Gawker 
Enter your username and password.
New York, 9:42 AM
Sun Nov 29
12 posts in the last 24 hours
Tip Your Editors:
tips@gawker.com
Tipline: 646-214-8138
Editor-in-Chief:
Gabriel Snyder | Email
West Coast Editor:
Richard Rushfield | Email
Contributing Editors:
Valleywag:
Ryan Tate | Email
Media:
Hamilton Nolan | Email
Politics:
Alex Pareene | Email
Investigations:
John Cook | Email
Entertainment:
Brian Moylan | Email
Nights:
Adrian Chen | Email
Azaria Jagger | Email
Ravi Somaiya | Email
Weekends:
Foster Kamer | Email
Video Editor:
Richard Blakeley | Email
Original material is licensed under a Creative Commons License permitting non-commercial sharing with attribution.
03/18/09
I think a lot of people are missing the forest for the trees here. a) all indications over the past few weeks are that this bailout is actually working, b) this was less than 1% of the federal money AIG received, and I'm sure you could find a lot more egregious uses of the rest than this, and c) AIG is hardly the only company to receive bailout money and probably not the only one to not spend 100% of it completely wisely.
Look at it this way. You find me a government program - *any* government program - with less than 1% waste, or where certain people didn't get rich that shouldn't have. You're telling me that during the Bush years, taxpayers didn't finance the high lives of arms dealers and weapons manufacturers the world over? Where are the calls for those guys' heads? What about all the Iraqi officials who have stolen literally *billions* of reconstruction dollars given to them by American taxpayers? Why aren't we overthrowing the government that has received a far bigger bailout than anything we've given to American business?
Here's what this whole thing strikes me as. The American people (and cable news) are generally uncomfortable with the way things are right now, but the whole economy and its various machinations are just too big for them to get their heads around. So now they've found this one little thing that they can get mad about. They've been looking for anything to latch onto, and this is it.
Again, I'm not defending AIG. I just feel that all this outrage is either hypocritical or it's not real. There are many things *just like this* or even worse that people could have been outraged about over the last eight years but weren't.
03/18/09
It doesn't get any righter than this
03/18/09
03/18/09
03/18/09
03/18/09
After all, TV and broadcast radio networks benefit greatly from the same types of de-regulation applied to them as has been applied to the financial services industry.
03/18/09
03/18/09
03/18/09
03/18/09
03/18/09
Not only do we deserve to know their names, addresses, and where their children go to school, I am in favor of public show trials followed by executions. This is really the only way to go to restore any public faith in our "system," and actually fits neatly in with capitalism's legacy of blood and humiliation.
It's pathetic but not at all surprising to see people on this board protecting these guys. The slaves defend the masters!!
03/18/09
All you and your friends are doing is complicating the task of better people. Men and women of true wisdom have the strength to accomplish difficult things without petty violence and retribution.
03/18/09
Sorry Dis... looks like you put your sucker hat on this morning. We've left things in the hands of the "better people" and this is where we've ended up. Please climb down off horse and sip from the spring of reality.
03/18/09
03/18/09
03/19/09
03/18/09
03/18/09
03/18/09
03/18/09
I also don't think they're names should be released to the public. It's funny to joke about them, but you know they will at the very least receive numerous threats now. I'll go out on a limb and say some of these old white dudes who live in the suburbs probably have families as well. This is appalling. All around.
03/18/09
03/18/09
Gawker Team 7: To the boats!
03/18/09
03/18/09
-- Seymour Skinner
03/18/09
And another thing. They keep saying, oh, we have to give the bonuses to retain talent. Um, talent? You mean talent that allows you to epically FAIL. Oh yes, that makes perfect sense.
03/18/09
It's a question of what they're talented AT. They are traders - they are theoretically talented at taking positions that earn the firm money. There is, quite literally, no scenario in which that is possible, so their job at this point is to unwind credit insurance positions at losses in addition to taking other positions to help offset those losses.
Their sole remaining capability is to mitigate losses to taxpayers. Given AIG's losses compared to the size of their CDS positions - and the talent of guys like Paulson in banging those CDS's into the ground to collect the bailout money - they've done a great job. That's mostly conjecture on my part; AIG needs to substantiate this even if it's complicated instead of offering high-level explanations. But even then, it's a losing game, because the public won't understand anything but the losses.
03/18/09
03/18/09
On the other hand, there is the PR angle...it's extremely stupid for these guys to take any bonus now. They should have the wits to at least defer the bonus until 2011.
03/18/09
Because it's not a retention bonus. It's being called that because AIG was getting a shit sandwich from the media over every last expenditure. It's all semantics; at the end of the day, this is money these guys are getting for working there.
03/18/09
03/18/09
Yes, you could, but that's the PROBLEM with the whole structure of the bailout. It's keeping the heart pumping in a dead body - banks are only operating because AIG is paying off billions of dollars in "insurance" on collapsed debt securities. AIG is only operating because of Fed money. Thud, thud, thud. The whole process is basically designed to print the difference between notional money and circulating money in the banking system.
Pointing the flamethrower at the traders is ridiculous, because it proves that no one in Congress knows what they're actually doing with the bailout. This is what you asked for! These losses are inescapable, because the die was already cast. The reason we prefer this to outright insolvency is because the traders can take SOME measures to mitigate/slow loss with Federal backing. Plus, it's like spreading the peas around your plate so mom lets you stop eating - the numbers are smaller when you bail out banks through derivative positions instead of directly pouring the money in.
03/18/09
03/18/09
Can you substantiate that? Do you have the slightest clue what the system was or how is was brought down, or are you just speculating? I'm legitimately interested in how AIG was responsible for bringing down the system - perhaps you can instruct me.
03/18/09
Greed is disgusting. These men were greedy and profiting at the expense of Hundreds of thousands of people. They deserve to be punished. Period.
03/18/09
So, to parse/summarize, you're just going to vent your rage at me and there isn't anything I can do about it. If that's the case, why quote my name and start typing like you've got some kind of fucking argument that you haven't cribbed from a blog entry you half-read? Why put up the pretext of debate? Just go light your torch and sharpen your pitchfork, there's so much work to be done! After all, there are a few dozen other people in line who want to drop the names of a few Ayn Rand characters like some rhetorical bludgeon. But - and, you know, this is just reflective of how little you actually know about the superior arguments you're bastardizing - if I were at all like John Galt or Howard Roark, I wouldn't be bothering with engaging you, now would I?
03/18/09
Try again. I don't agree with Dismal on a lot of things, but he has a long record of playing fair here in the comments. He's not the droid you're looking for.
You're on a crusade, not engaging with Dismal's arguments. Jerusalem is in the other direction.
03/18/09
03/18/09
03/18/09
That's not the question! The question is whether or not the New York Post should be releasing the names of bonus recipients to the public so they can be tarred and feathered by the media. This is crossing the line.
03/18/09
03/18/09
@ADismalScience: So you feel it's good business practice to reward those that put a company into Near Meltdown status? If the government didn't give AIG money, they wouldn't have had money to give a bonus anyways. Well, that is, they wouldn't be able to give the bonus AND stay afloat.*
... Looks like there's a doubleecho in here. Tee hee.
*Apologies, Dismal. Couldn't resist. Oh, and thank you. Bloviating bastard is my new favourite insult.
03/18/09
Oh - and it's 1am here, and my sense of humour is veering towards the puerile side of the scale.
03/18/09
03/18/09
That doesn't mean that we should add to the laundry list of bad practices by voiding contracts.
03/18/09
So the question here isn't about the status of AIG's contracts with employees -- I think it's been conclusively shown here that that can't control the policy decision. More important, I think, are what AIG's and the government's understandings were when the bailout measures were approved. And to what standard those "understandings" -- reached via a rather sui generis set of negotiations -- will be held by decisionmakers (eg: judges)? These are thorny questions, and I'm not sure that either written law or precedent provide much guidance.
So if I were taking AIG's side here, I'd say that our understanding following this negotiation was that we could use bailout funds to pay our people according to procedures already in place and written down, and then make a policy argument: If the government is simply going to ignore this understanding of ours, which we contend was reached in good faith -- then why should anyone ever negotiate with the government over anything?
Of course it would help clarify matters if a written "Memorandum of Understanding" had come out of the negotiations, which any careful lawyers involved would have been extremely anxious to write. I wonder if maybe that's the real question here -- what written evidence exists of the results of the negotiations? And if no such evidence exists, why doesn't it?
03/18/09
Specific provisions of TARP indicated that bonuses negotiated previous to a specific date were validated. This populations fell under that understanding. These bonus payments were, in effect, EXPLICITLY signed off by a Congressional Democrats, who are now contorting their faces into phony outrage over payments they expressly authorized. I hope they lose this bullshit ex post facto PR game and that it blows up in all of their lying faces.
03/18/09
If I were negotiating for the government, I would think that would be an automatic condition to be agreed to before negotiations could even start.
I don't know the provisions of either agreement well enough to say for sure, however, and you might.
03/18/09
TARP set the ground rules for each distribution. The remaining negotiations were when the money would be delivered and what the terms of repayment were. Because of the immediacy and the need to treat the banks with relative equality all low-level negotiations were held between Congress and Wall Street in the construction of the bill. My understanding is that the specific agreements between the parties in the course of distribution are literally just the relevant pages of TARP with a Treasury signature next to the names of the various banks' boards. I'm not one of the lawyers though, they might have more insight.
03/18/09