a democrat program that republicans didn't fight
howard69 said:
I hate the idea of failed execs getting large bonuses, but they did with Congress writing the rule for them in the first place. As far as punishing them now, it is too late by the Constitution, Article 1. It is time these morons in Washington started reading the Constitution and abiding by it. As far as Conservative Bitches are concerned, where are they at? They sure aren't in Washington and they haven't been for a very long time. Only fucking liberals are there and have been for several decades now.
The division at AIG that failed, did so because of having to pay insurance claims (credit default swaps) from investment banking firms for losses they were incurring from changing assets from a book or face value system to "mark to market pricing". The legislation requiring this change was passed in 2007.
Until this time, assets that were not publicly traded were carried on the banks and investment banks books at face value. Since they were not publicly traded, there was no viable market. Because of this transition to mark to market pricing standards, without a market, these assest were now priced at a fraction of face value.
Now AIG had to go to their other departments and say, "We have a problem. We are going to have to sell everything you're managing and close your department. We would like for you to stay here and do your very best to get as much as you can for the assets you manage."
They developed an incentive program for these employees to try to get as much as possible for the assets. Remember, these are not the people who managed the assets in trouble. These people were doing a great job: a job they are now going to lose because everything they're managing is now being liquidated.
The arrangement was made in Sep 2007 before the government agreed to provide 24 month bridge loans to AIG. Congress, the Senate, the Federal Reserve Bank, Dept of Treasury all knew this was in place before they agreed to the loan deal. (We do not own 80% of AIG. We are a creditor of AIG. More misinformation) You've seen some of them like Dodd, and Geithner on the hot seat over the past few days for lying about it when irrefutable truth has been made public that they did know.
Back to the folks at AIG losing their jobs. The worked their asses off and saved AIG BILLIONS. The bonuses are based on how much they saved the company. If you think the 180 billion we loaned AIG so far is bad, it's a drop in the bucket compared the what it would have been without these people.
Now, a year and a half later, they exceeded expectations. The portfolio they managed is gone, their job is gone, and a bunch of liars in public office supported by a populace fueled by press misinformation are all in favor of cheating these people out of their payment for a legal contract after they did the work.
These are not the people who caused the problem. They're being blamed and paying for what someone else did. It was CONGRESS, CONGRESS, CONGRESS.
Finally, you are correct about this new legislation passed the other day to "claw back" these bonuses. It is unconstitutional. It's also very dangerous when congress passes legislation designed to attack certain individuals. You also can't write a new law designed to go back in time and penalize someone criminally or civilly for something that was not illegal at the time they did it.