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Grassley Hyperventilates On AIG Bonus Fumes

Senator Charles Grassley (R-IA) has recommended that the now infamous AIG bonus recipients follow the Japanese example, and resign or commit suicide:

"I suggest, you know, obviously, maybe they ought to be removed," Grassley said. "But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide.

"And in the case of the Japanese, they usually commit suicide before they make any apology."

New York Attorney General Andrew Cuomo has already issued subpoenas to AIG employees that received the bonuses. Perhaps he's hunting for an opportunity to impose the Chinese solution.

Amidst the high dudgeon that Capitol Hill and the White House position themselves in it is worth remembering that the Federal Reserve, from which the AIG bonus money came, is ultimately regulated by Congress.(The same congress that excels at show trials but can't write legislation to prevent something like this happening.)

Payments to financial industry executives have been on the political radar screen for months. Why didn't Congress do something about this before then? It would have been relatively simple in my mind: simply have AIG officers agree in writing that the bailout funds had a specific and exclusive use before the money was handed over (this is SOP in Federal Bankruptcy Court). But that would have required some forethought and careful consideration by congressional leaders such as Barney Frank and Christopher Dodd.

Perhaps they were too busy with the record stimulus bill to be bothered with a trifling $160 million in bonuses to AIG officers and employees. Or it could be that Congress is wholly indifferent to this sort of bad judgment except when it becomes a public spectacle. After all, this is the same Congress that refuses to abolish its own automatic pay raises.


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Comments (14)

Why didn't Obama object whe... (Below threshold)
Hermie:

Why didn't Obama object when the TARP legislation was being drawn up by him and the Senate Democrats?

After all, he was credited by the MSM for his 'quiet leadership' regarding the development of this legislation, and he flat out stated that the TARP legislation would have to meet his requirements before he would vote on it.

And to think, all the afflu... (Below threshold)
syn:

And to think, all the affluent, ivy-degreed Wallstreeters (that's 'rich people' for all the Obamabots) dumped huge amounts of cash into Obama's campaign coffers; after Obama cleans them out the only Change they'll have left are pennies on the dollar.

No doubt they are asking themselves this morning whether the membership to p. diddy comb's VIP room was really worth losing all their wealth.

On the other hand, these affluent, Ivy-degreed will probably never realize they were #1 Suckers in the greatest Confidence game ever played.

Here is the real deal. All ... (Below threshold)
ziggy in jc:

Here is the real deal. All those bank execs were like a fighter taking a fall. The government asked them to do it. Nothing financially can go down without legislation. The gov bundled good and bad investments together and asked the banks to take them with the expressed idea that if the investments failed, not to worry, you will get paid. Of course, the bankers knew what they were getting. It was all legal and now what you see is a sham perpetrated by the government. When you rise to that level in finance, I would assume you are not stupid. When the government says go ahead its usually done without conscience.

Isn't the whole reason for ... (Below threshold)
Adrian Browne:

Isn't the whole reason for the bailout in the first place is to make sure these people don't lose any money, aren't embarrassed, or aren't inconvenienced in any way?

That's what a "bailout" is.

It doesn't matter whether or not AIG executives deserve a bonus or whether or not AIG is still obligated to pay them -- the bailout money is theirs and nobody can do anything about it.

How sad that an elected off... (Below threshold)
BJ Brooks:

How sad that an elected official has such little regard for human life that he finds it acceptable to advise someone to commit suicide. I find Senator Grassley's remarks to be ignorant and racist. I hope the people of Iowa take a good look at the man they elected to office.

The government wants... (Below threshold)
hcddbz:


The government wants AIG to break it contracts.
The government wants AIG to fire its employees
The government wants AIG to promote suicide
The government does not want to collect tax money.
You have entered the Socialist ZONE

So AIG MIGHT be spending 1% of the bailout money they received on paying their employees compensation. I know many people have a concept of bonus as being a little something extra the boss slips into your check around Christmas time but to many people it more like their experience with a waitress tip. Only part of your salary is regular pay and the rest is based on bonus or commission. That combined is your yearly compensation. So what happens when people get paid? They have to bay local and federal taxes. The more money they get paid the more taxes get paid. I look at this as the government getting an immediate return on investment. Not to mention that since they do not credit any of the monies that they are getting back in tax receipt towards AIGS pay back of the bailout it a good thing. NY state is hurting for tax revenue yet they want to waist money and to look at who got paid what. Pretty soon they will start to demand all companies publish their payroll for the public. It will be anyone getting a tax break or anyone doing things regulated by the federal government.

Failure is par for course f... (Below threshold)
Tim:

Failure is par for course for Congress, yet they never, ever quit. Grassley is 75 and has been a senator for 28 years. And he's a spring chicken compared to some of the other fossils in there. The whole lot of them should resign.

Gotta love all that 'moral ... (Below threshold)
GarandFan:

Gotta love all that 'moral indignation'. Especially from Congress of all places!

When is Congress going to c... (Below threshold)
Michael Clement:

When is Congress going to clamor for the Automakers to break their contracts with the unions for pay? Obviously that needs to be addressed too since they got our money.

The Japanese way...why don'... (Below threshold)
mag:

The Japanese way...why don't our politicans lead by example.

The morons running the gove... (Below threshold)
_Mike_:

The morons running the government should be the ones to commit seppuku. My understanding is that the company was contractually obligated to pay the bonuses.

That's one of the problems with bailing out a failing business - the business has likely made bad decisions which is legally obligated to fulfill.

Saw this in a video I watch... (Below threshold)
Steve:

Saw this in a video I watched. "Mr. Obama, who said paying bonuses was 'shameful' while companies were on government life support, has found changing Wall Street culture to be more difficult than anticipated."

Mr. Obama needs to lose his cool and let AIG have it for this mess up. What were these people honestly thinking???

Here's the link. http://www.newsy.com/videos/bailouts_and_bonuses_for_aig/

"And in the case of the ... (Below threshold)
SATerp:

"And in the case of the Japanese, they usually commit suicide before they make any apology."

It must be really hard to apologize if you're dead.

In this Twilight Zone time ... (Below threshold)

In this Twilight Zone time we are living in, why am I not surprised that Sen. Chris "Sweetheart Mortgage" Dodd (D-CT) and Rep. Barney "I had a sexual relationship with a Fannie Mae executive Herb Moses" Frank (D-MA) are the one's most agitated? They are the crooks!

All of this is a contract issue. The employees are entitled, by contract, to those bonuses, and that's that! Congress, Obama, keep out!

There was a great article about this titled "Bonus Indignation" found at http://economicefficiency.blogspot.com/2009/03/bonus-indigation.html

It also really skewers Chuck Grassley for his seppuku remark (pun intended).




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