AIG bonuses should be paid (Obama is punishing AIG for systemic failure created by government)

National Post ^ | 03/17/2009 | Terence Corcoran

[SeekAndFind]

To use a current cliché, frequently deployed to humiliate bankers and CEOs: He doesn’t get it. Barack Obama, that is. He just doesn’t get it, and nor do millions of others who are following the U.S. President on his long destructive march against bankers and corporate executives for their alleged “recklessness and greed.”

Those were the words Mr. Obama used yesterday when he instructed treasury secretary, Timothy Geithner, to “pursue every legal avenue” to block the payment of $165-million in bonuses to employees of AIG Financial Products. News of the payments sparked a demagogic explosion in Congress and the U.S. media, and the President seized the momentum and then got out in front of it. He loves a parade.

There’s no need to repeat here the distorted content and hysterical tone of the AIG explosion. What is worth repeating, however, are some of the facts behind the AIG bonus payments. Much has been made of AIG CEO Edward Liddy’s letter to Mr. Geithner, explaining the reasons for the bonuses. For people who like facts with their hysteria, and can calm down enough to read it, the Liddy letter appears elsewhere on this page.

Mr. Liddy had no involvement with establishing the original bonus plan, designed to “retain” AIG Financial Product specialists through 2008 and 2009. But he says he has “grave concerns about the long-term consequences of the actions we are taking” to reduce the contractual payments to AIG employees. He warns of AIG’s inability to retain the best talent. AIG, he says, will simply not be able to attract employees if they come to believe “that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.”

To use a current cliché, frequently deployed to humiliate bankers and CEOs: He doesn’t get it. Barack Obama, that is.

[Rockingham]

Evaluate the article on its merits, not simply on the venue of publication.

The scale of the subprime lending problem and resulting financial crisis developed because the pool of money available for lending was replenished through CDO’s backed by credit default swaps issued by AIG. In effect, AIG issued the subprime lenders a credit card so they could keep issuing subprime loans -- and gave large bonuses to the managers who thereby destroyed the company.

[Kansas58]

WHO mandated sub prime mortgages?
WHO invented sub prime mortgages?
WHO took lenders to court for not making enough sub prime mortgages?
Who protested at banks who did not make sub prime mortgages?

ACORN and Obama and Barney Frank and Chris Dodd, Thats WHO!

[Rockingham]

All of that is true. And the subprime folly was expanded to catastrophic proportions by issuing mortgage backed securities, with the purchasers induced by blue chip ratings and credit default swaps from AIG. And the bonuses paid to the architects of that multitrillion dollars disaster were protected due to legislation initiated by Geithener and Obama.