Some thoughts I have on the whole mess, after rolling it around for a while. It's kind of on the same thought as the original post, that Congress is really the ones to blame, but a little more specific. All of this information is gleaned from various news shows, articles, etc. that I've seen/heard/read over the past couple days so I don't have links.
The bonuses that AIG paid out, while a very large amount to all of us peons, is actually only 1/10th of 1% of the total bailout. Another way to look at it is if the bailout money is comparable to $100 (an amount we can relate to), then the bonuses are one dime; 10 cents. So why is everyone so freaked out about this? It's a good talking point for the politicians, I guess, but in the grand scheme of things it's nothing. Yeah, the idiots who decided to insure the risky loans shouldn't get a bonus for anything, but it's really not a huge amount compared to what they received.
AIG paid out 70% of the bailout monies that it received to banks on the bad assets that it owed on. Refer back to the article from the first post, where they sold insurance on bad mortgages (obviously they didn't think they were going to be bad, but when the system collapsed they owed a LOT in insurance payouts). So AIG did what they were supposed to do with the bailout money, as opposed to the banks that just sat on the money while the credit market went to hell in a handbasket. Again...why are we all so mad at them? Can you say SCAPEGOAT???
Back to the bonuses. Not a big deal in the grand scheme based on percentages, but a PR nightmare for AIG and the ones who authorized the payouts - Congress and Obama. We've all heard how the bonuses were in the contracts that were negotiated on or before February 11th. Magic date - February 11th. Before the bill was finalized or signed. The excemption is in the so-called "Dodd Amendment", but Chris Dodd says that he didn't put the exemption in the amendment (just the limits to bonuses). He said it wasn't there when it left the Senate, but was there when it came rushing back for final approval (that no one could read, remember). Interesting, though, that he did get the largest contributions from AIG.
So
someone put that exception with that date in the bill. So who worked on the bill?
If I recall it was the Congressional Leadership, who are now among those screaming loudly about the bonuses and wanting to tax them 90-98% if the execs don't give it back voluntarily.
Here we go with the finger pointing again.
And no one taking responsibility for anything.
.
