Capriciously trying to negate contractual obligations because, well, you don't like them, is definately undermining contract law. There isn't a dispute as far as I can see. The employees fulfilled the terms of the contract, people are just mad that the contracts existed in the first place.
The longer this thread goes on, the more the defenders of this sound like Bush apologists, which is troubling to me. I've seen appeals to patriotism (not here per say, but elsewhere), people advocating pouring government resources into dubious witch hunts, people advocating bending or breaking the spirit of the law, use of anger and spite as a guiding factor in decision making, and focusing on small speed bumps instead of systemic problems.
Nobody knew what they were going to do other then AIG and the treasury. Hence the "we have to give them the money now with no oversight, and I can't get in trouble for what happens" crap Paulson pulled. The sounded the alarm, the bucks flew out and now the government and AIG and hand wringing with "oh well, it's the law".
Interesting NYT article, and gets to the crux of why AIG is getting away with this...
A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not? They know how bad it is. They built it.
So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company.
Pretty much "we have to pay them off so they don't fuck us". :x
And my favorite part...
Of course, if taxpayers had not bailed out A.I.G., these contracts would not be worth anything. Andrew M. Cuomo, the attorney general of New York, made the point on Monday, when he subpoenaed A.I.G. for the names of the people who received the bonuses. If A.I.G. had spiraled into bankruptcy, its employees would have had to get in line with other unsecured creditors.
Right, so if we hadn't bailed them out the contract means dick and they would have to sue AIG for money they do not have.
Their stance is like the mafia, pay me so I don't burn down your fucking house and break your legs.
Uh, how is making them litigate abandoning the rule of law. Isn't it the law that people who are in dispute about the terms of a contract may have the dispute arbitrated by a judge? This is no different than the way the DMCA is used as a bludgeon against individuals or small companies who might have a decent case but can't afford to take the case to trial. It'd be nice if this tactic was used for good instead of evil for a change.
Forcing someone to litigate to get that which is contractually obligated to them is just a flat out bad thing to do. Now if there's evidence that these contracts were either fraudulently obtained, that they were written with intent to not benefit the shareholders, or that the employees breached their contract then they well could be sued and/or have their bonuses withheld.
I don't think there's enough info in the public domain to be able to make that decision though. State of play at the moment means that AIG can't just not pay the bonuses, it would be both a slam dunk case for the employee's lawyers and a vastly dangerous precedent.
Uh, how is making them litigate abandoning the rule of law. Isn't it the law that people who are in dispute about the terms of a contract may have the dispute arbitrated by a judge? This is no different than the way the DMCA is used as a bludgeon against individuals or small companies who might have a decent case but can't afford to take the case to trial. It'd be nice if this tactic was used for good instead of evil for a change.
No, it would be nice if this tactic wasn't used at all. Capriciously trying to negate contractual obligations because, well, you don't like them, is definately undermining contract law. There isn't a dispute as far as I can see. The employees fulfilled the terms of the contract, people are just mad that the contracts existed in the first place.
The longer this thread goes on, the more the defenders of this sound like Bush apologists, which is troubling to me. I've seen appeals to patriotism (not here per say, but elsewhere), people advocating pouring government resources into dubious witch hunts, people advocating bending or breaking the spirit of the law, use of anger and spite as a guiding factor in decision making, and focusing on small speed bumps instead of systemic problems.
Forcing someone to put up or shut up with litigation is a common practice. All I'm saying is that doing so would force them to decide how much their bonuses are worth. Obviously it would help if there was some evidence that the contracts were made in bad faith or with the express purpose of circumventing the restrictions of the bail out.
Yes, forcing the (admittedly dishonest and borderline if not actually criminal) cocks to litigate to get their contractually mandated bonuses is abandoning the rule of law. There is a similar situation in Britain with Sir Fred Goodwin and his cock hammeringly disgusting pension payout where a similar idea was floated (along with the idea of legislation to strip him of his extra-pension provision) and the same argument stands: it is a terrifyingly incorrect step for the government to take. It makes them no better than a junta run by the howling savagery of the mob.
Wrong. A junta would chain them to their fucking desks and force them to work at gunpoint until they were done untangling the derivatives and other products they created.
Would anyone like to present a real argument against altering or refusing to honor these contracts? You've said it's bad, you've compared it to the howling savagery of the mob, but there's no substance here. Do you have anything to back up your arguments? Is there a reason you've chosen not to post any?
No one's suggesting we force them to litigate. We simply renege on the contracts. It's entirely reasonable, considering the severe changes in circumstances from when those contracts were written- contracts have been broken for far less. (And I'd bet dollars to donuts that a decent lawyer can find a clause somewhere in there that'd allow them to do this on decent legal footing too.) They can negotiate in good faith, or they can sue. Same deal as the UAW got, which seems pretty good considering auto workers didn't actually fuck the economy in the first place. What's good for the goose is good for the gander.
And if they'd rather walk out, maybe we take another look at the junta approach.
Forcing someone to put up or shut up with litigation is a common practice. All I'm saying is that doing so would force them to decide how much their bonuses are worth. Obviously it would help if there was some evidence that the contracts were made in bad faith or with the express purpose of circumventing the restrictions of the bail out.
We understand what you are saying. Me personally, I believe they do not deserve nor should they get the bonuses but. . . to do it by just not paying them? That is a Pandoara's Box on top of a minefield in a swirling vortex of future disaster. Not only does it violate the principle of letting the guilty man go free to avoid punishing the innocent but it sets a horrible precedent for future actions by not just this administration but future administrations and private entities alike.
If there's indications of bad faith that hot damn yes, nail the mutha fuckers to the mast. Absent of that, we're shit out of luck.
Wrong. A junta would chain them to their fucking desks and force them to work at gunpoint until they were done untangling the derivatives and other products they created.
Would anyone like to present a real argument against altering or refusing to honor these contracts? You've said it's bad, you've compared it to the howling savagery of the mob, but there's no substance here. Do you have anything to back up your arguments? Is there a reason you've chosen not to post any?
It's against the law for one. They could likely just sue to recoup the bonus they were legally entitled too. If you alter the law it is going to either be unconstitutional or else it will set terrible precedents in contract law that are likely to have a lot of unintended consequences.
No one's suggesting we force them to litigate. We simply renege on the contracts.
They will litigate if you do that.
It's entirely reasonable, considering the severe changes in circumstances from when those contracts were written- contracts have been broken for far less.
You don't just break contracts for employee compensation due to 'changing circumstances'. Even in a liquidation, which is about the worst possible form of bad circumstances, employee compensation is at the top of the heap for repayment IIRC, though in that case retention bonuses are subject to certain provisions (though it isn't clear that even then these bonuses would have violated those provisions). And I'd imagine most of the time breaking those contracts would be actionable as well, it just isn't worth it if the company is already liquidated or insolvent. AIG has money thanks to Uncle Sam.
They can negotiate in good faith, or they can sue. Same deal as the UAW got, which seems pretty good considering auto workers didn't actually fuck the economy in the first place. What's good for the goose is good for the gander.
They already accepted stipulations going forward. Things were already renegotiated going forward as far as I know. This all is concerning a contract that has already been fulfilled by one of the parties.
A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not? They know how bad it is. They built it.
So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company.
Pretty much "we have to pay them off so they don't fuck us". :x
See, that's what the SEC and fraud investigations are for. If anyone knows of a broker or executive planning on doing this or currently doing this they should be reported and then lap up their tears as their ass is thoroughly raped by a regulatory body that actually wants to do its job now.
A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not? They know how bad it is. They built it.
So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company.
Pretty much "we have to pay them off so they don't fuck us". :x
See, that's what the SEC and fraud investigations are for. If anyone knows of a broker or executive planning on doing this or currently doing this they should be reported and then lap up their tears as their ass is thoroughly raped by a regulatory body that actually wants to do its job now.
Man, we don't have a royal family in this country, and even our celebrities are a bit threadbare these days, so what do we worship? Institutions. The institution of law. The institution of marriage. Hell, the institution of slavery didn't even end until after a tumultuous civil war.
Both American citizens and the government are so preoccupied with abiding by existing institutions that nobody knows how to think about changing them. I mean, to be perfectly honest, it makes perfect legal and contractual sense to allow these bonuses to go to the AIG employees. It even makes perfect sense to honor these contracts, less the AIG folks jump ship and leave us in an even worse predicament.
But it boggles my mind that nobody has looked at the institutional framework that allows these practices to even "make sense" in the first place and said, "Hey, there might be something wrong with this." You'd think a recession would create an excellent opportunity to do so.
Doesn't bankruptcy pretty much allow the renegotiation of contracts? Or was this cleared up somewhere else in this thread?
If anything, take all the stimulus money back, put them in debt, force them into bankruptcy, and then negate the contracts that says the tax payers have to pay these guys for ruining the economy.
Posts
Or is this just mock outrage, being used to drive forward a political agenda?
I'm leaning toward the latter.
Yeah I hear the every-other-part-of-the-economy is doing really well right now.
Lots of people hiring. Especially in the salary range they'd be getting at AIG.
This is factually incorrect and your entire passage assumes that a) the brokers have better opportunities elsewhere when bonuses have been cut or eliminated across the financial sector (which is why this particular case is drawing such ire) and b) that somehow the knowledge of the completely harmful scams that almost killed AIG and did huge damage to the US economy are justification for not only retention but financial enticements to retain that knowledge. Both assumptions are ill-founded.
QEDMF xbl: PantsB G+
You're right, but it could potentially help bring it around faster.
Mock outrage?
The company contributed to our current financial situation, takes our money to stay afloat, maintains the luxurious standards that its executives and staff are accustomed to, posted record quarterly losses, and to top it all off decides it appropriate to give out hundreds of millions of dollars in bonuses to its financial division.
Really, there's nothing to be upset about.
NintendoID: Nailbunny 3DS: 3909-8796-4685
I keep seeing a recurring theme though; Nero fiddling as Rome burns, the rich old white men lighting their cigars with burning $100 bills, etc. That seems a bit too simplistic to me.
The bonuses paid are the current source of anger, correct? And what was the nature of those bonuses again?
There are still jobs to be had in this economy. Hell, we're hiring.
Performing their job duties as of 2008.
Problem is, the company didn't have enough capital to pay it out (or they would if they had to liquidate their holdings by 100% or something retardedly stupid like that). Company on the verge of bankruptcy wouldn't be able to pay out the bonuses or even the severance pay, despite being the contract. Unfortunately said company took massive amounts of money for a bailout to keep the company afloat. Then money was used to pay salary to people who were the "talent" that created the mess.
Whilst I'm sure the contract said more than "Show up at 11:00 for tee off, don't forget to bring your towel," I can't in good conscious say they deserved it, even to honor the contract legally. There should've been stipulations on the money going in, ie, "You can't pay anyone an extraordinary amount because you obviously don't have the capital to do so, you get to keep your job, but obviously concessions have to be made for this to not end badly. Either way CEO [fumbduck here] won't be receiving his $250kabillion bonus this year."
I don't honestly see anything wrong with that, but I'm sure I'm jaded by my meager salary that pales in comparison to his, not even considering the bonus. I'm a little bitter that money, all of our money -- mine and yours, is going to help these people get more pay and I have to live paycheck to paycheck basically.
that's a contract too.
Grassley later had an apology issued on his behalf. I think Gosling is going to have to add a rule that says something like: "You should never have to state 'I did not mean to imply that they should actually commit suicide.'"
I read a fascinating article in the Atlantic (I think) that talked about what our economic landscape may look like next. The author was saying that the financial sector needs to contract by about 30% in terms of workforce, so it's likely that a lot of people working for AIG and etc. now are going to be looking for new jobs regardless.
So maybe the best thing would be to let the sector downsize itself to something more appropriate. Sucks for all the finance majors and whatnot, but if my career field started hemorrhaging jobs and I couldn't get one, I'd probably do the smart thing and change careers.
But the thing is, the bonuses were known about - this isn't something that just suddenly came up. The compensation plan has been in place for a while now, right?
And I'm sure Congress had to know about it, right?
It just seems a bit suspicious to me that the outrage is coming now, when the bonuses are due. The provision mentioned on page 1 of this thread:
That was put into the stimulus bill by Chris Dodd...am I wrong or is it an amendment specifically designed to protect this sort of payment.
And now he's apparently leading the charge to get that money back via taxes? I'm sorry, I just don't buy it. I don't think we're hearing the whole truth from Washington.
Contracts aren't supposed to be public information anyways. So I doubt many people knew save the board of directors.
As I'm sure you know, there has been a huge shift in the job market over the last 20 or 30 years from goods-based companies to services-based companies. This is generally a good thing, it means our economy is progressing and so forth. The catch is when there's an economic downturn services are typically the first to go. Most people are adverse to the change, however as it can look like a step "backwards". Working for a company that produces an actual physical product may not be as fancy as consulting or futures trading or whatever but it's nice to work for a business that is tied to a physical product.
The Treasury Secretary was only informed of the upcoming scheduled "bonus" payout late last week.
You realize that this is on shaky legal ground and I don't think anything is preventing them from forming a class and litigating as part of a class action lawsuit. So basically you would be spending a lot of government resources trying to fight something that has a high probability of succeeding anyhow out of a sense of spite and/or anger. That is not a good idea in terms of good governance.
People are angry that the jerks who got us into this mess are getting paid bonuses on the taxpayers dime because they had a contract, meanwhile blue collar workers who also had contracts are taking pay cuts due to renegotiation.
You're pretty out of touch if you think that is mock outrage to make a political point.
Yes, forcing the (admittedly dishonest and borderline if not actually criminal) cocks to litigate to get their contractually mandated bonuses is abandoning the rule of law. There is a similar situation in Britain with Sir Fred Goodwin and his cock hammeringly disgusting pension payout where a similar idea was floated (along with the idea of legislation to strip him of his extra-pension provision) and the same argument stands: it is a terrifyingly incorrect step for the government to take. It makes them no better than a junta run by the howling savagery of the mob.
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Currently Ebaying Nothing at all but I might do in the future.
I'm feeling some odd sense of ethics that doesn't exist in contractual agreements between employers and employees.
I personally don't think it's a step forward at all. All it is, is the numbers proving we can no longer make products at a marketable price point. I'd hardly call that progress.
No, it would be nice if this tactic wasn't used at all. Capriciously trying to negate contractual obligations because, well, you don't like them, is definately undermining contract law. There isn't a dispute as far as I can see. The employees fulfilled the terms of the contract, people are just mad that the contracts existed in the first place.
The longer this thread goes on, the more the defenders of this sound like Bush apologists, which is troubling to me. I've seen appeals to patriotism (not here per say, but elsewhere), people advocating pouring government resources into dubious witch hunts, people advocating bending or breaking the spirit of the law, use of anger and spite as a guiding factor in decision making, and focusing on small speed bumps instead of systemic problems.
Interesting NYT article, and gets to the crux of why AIG is getting away with this...
http://www.nytimes.com/2009/03/17/business/17sorkin.html?no_interstitial
here is the "good" part
A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not? They know how bad it is. They built it.
So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company.
Pretty much "we have to pay them off so they don't fuck us". :x
And my favorite part...
Right, so if we hadn't bailed them out the contract means dick and they would have to sue AIG
Their stance is like the mafia, pay me so I don't burn down your fucking house and break your legs.
so take his approach with a grain of salt
Forcing someone to litigate to get that which is contractually obligated to them is just a flat out bad thing to do. Now if there's evidence that these contracts were either fraudulently obtained, that they were written with intent to not benefit the shareholders, or that the employees breached their contract then they well could be sued and/or have their bonuses withheld.
I don't think there's enough info in the public domain to be able to make that decision though. State of play at the moment means that AIG can't just not pay the bonuses, it would be both a slam dunk case for the employee's lawyers and a vastly dangerous precedent.
I made a game, it has penguins in it. It's pay what you like on Gumroad.
Currently Ebaying Nothing at all but I might do in the future.
Forcing someone to put up or shut up with litigation is a common practice. All I'm saying is that doing so would force them to decide how much their bonuses are worth. Obviously it would help if there was some evidence that the contracts were made in bad faith or with the express purpose of circumventing the restrictions of the bail out.
Wrong. A junta would chain them to their fucking desks and force them to work at gunpoint until they were done untangling the derivatives and other products they created.
Would anyone like to present a real argument against altering or refusing to honor these contracts? You've said it's bad, you've compared it to the howling savagery of the mob, but there's no substance here. Do you have anything to back up your arguments? Is there a reason you've chosen not to post any?
No one's suggesting we force them to litigate. We simply renege on the contracts. It's entirely reasonable, considering the severe changes in circumstances from when those contracts were written- contracts have been broken for far less. (And I'd bet dollars to donuts that a decent lawyer can find a clause somewhere in there that'd allow them to do this on decent legal footing too.) They can negotiate in good faith, or they can sue. Same deal as the UAW got, which seems pretty good considering auto workers didn't actually fuck the economy in the first place. What's good for the goose is good for the gander.
And if they'd rather walk out, maybe we take another look at the junta approach.
We understand what you are saying. Me personally, I believe they do not deserve nor should they get the bonuses but. . . to do it by just not paying them? That is a Pandoara's Box on top of a minefield in a swirling vortex of future disaster. Not only does it violate the principle of letting the guilty man go free to avoid punishing the innocent but it sets a horrible precedent for future actions by not just this administration but future administrations and private entities alike.
If there's indications of bad faith that hot damn yes, nail the mutha fuckers to the mast. Absent of that, we're shit out of luck.
I made a game, it has penguins in it. It's pay what you like on Gumroad.
Currently Ebaying Nothing at all but I might do in the future.
They left anyway AIG anyway.
It's against the law for one. They could likely just sue to recoup the bonus they were legally entitled too. If you alter the law it is going to either be unconstitutional or else it will set terrible precedents in contract law that are likely to have a lot of unintended consequences.
They will litigate if you do that.
You don't just break contracts for employee compensation due to 'changing circumstances'. Even in a liquidation, which is about the worst possible form of bad circumstances, employee compensation is at the top of the heap for repayment IIRC, though in that case retention bonuses are subject to certain provisions (though it isn't clear that even then these bonuses would have violated those provisions). And I'd imagine most of the time breaking those contracts would be actionable as well, it just isn't worth it if the company is already liquidated or insolvent. AIG has money thanks to Uncle Sam.
They already accepted stipulations going forward. Things were already renegotiated going forward as far as I know. This all is concerning a contract that has already been fulfilled by one of the parties.
You're telling me you can't see any downsides to a government arbitrarily deciding not to honour valid contracts?
See, that's what the SEC and fraud investigations are for. If anyone knows of a broker or executive planning on doing this or currently doing this they should be reported and then lap up their tears as their ass is thoroughly raped by a regulatory body that actually wants to do its job now.
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What makes you say that?
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Both American citizens and the government are so preoccupied with abiding by existing institutions that nobody knows how to think about changing them. I mean, to be perfectly honest, it makes perfect legal and contractual sense to allow these bonuses to go to the AIG employees. It even makes perfect sense to honor these contracts, less the AIG folks jump ship and leave us in an even worse predicament.
But it boggles my mind that nobody has looked at the institutional framework that allows these practices to even "make sense" in the first place and said, "Hey, there might be something wrong with this." You'd think a recession would create an excellent opportunity to do so.
Doesn't bankruptcy pretty much allow the renegotiation of contracts? Or was this cleared up somewhere else in this thread?
If anything, take all the stimulus money back, put them in debt, force them into bankruptcy, and then negate the contracts that says the tax payers have to pay these guys for ruining the economy.