Some bank executives warned yesterday that the government is forcing them toward a disastrous choice between accepting restrictions on compensation that could cripple their ability to compete with rivals, or returning billions in federal aid, which could retard lending and damage the economy.
The possibility of a newly weakened banking industry also raised concerns among businesses in the wider economy that already are struggling to find financial firms willing to lend them needed money.
“We’re all going to lose on this thing,” said an executive at a large bank that took federal aid. He and other bankers expressed shock at the rapid progress of legislation that could impose large pay cuts on thousands of workers, and dismay that the industry is at the mercy of an angry Congress.
You should never have taken the money, buddies.
They own you now. And they can, by the power of the IRS, backed by the full force and might of the State, steal every cent they wish from your employees.
All of it. Or — if you’re lucky — 90% of it.
They can take what they like, when they like, as they like.
Good luck.
And good luck to all of us. Because one day, we too can be deemed to have too much by the State, and we too can have 90% of whatever bonus we earned and were contractually obligated to taken from us by a single swipe and vote of Congress.
After all — money and things aren’t really the individuals. They’re the States, to do with as the State pleases.
Hi Sarah,
I agree with you about 99% of the time, but on this one, I disagree. If the bonus money was from profits made by the companies, I would be with you. The “bonus” money is from taxpayer funded bailouts. They made no profits. I have zero problem with the government recouping ill spent bailout money from folks that ran these companies (and the rest of the economy) into the ground.
The bailouts should never have happened. These guys should have gone through bankruptcy. The bailouts were offered and accepted. Now, they have to dance with the ones what brung ’em. This nationalization is bad…it would be worse if these pigs end up “more equal” than the other pigs (to coin from Orwell). Personally, I think they should have gone through bankruptcy and then we would see if their “talents” were worth anything to anyone else. I think they would find that they are not worth much.
My grandkids have been put in slavery to bailout these guys, so cry me a river when the IRS takes their most recent taxpayer paid for bonuses.
Like I said in an earlier post on another thread…if we are going to go socialist, we should go the full route and follow the examples of history on what should happen to folks that so wrecklessly destroyed the free market. Heck…most of these clowns paid for the current democrat regime. The limo-libs are getting what they bought and paid for.
Well the problem is that the Congress approved the payments and now has buyer’s remorse. In addition the Constitution, you know that thing we ignore when it gets in the way, prohibits the impairment of contracts, bills of attainder as well as ex post facto laws. Now while this can all get complicated and nuanced, the fact that these bonuses were specificaly authorized by Congress probably means that constitutionaly we are stuck with them.
At least the lawyers will make money in the forthcoming litigation.
RE: “I have zero problem with the government recouping ill spent bailout money from folks that ran these companies (and the rest of the economy) into the ground.”
Setting aside the moral implications of 1) the government violating the very terms that they voted on via Congress for the bailout — contractual terms that were in the bill which they approved overwhelmingly and which allowed those bonuses, and 2) the government using its power to target one teensy class of taxpaying citizens to take away their money — to [i]take it away [/i], using the power of the State, and 3) voting one way one month and two months later taking away what they voted on previously in self-righteous, blustering huffs of outrage . . . setting aside those moral implications because, as I pointed out, money and other properties are the State’s, not the individuals, and so we no longer need to be concerned about trivial little details like contracts and bills that were approved by the Senate and the House that purport to “guarantee” things . . .there are some minor logistical and practical details as well.
1) Compensation contracts that include retention payments allow companies to . . . well, you know . . . [i]retain[/i] employees that the corporation needs to retain. The skill sets that these people have are pretty rare — not *important* necessarily, except to the life of the company that enacts retention bonuses — but *rare*, which is why the corporation wishes to [i]retain[/i] these employees.
2) The remaining top officials — the ones we all blame for the mess [the other top officials are gone] — agreed not to take their bonuses back in November.
3) Here I quote from the excellent and informative piece by the Washington Post earlier this week: [blockquote]”Beginning in the first quarter of 2008, AIG disclosed the plan to offer retention awards at Financial Products. The unit had already begun to hemorrhage money, a problem that would later grow exponentially. The unit’s executives, fearing they might lose valuable employees in the tumultuous months to come, successfully negotiated more than $400 million for their workers, to be paid this month and again next year. [/blockquote]
The bonuses were for employees at a particularly troubled unit that the company was desperate not to lose.
4) [blockquote]”The senior executives whose decisions caused the company’s collapse are long gone. Most of those left behind are trying to unwind complicated derivative contracts. Completing that process correctly is essential to preserving as much value as possible for taxpayers, officials at both the government and AIG have argued. If it is mishandled, it could expose taxpayers to billions of dollars in additional losses.[/blockquote]
Now, I’d be more than happy to let AIG fail. More than happy. Nothing’s “too big to fail” in a free market.
But the State, in its wisdom, decided that they would give AIG lots of taxpayer money, and try to salvage AIG. As part of that salvaging, one must keep employees that actually know how to do what needs to be done at AIG.
But no.
Not only did they trample over their own voted-upon decisions and in short, lie to people, and not only did they choose to steal people’s lawfully-earned money by yet another hasty vote after they didn’t read the first stupid bailout . . . but now they get to watch the spectacle of people at AIG doing precisely what they have been encouraged to do by the State taking away their retention money.
[i]And that’s walk the hell away from this fiasco.[/i]
Good times, Senate and House.
Keep up the great work, Noble Senators and Representatives. Violate contracts, lie, steal, violate your promises because you didn’t even read them, vacillate, do it all — and you still lose.
As to the banks that took TARP money . . . [i]suckers[/i]. No excellent leader in his or her right mind is going to want to serve or lead a bank that is now owned by Our Illustrious Senators and Representatives lying, stealing, flip-flopping their voted-upon decisions, and otherwise stumbling drunkenly through their day making buffoonish decisions about compensation, retention, and any number of other corporate matters.
So the natural decisions will be made.
Excellent leaders in their right minds will veer away to other non-owned-by-the-State banks . . . and the result is a predictable further auguring into the ground of banks that neeeded to die anyway.
But . . . not before we spend kajillions more.
It bothers me that Congress seems to respond to problems created by acting in haste with “solutions” arrived at in even greater haste and with disregard for the rule of law. The bonuses disgust me as much as anyone – but that doesn’t make Congress’ efforts to take them away right either. How about sitting still a little while and giving some thought to what you’re doing, “Law”makers?
Since the captains of capitalism got us into this mess and pleaded for funds to bail them out not for purposes of strengthening the economy but to reward themselves for their short-sighted greed and overall avariciousness, I can’t take very seriously their whine that if they can’t pocket their bonuses, the rest of us will sink. On the other hand, hearing politicians, especially Republicans, screaming in outrage about what their own actions have led to is more than I can take with having to suppress my nausea.
Sarah, you really shouldn’t hold back. Tell us what you really think! But I think you are right. Politicaly these bonuses shouldn’t have been approved. But the government (the Democrats over Republcan objections, (Dodd in particular at the Obama administration’s request, by their own admission) did it. The government gave its word and, now they they are getting their back ends tosted, they want to shift positions, and that’s the only reason.
AIG should be placed in receivership and, in the absence of politics, either rehabilitated or liquidated. Not that politicians would ever seek to interfere with a court apointed receiver.
Dan, I don’t see that there’s much to choose between Republicans and Democrats in this mess.
I agree with Sarah. It is a gross overreach of the government, political grandstanding of the worst sort, and to me scary as hell that Congress can identify one group of people to retroactively take their money from.
I love the move from “performance” bonuses to “retention” bonuses. It is a free market economy. What successful firm is going to be chasing down hordes of employees at another firm that has been run into the ground? Will there be cherry picking? Absolutely. Will the “good” people want to work where they can be paid the most? They better. But there are few places for these “necessary” employees to go and be compensated as they are, let alone at the bonus levels. I have no problem with eliminating at all when they are taking our money to survive, though I don’t think it will be upheld by the courts. Quit borrowing and start paying back, then we can talk about restoration of some “retention” or “performance” bonuses.
RE: “Since the captains of capitalism got us into this mess . . . ”
Which ones? Where? The ones that had their contractually obligated bonuses taken away from them by the collectivists in Congress? Those guys?
RE: “. . . and pleaded for funds to bail them out not for purposes of strengthening the economy but to reward themselves for their short-sighted greed and overall avariciousness” . . .
Which ones? Where? Who? The ones who had their contractually obligated bonuses taken away from them by the collectivists in Congress? Those guys>
[i]You don’t even know their names[/i], Dan Crawford.
All you know is that you hate “people who work at AIG, whoever they are” and any other “capitalists” that have gained your attention and ire, and wish to [i]take away their money from them[/i], and if you can’t, then by jingo let The Dear State and The Dear Leaders do it for you.
Sweet.
RE: “I can’t take very seriously their whine . . .”
Sure you can’t. I don’t take very seriously your statements either, but neither of us care about that either.
RE: “. . . that if they can’t pocket their bonuses, the rest of us will sink.”
Who said that? Where? When? Nobody will “sink.”
Congress will continue to lie and steal. And you’re fine with that, I understand.
And good people will continue to leave places like AIG, which are owned by the State that you so admire, because, you know, they’re owned by the State which is made up of people so respected and admired by Dan Crawford because they’re going to really stick it to those Smelly Capitalists who have that money that Dan Crawford wishes could be taken away from them. Coolio!
Nobody will sink.
Natural consequences will continue to play out.
Those natural consequences were scrupulously described above, and Dan Crawford responds with his class envy and bitterness.
RE: “But there are few places for these “necessary†employees to go and be compensated as they are, let alone at the bonus levels.”
That would be, er, incorrect. There are positively scads of salivating high-performance companies out there writing articles and sending e-alerts on how exciting it is that there are folks leaving or preparing to leave the bailout companies and banks to enter their companies. I receive those across my computer at a client’s office constantly.
RE: “I love the move from “performance†bonuses to “retention†bonuses.”
There is no “move.” Do you not know what those are, Manna?
Those are statements put into employment contracts that say something like this: “in the event that you should hit certain performance objectives over the coming year, we will pay you xyz in compensation in return for your not taking xyz right this very minute.”
Because . . . you know . . . they wish to [i]retain[/i] those employees who hit certain performance objectives while not risking the money at the time of the contract signing.
But good news, folks. Those employees who hit certain performance objectives laid out over a year ago, have now had that taken away from by the likes of folks like Dan Crawford, only with the power that Dan Crawford does not have.
So — they can go elsewhere, leaving [drum roll] . . . [i]those people who did not hit certain performance objectives[/i] to continue to work at AIG.
But hey.
The Capitalist Pigs really got it socked to them, huh? And that’s what’s really important.
Who cares about signed-off-on agreements by Congress? What’s really important is that those snooty high-performing employees at AIG who hit certain targets got that money taken away from them. Maybe the State could then turn around and give it to Manna and Dan Crawford and others like them.
Or maybe Good Deserving Non-Capitalists could just get a list of the names of the people who received all that money, which is really the State’s money anyway, and we Comrades could then lie in wait for them at the subway entrances and stairs and just hold them up for it and pocket the money to share with our loved ones.
“identify one group of people”
Isn’t that what the entire IRS code is all about? I don’t get to deduct my vehicle expenses for my daily commute, yet if I were a business the entire cost would be a deduction. I don’t get to depreciate my house…in fact; I pay ever-increasing taxes on it. If you guys are just now figuring out that the IRS is about controlling behavior and not about generating revenue, may I gently suggest that you have arrived late to the party? The entire code segregates us all by what we do, if we are married, if we have kids, if we are students, if we are farmers, if we are landlords, etc.
Give me a flat tax or return us to a pre-income tax revenue stream! Until then, the system is what it is. It discriminates against married people. Where is the outrage? It redistributes money from those of us that are productive and gives it to those who are less productive or not productive at all. How can someone NOT paying taxes get a REBATE? How about tax “credits†that exceed what one pays in taxes?
And let’s not even discuss social security.
As for the executives bonuses; they will still be paid as contractually agreed. And then, they will be taxed. If my overtime can be taxed at a higher rate, then their taxpayer paid bonuses can be taxed at a higher rate. The fact that those bonuses were paid for from my taxes and taxes on my kids and grandkids future earnings leaves me with no sympathy for the executives that get a bonus whether the company makes a profit or not. If the money was from their profits, fine. But it isn’t. It is from my taxes. I say let them go bankrupt. If they don’t like their jobs…leave!
That is what the average American has been hearing for the last 15 years, while real wages declined. The financial sector folks are completely out of touch with reality. Inflation has been constantly eroding the average worker’s purchasing power while theirs have been increasing exponentially. Their compensation is not based on any real matrix of value. They get a bonus when the company goes bankrupt? The SEC should be prosecuting the collective boards of directors for criminal negligence or fraud because they handed out such bonuses. The boards of directors have a fiduciary responsibility to the shareholders to ensure that their interests are protected. Giving bonuses to folks that run the company into bankruptcy hardly qualifies as “due diligence†in protecting the shareholders.
No one has been safe from the IRS for a long long time. Folks that have been living a sheltered existance from the IRS and the downside of globalization…welcome to our world.
By the way, much of Wall Street financed the Obamanation/Democrats. The chickens are coming home to roost.
RE: “If you guys are just now figuring out that the IRS is about controlling behavior and not about generating revenue . . . ”
Um, yes indeed — and this is but one more step along the path of that, Sick and Tired. Who says that “because they’ve done this in larger segments before” it’s a good thing to now do it in ever smaller segments? Not I.
RE: “As for the executives bonuses; they will still be paid as contractually agreed. And then, they will be taxed.”
Right. In violation of our laws and the Constitution, that money will be stolen from them.
So far, none of what you have said is inconsistent with what I said. I’m merely pointing out the sheer evil, deceit, Statism, and contractual violations specifically for [i]this incident[/i] right now. But you’re okay with the sheer evil, deceit, Statism, and contractual violations for this segment of citizens, because . . . well . . . you don’t like them.
RE: “By the way, much of Wall Street financed the Obamanation/Democrats.”
Um. The local bank in SC that accepted TARP funds isn’t “Wall Street,” Sick and Tired.
But it doesn’t matter.
We’re all “Capitalist Pigs” now, Comrades.
No, it isn’t because “I don’t like them”. It is because their “bonuses” are coming from my taxes.
And here are a bunch of reminders about the Wall Street folks supporting the Obamanation that we all have to live with now:
[b]Clinton, Obama are Wall Street darlings[/b]
http://articles.latimes.com/2008/mar/21/nation/na-wallstdems21
[b]Workers at Top Wall Street Firms Give Millions More to Dems[/b]
http://www.businessandmedia.org/articles/2008/20081031114947.aspx
So, like I said…the chickens are coming home to roost.
[b]Companies Shift More Donations To Democrats[/b]
http://online.wsj.com/public/article_print/SB117790069010286617-Xz4XikFqFlSwWSokkpgptCULmoo_20080428.html
RE: “It is because their “bonuses†are coming from my taxes.”
Right — and as you’ve made clear, the fact that their bonus was [i]guaranteed by law specifically in the Stimulus package[/i] — not to mention that their bonus was [i]guaranteed contractually over a year ago[/i] — makes no difference to you. Violating oaths, lying, stealing, contracts — those are all trifling details for Sick and Tired. Mere bagatelles that must decline in service of The Larger Cause.
Your links about Democrats are red herrings and completely irelevant to local banks being told how to compensate and retain employees.
I’m sorry you’re so angry at Democrats.
But the chickens coming home to roost, Sick and Tired, are just now starting for people like you who don’t mind Congress’s gross and corrupt lack of integrity in this matter.
You’ll see many more “chickens coming home to roost” for your support of their thievery, law-breaking, and contract-breaking.
For of course, all of this will spread far far far more broadly and deeply.
Never fear — I’ll be here to remind you of your support for contract breaking, and stealing, and law-breaking because you’re oddly mad at “Democrats on Wall Street who supported Obama” which again, is completely irrelevant to anything at all that we’re talking about here on this thread . . . other than that you strongly and gleefully and rather inconsistently support the very Democrats and Obama and the Republicans who have enacted this grotesque corruption of power.
By the way, the Orwellian “pigs” that that I referred to that were “more equal than the other pigs” were not capitalists, they were socialists. Socialists…you know, they gave money to the socialist…er…Demcrat party and are getting paid bonuses from money that all the rest of us earned because our taxes, not their profits, are paying for the bonuses.
See ya in the soup lines. We will be fortunate if the Republic survives.
“Violating oaths, lying, stealing, contracts—those are all trifling details for Sick and Tired.”
Sarah, quit being so angry and educate me. What oath breaking am I supporting? What lying am I supporting? What stealing am I supporting? What contract breaking am I supporting?
Those are pretty strong charges. I am willing to be educated. Show me my faults and I will bless God for your sake.
See above clearly detailed comments, Sick and Tired. I have no desire to repeat what’s already clear.
Meanwhile, it wasn’t just Wall Street that supported the Democrats.
[blockquote]The Republicans have alienated whole professions. Lawyers now donate to the Democratic Party over the Republican Party at 4-to-1 rates. With doctors, it’s 2-to-1. With tech executives, it’s 5-to-1. With investment bankers, it’s 2-to-1. It took talent for Republicans to lose the banking community.[/blockquote]
http://www.nytimes.com/2008/10/10/opinion/10brooks.html?_r=1
Yep, the Doctors that are worried about the wholesale socialization of medicine donated 2 to 1 for liberals over conservatives. Investment bankers crying about their taxpayer paid bonuses being taxed (taken back) donated 2 to 1 for liberals over conservatives.
Meanwhile, I have voted against my own economic interests almost my entire life in support of the Republicans, because they were allegedly socially conservative. Then, for the past 8 years I got to watch them morph into Republicrats. I have to tell you, I am real tired of that game.
Sarah,
The first mention of “oaths” is in your comment #16. You don’t specify any particular oaths, so I cannot see your “clearly detailed comments” above.
In comment #4 you made the allegation about our “Illustrious Senators and Representatives lying” without any specifics. I don’t dispute that some or all of them have lied, but where am I supporting anyone lying? I don’t.
The same holds true for stealing. All taxation uses the coercive power of government force, yet it is lawful. I am not in favor of an income tax. Yet, since we are under this burden, I see no problem with recovering some of my tax money from others that should not have received it. This is what the bonuses are in companies that received government bailouts. The recovery of that money, after the contract has been fulfilled and it has been paid, is not stealing. It is lawful taxation.
If the bonuses in question are contractually obligated, then they must be paid. I do not favor breaking contracts.
#12 Sarah — regarding the retention bonus and needing these “rare” employees. Are there really that many companies looking to hire employees that ran a company that is “too big to fail” into the ground — and incidentally taking a big chunk of the world’s economy with it? If so, let them have hire them. And I’d like to offer my services to ruin any financial services company for half of their current salary — and bonus free!
My point would be: this level of compensation was scandalous when the contracts were signed in the “good years”; was scandalous when the Congress and Treasury Dept approved the bailout; and is scandalous now that AIG and other financial instituions are paying out these payment.s Just because they are “allowed” to doesn’t mean that the “should”. IMO
My only problem with the whole brouhaha is Congress changing the rules after the fact. I would think it could be argued in the courts a contract has essentially been established at the time of transfer. It would not be legal for one side of the contract to alter the terms after the fact without the other side agreeing. Of course I also feel the banks are not necessarily honoring their end of the deal since they don’t appear to be using the money for it’s stated purpose. Now if Congress wishes to impose new restrictions on future contracts, that’s completely up to them and the banks can accept or decline as they so desire. As for the banks so willing to return the money, I guess you really didn’t need it in the first place, huh?
As for the “outrage” of the AIG bonuses….pullease! Worrying about that $165 million when the government has invested more than $200 billion (with more to come) in more than 500 financial firms, is a lot like worrying about a cup of water when a huge wave is coming right at you.
RE: “If the bonuses in question are contractually obligated, then they must be paid.”
Too late, Sick and Tired. Have you not read any of the news articles that Kendall has posted? The bonuses were CONTRACTUALLY OBLIGATED ONE YEAR AGO BY THE COMPANY IN QUESTION. FURTHERMORE THEY WERE AGREED TO BY LAW INSERTED SPECIFICALLY INTO THE STIMULUS PACKAGE WHICH WAS VOTED UPON BY OUR SENATORS AND REPRESENTATIVES.
But I repeat myself, only louder, so I doubt this time around it will help matters any more.
Regarding your irrelevant facts about doctors and lawyers — now added to the Wall Street canards — I completely agree with you that those who voted for the current liberals are bad bad bad. How strange, then, that you’re agreeing wholeheartedly with these same liberals’ actions in regards to AIG.
RE: “Are there really that many companies looking to hire employees that ran a company that is “too big to fail†into the ground . . . ”
It appears that you also haven’t read the comments since this was addressed — again clearly — above. These people didn’t run a company “into the ground” — they’re the ones left cleaning up the mess after 1) many of the top level executives left and 2) the remaining top level executives agreed not to receive bonuses. See above comments that explain — but I suppose it won’t matter.
And . . . the answer to your question is yes, again. Because well-run businesses are fully aware that the folks receiving the retention bonuses aren’t at all to blame for AIG’s issues nor the State’s buying out AIG.
Easy answer…give back the bailout money, then the bonuses become moot as far as the taxpayer is concerned. They can get their bonuses from the corporate profits they earned rather than from my forced contributions to the IRS.
I guess we will have to agree to disagree. I still think you are tops and usually agree with you, but we don’t seem to be getting any closer to consensus. God bless.
#23, “Of course I also feel the banks are not necessarily honoring their end of the deal since they don’t appear to be using the money for it’s stated purpose.”
That simply is not true. First, the bonuses were specifically approved by Congress and the Administration (see Chris Dodd’s initial lie and finally admission that the bonuses were approved in the package). Second, the money given to other banks, including foreign banks, was to specifically pay for the credit default swaps that AIG underwrote and owed, when defaults occurred – much (if not most) of the CDS’s were sold to foreign banks. So, AIG, as the credit insurer against defaults, has no choice under its policies but to pay the claims being made, pursuant to its policies, even to foreign banks.
There is really only one question about the insurance policies against these defaults – some of these policies were taken out by speculators in CDSs, who do not own the CDSs themselves. So they actually have no insurable interests in the CDSs and their policies, therefore, may not have any validity. Surprisingly to me, as an attorney, the government nor AIG’s counsel have investigated how many of the claims being made against these AIG CDS policies are being made by entities with no insurable interest in what is being insured. I have seen an article today estimating that 1/2 of the claims may be from speculators with no insurable interest, which claims can be denied, if proper investigation is accomplished. Hope this begins to happen. The speculators could stand to lose money and may deserve to. But that would not hurt the economy or our governmental structures near as badly as what is going on now. It’s like right now, we are all supposed to be on the same team, but we are losing so we have fallen to blaming each other for the losses that are occurring.
Uh, the money given to AIG has somewhat gone to pay the banks that purchased the CDSs from AIG. I don’t think the banks themselves received money directly from the gov’t to pay off their CDSs since few if any banks issued the swaps. They are an insurance product issued by insurance companies and/or bundled as securities by the big investment houses. The money the “banks” received was to shore up balance sheets and create the possibility of credit loosening again, which I can tell you from bitter personal experience the torque wrench is reading 190 lbs now instead of 200.
To bring this home, what Congress is attempting to do (illegally, of course) would be the same as if they decide to pass a law that says everyone who has deducted the interest on their mortgage loan (which was legal – up until they decided they didn’t like it) will now be penalized 90% of their income for the next 2 years to make up for having taken a previously authorized deduction. Putting the bailout aside, the facts are clear. The bonuses were disclosed, blessed and authorized by the Dodd amendment.
My hope is that every politician who voted for any of these bailouts or the pork-laden stimulus has that tattooed on every campaign bumper sticker in the upcoming elections. Dems, Pubs or Independents. It’s time to clean house of anyone who participated, people. The independent party is looking good.
#28
Your analogy fails to take into account that only folks that are bankrupt and have received taxpayer money to pay their mortgages are losing their tax deduction. The rest of the folks that are paying their own mortgages, rather than being bailed out, still get their tax deduction.
#27, you and I are saying the same thing about to whom the money from the gov’t went – it went to AIG who paid out insurance benefits for credit insurance to pay off the foreign banks and others when loan defaults occurred. My point was that this is what AIG had contracted to do and this is what the TARP money was provided for – to pay claims for which AIG did not have the money. It just so happened that the claims were coming from financial institutions and were in such large amounts that if the claims were not paid, the financial institutions would fail and the economy would fail, when its backbone (credit and banks) went out of business. So in a nutshell, why are Congress and other people so upset with AIG for paying money to foreign banks, when that is what the TARP money was given AIG to do?
Sick & Tired #29 – what you have failed to address is Jackie’s point that if Congress can do this to those receiving tax money, they can do it to those not receiving tax money for that specific purpose. In other words, they do it because they CAN, whether it’s legal or not (the power to tax is the power to destroy). And by stoking the mob mentality, the “us vs. them” mind-set, if Congress decides that they will tax those over any amount at 90%, they will do it – and in this case, it’s especially egregious because they KNEW (or should have known) that these bonus payments were part of the stimulus bill THEY passed – so this faux outrage is particularly irritating.
So I ask, how come (that’s Southern for “why”) Congress doesn’t pass bills at 90% to tax the outrageous salaries of athletes who are playing in taxpayer funded stadiums? Or television newscasters (especially Chris Matthews – a tingle up his leg is all he needs, apparently) or other entertainers, who are using the public airwaves for their employment? Why doesn’t Barney Frank want to hold their income to a max of $500,000? Or let’s put a real measurement on the actual income of Congresspersons for all they receive, in addition to their salaries – Nancy Pelosi has a lot of ‘splaining to do, if we just charged her plane to her as income – like the dining rooms, medical care, Harry Reid’s limo, travel expenses for “fact-finding trips.” The stench of the hypocrisy in the halls of Congress is overwhelming.
#31
Congress can and has already been doing it to anyone and everyone they choose. For instance; the current system lets folks like Warren Buffet pay less taxes than his secretary.
http://www.timesonline.co.uk/tol/money/tax/article1996735.ece
On the other end of the spectrum, I worked for years at low income jobs and paid taxes while others who didn’t work received housing assistance, food stamps, utilities assistance, a cash stipend, and healthcare.
So folks like me have HAD IT! Folks at the top get to use loopholes to avoid taxation (Fifty-two Thousand US citizen owned Swiss bank accounts are under suspicion by the US Government and UBS is being sued as part of a tax avoidance investigation.) and at the same time they force those of us that are working to pay for those that are not. One or two folks doing this sort of thing would be exceptions. Tens of thousands of folks doing this sort of thing are a trend. And then…there is social security.
Everybody Knows – Don Henley
Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That’s how it goes
Everybody knows
So Sick & Tired – this kind of class warfare will make a difference? http://www.nytimes.com/2009/03/20/nyregion/20siege.html?_r=1&hp;from the New York Times story:
If anyone has a problem with the U.S. tax code or legislation passed, like the stimulus bill, take it up with Congress – don’t harass private citizens – this is crazy.
And also from the article http://www.nytimes.com/2009/03/20/nyregion/20siege.html?pagewanted=2&_r=1&hp;-
This is dangerous stuff.
Weird. I agree with Sarah. This must be some kind of strange equinox phenomenon 🙂
Maybe Congress should not have agreed to back a giant dump truck of money up to the front door of AIG. Maybe they should have made it a condition of accepting the money that nobody would get bonuses, if they were going to have such a hizzy fit about it.
But that’s not what they did. They voted to give AIG the money, and they explicitly wrote into the terms that these bonuses could be paid. Then, when the public went ballistic over it, Congress switched positions fast enough to give someone whiplash if they weren’t careful, and announced in loud, stentorian tones, “How dare you, AIG, do this thing that you were contractually obligated to do and which we explicitly told you that you could do! Here, take a 90% tax rate, that’ll learn ya’!”
Now, do I think that these guys are getting paid excessive amounts of money? I do. I also happen to think it’s ludicrous that athletes get paid millions of dollars to play sports. But you know what? We don’t live in a system where everyone’s salary is subject to public consensus on what is “too much.” Heck, I get paid pretty genorously to type into a computer (as the old joke goes, the trick is knowing what to type) and I would rather not put my salary up for public debate on whether or not it’s “fair.” And if we let the Global South vote, then I bet we’d find out that pretty much everyone in the U.S. is grossly overpaid. So frankly, I’m just as happy that I don’t have to convince anyone except my employer that I’m worth what I’m getting.
I’m not ready to play the violin for the AIG execs, but Congress mishandled this and now they are trying to make matters worse. They frankly scare me. Where is the check on these idiots?
So, is this what everyone wants? From a National Review blog (Jim Gerahty):
I personally don’t think people on Wall Street are the “best and the brightest” – knowing several of them, I think they are well educated (that doesn’t mean “smart” – it just means mostly Ivy League – not the same thing), well connected, high-powered invested individuals who right now are caught up in circumstances, some of which they helped create, but most of which are not under their control. I never thought as a country we would countenance the type of demagoguery I have heard coming from Congress and others. I know we’ve had some of this in the past, but it disturbs me that we can so quickly lose sight of the rule of law and become a mob.
Wierd. I agree with Ross.
But Branford, demogoguery is a stapple. Both parties use it. Now I happen to think that the Democrats have the practice down to a fine art, but the fact is that BOTH parties do it and it is not attractive.
Now I happen to think that AIG is insolvent and should be placed into recievership. In that case the employes would have a claim for their bonuses in the recievership, but threats against these employees and their families is over the line.
You are right, Br. Michael, both sides do practice demagoguery. It’s just that this seems to be quickly moving outside politics as usual and becoming something unstoppable. And I agree with Ross, too 🙂
Well said, Ross. It’s kind of a relief to me to see so many of you reacting this way. What an alarming week it’s been.
I am not advocating class warfare, so quit putting words in my mouth. I agree with getting my tax dollars back from taxpayer paid bonuses that should never have been paid in the first place to folks in companies that should never have been bailed out. That’s it. I’ll spell out the P E R I O D. If the bonuses were from company profits, then I have no problem with them…but they were from taxpayer money. That, I have a problem with. Yes, congress blew it. They should never have passed the bailouts. I wrote and called, but to no avail. The fix was in. If we can get any of that tax money back, it means that we all owe that much less.
If it were up to me, AIG et al would be in bankruptcy. No bailouts. Then again, if it were up to me, we would be on a gold and silver standard and the Federal Reserve would no longer be printing notes. If it were up to me, NAFTA and GATT would no longer be the law and H1b workers would be packing their bags. If it were up to me, we would have control of our borders.
This stuff ain’t up to me. All I can do is vote and write letters and make phone calls. This country has been on a downward slide since I was born. They took prayer out of the schools that year. Ten years later, they made abortion on demand the law. We also went off the gold standard about that time and then we had the oil embargo and stagflation.
The only politician that seemed to get anything right was Reagan, and he let the congress run up the deficit. Of course, I think it was worth it, because we managed to out spend the Soviets and caused them to collapse.
Now, over half my fellow citizens have gone mad and voted for a junior senator with only two years in the senate and an ability to read a teleprompter. The folks that financed this new messiah and our Obamanation are the same folks at AIG that got the bailout money and these ridiculous bonuses.
So, that’s my soap box. All done. The senate won’t pass what the congress passed anyway. The fix is in.
Sarah,
You say to me: “How strange, then, that you’re agreeing wholeheartedly with these same liberals’ actions in regards to AIG. ”
This, when I agree that we should get back some of the tax money used to bail out AIG. Yet you seem to agree wholeheartedly with those liberals’ actions in regard to AIG before they reveresed themselves on the bonuses. Are the liberals’ actions in regard to AIG OK as long as the bonuses remain?
I don’t think any taxpayer money should have gone to AIG at all. I think it is good that the congress is hearing the public outcry about this and responding/representing the people and are attempting to get some of that tax money back. You seem angry about that. You seem to be happier if AIG get’s to keep all the tax money that the congress threw at them.
Any company that took the bailout money should either give it back or kowtow to their political masters.
For those who argue “They shouldn’t have taken the bailout money in the first place” — they didn’t have a choice. Ask Wells-Fargo, Bank of America and Morgan Stanley. They didn’t want the money in the first place, and told the Fed they could raise private capital on their own! But the bank directors were put in a room where Fed chief Paulson told them that if they didn’t accept the terms and the money, they would not be allowed FDIC protection,and certainly wouldn’t be allowed any money should they need it later.
The UK Guardian reports it this way:
[blockquote]Paulson, who was flanked on one side of the table by Fed chief Ben Bernanke and Sheila Bair, head of the Federal Deposit Insurance Corp, the body that guarantees customers’ money held at US banks.
Facing them, on the other side of the table, were the CEOs of the nation’s biggest banks, arranged in alphabetical order by bank. The decision to arrange the executives from A – Z was fortuitous, as it placed Citigroup’s Vikram Pandit and Wells Fargo’s Richard Kovacevich, fresh from their bad-tempered tussle over the carcass of Wachovia, at opposite ends of the table.
The bankers had been ordered to show up at the meeting, but were given no details in advance. And, expecting uproar over the plan, government officials secretly planned to break off the first meeting, giving CEOs time to vent, talk to their boards, clear their heads, and reconvene at 6:30 p.m.
Wells Fargo’s Kovacevich was, according to the WSJ, the most animated: Why was this necessary? he asked. Why did the government need to buy stakes in these banks?
Paulson, who yesterday made clear his own distaste for the bail-out plan, told the Wells Fargo chief and his fellow bank bosses that it was for their own good, and the good of the country. If they didn’t sign up now only to find they needed cash further down the road, they would not find the government so “generous” second time round, he warned.
Around the table were some of America’s best dealmakers. But there was no negotiation. As the first meeting drew to a close, each bank boss was handed a term sheet detailing the scheme, including the new restrictions on executive pay and dividend policies.
The meeting ended at about 4pm and by 6.30pm all the sheets had been signed. No second meeting was held.[/blockquote]
I believe that Wells-Fargo has paid all their money back, with interest!
Jim Elliott
Florida
Jim, that leads to another problem and that is the practice of “strings” on government money. The problem is that it allows the federal government to do indirectly what they can’t do directly under the constitution. And if they can force you to take the money, well then …
Heh.
Returned to this thread after a very lovely day.
RE: “Weird. I agree with Sarah. This must be some kind of strange equinox phenomenon . . . ”
I have decided that I must reconsider my position now that I know that Ross agrees with me.
; > )
RE: “George Stephanopoulos reports via Twitter that AIG’s top three financial-products executives and several other officials resigned yesterday, giving the reason “fear for safety.â€
Yep.
Like I said. These folks can go elsewhere — they don’t need the hassle of this.
I quote from above comments:
[blockquote] . . . now they get to watch the spectacle of people at AIG doing precisely what they have been encouraged to do by the State taking away their retention money.
And that’s walk the hell away from this fiasco.[/blockquote]
[blockquote]So—they can go elsewhere, leaving [drum roll] . . . those people who did not hit certain performance objectives to continue to work at AIG.[/blockquote]
Sick & Tired . . . I see you still didn’t read my comments. Simply didn’t read them. Exhibit five or six . . .
RE: “Yet you seem to agree wholeheartedly with those liberals’ actions in regard to AIG before they reveresed themselves on the bonuses.”
I quote from my comments:
[blockquote]You should never have taken the money, buddies.[/blockquote]
[blockquote]Now, I’d be more than happy to let AIG fail. More than happy. Nothing’s “too big to fail†in a free market.
But the State, in its wisdom, decided that they would give AIG lots of taxpayer money, and try to salvage AIG. As part of that salvaging, one must keep employees that actually know how to do what needs to be done at AIG.[/blockquote]
On another note — S&T;, I enjoy your comments often as well. No hard feelings at all. Just because I’m literally nauseous over the gross abuse of power and corruption that this debacle has demonstrated doesn’t mean I’m upset with anyone here personally. I’m ill over the immense horror of this past week’s actions. But those are ideas, embodied and enacted by people. The people aren’t the ideas — it’s the ideas that must be combatted and demolished. We shall see if there are any conservatives — ever — that step up to the plate in this time of real crisis.