Forbidden Donut

Nah, it's okay because they took advantage of the free money we gave them with no prerequisites.

Considering it isn't a tax, I'm not too upset over it. The scariest thing they've considered in recent memory was giving them that much money in the first place while telling us there were safeguards in place to prevent this sort of shit. AIG's execs are using their contracts (admittedly negotiated before the bailout) as a way of justifying the use of public funds to pay bonuses to each other. What should have been done is a complete renegotiation of all contracts in the business units required to use the funds. That wasn't done. This is mostly a stupid publicity stunt to let the house democrats ride a wave of public opinion on this issue into another term.

Don't want the government to interfere with your shit? Worried about that are you? Then don't take 30 billion dollars of public money and draw attention to how bad you are with money by throwing it away.

I'm pretty sure this isn't a slippery slope thing. Just a stupid thing.

edit: By the way it would have been equally outrageous for our government to force them to renege on their contracts, IMO.

editII: Still the right thing to do. (While giving them another 300 million or whatever it was was really really stupid)

I'm upset that my tax dollars (and the countries tax dollars) are paying to float a company that should sink into oblivion. I'm upset that the company won't take the proper steps to get itself to survive on its own. I'm upset that congress thought that handing them money would be a good idea. I'm upset that congress is "surprised" that things like this would happen.

Overall, shit stinks. SURPRISE!

Taxing the AIG "bonuses" is a band-aid on the mistake that congress created. Seriously, it isn't going to help. The precedent that this could create is risky, but at this moment it looks like a one time deal. Congress is trying to save face. They hand money over to a company that mismanaged its own money and act like it was a brilliant idea. AIG mismanages the money, and then congress acts as if AIG is fully to blame. Maybe they did pull the trigger, but the government handed them a loaded gun. Congress should own up to their mistake in this, but instead they are just trying to look good.

/when does the revolt begin?

Gonna have to agree with most everyone else here gov. AIG isnt being taxed, they are being forced to sign an "agree to pay" on the money that was LOANED to them, its no different than if you took out a student loan for 15 credits of classes, dropped all the classes, bought a car, then paraded it around outside all the banks that gave you that money.

I'll agree its kind of ridiculous that our government fucked up in the first place, gave AIG a ton of free money with little to no stipulations, and is now scrambling to get it back to save face.

Oddly enough, when I look it up online I see it called a tax over and over again, with no explanation of what makes it a tax and not a "give us our fucking money back you greedy assholes" agreement.

Is it a tax? Like a %? Or not? How is it "taxed"? Hell... what exactly is being taxed?

@frat: That analogy isn't really accurate. If you receive a loan from the bank for school, you are not obligated to use that money for school at all. However, banks that are in the business of giving school loans do so in such a way that money is paid to the school first and any leftover is paid directly to the student. In that case, the student can still spend that extra money anyway they please. The only time a bank could ask you for the money back would be if you signed a contract that said the money must be used to pay for tuition. In this case, the lender (congress, sigh) handed the money directly over to AIG with little string attached. Specifically, AIG was not obligated to renegotiate contracts to eliminate bonuses. The degree to which AIG's actions are ethical is irrelevant -- congress does not and should not exist to mediate ethical claims.

@andrew: This is what I find so scary about what they are considering. Aside from sending nasty letters, in what twisted interpretation of the constitution does congress have the authority to demand payment from anyone?

I am thinking that congress will end up NOT taxing them for the money. The word BONUS is being thrown about willy-nilly. Most Americans (myself included) heard "paid out 165 million in bonuses" and hemmoraged. Most Americans (myself included) associate the word BONUS with a sum of money paid to someone who has by doing his/her job EARNED THE COMPANY MONEY!

It is my understanding that these monies were not bonuses in that respect. It was a "Retention Bonus". It was offered to these people so that they would stay and do their job until a certain date. These people most likely receive performance based bonuses. AIG was aware that they were going to have a bad year (did not realize at the time just how bad). The employees also realized this and realized that they would not make anywhere near as much money as they normally would because the performance based bonus was going to be very small or non-existent. Therefore in order to keep these people who (allegedly) knew how to do the job required working for the company they were offered a guaranteed set amount of money to remain with the company and hopefully things would be better by the end of the "bonus" period and things could go back to "normal".

These contracts and "bonus" amounts were agreed to BEFORE the full extent of the problem was realized. Contractually I feel AIG should pay the bonuses. I hate to see that much money (which isn't much compared to the amounts loaned) paid to the people partially responsible for the situation.

It is possible that congress is trying to stir up a big stink about all of this to try and obscure their role in the whole mess. And my friends CONGRESS PLAYED A BIG ROLE! At least that is what my understanding is. A bit of legislation in 2001 regarding certain types of loans and how they were to be handled (i think it was securitiezed loans). (google it and get even angrier because once again congress has taken a trip on the failboat).

Stopping here because have had too little time to look into the whole mess further and fear the information I have gathered could be erroneous.


regarding the above spiel punctuate to taste and enjoy.

OH DEAR GOD!!! DID I JUST MAKE A LEGITIMATE AND COHERENT POST REGARDING A REAL SUBJECT? O.K. Slightly off topic but WOW!


p.s. I must agree Court. As much as i hate to see the money go, Congress should not make a "one shot with a silver bullet tax" (I thunked that up mahself). I am not an expert on what Congress can and cannot legally do regarding taxation. However it would not be the first time they have played fast and loose with the law. Also THE LAST THING IN THE WORLD CONGRESS NEEDS IS A NEW FUCKING GUN TO SHOOT THEMSELVES IN THE FOOT WITH!

As with the previous post also punctuate this post to taste and serve.

I don't know if this is more scary, or a more pathetic situation.

Imminent Domain. Sorry, the government needs this. Don't ask questions, citizen.

I know this isn't a case of ID, but the rationale is similar. The government could walk up to your parents house tomorrow, legally seize it at 10% of its market value, bulldoze it, and turn it into a recruiting office. All under the authority of our lovely constitution.

awesome.

Notice that our gov't *doesn't* do this.

Eminent Domain doesn't apply at all. Under eminent domain, if the government decides it is in the public's best interest to have your property, they must pay you market value. The power of eminent domain is not that the government can seize your property on the cheap but rather that if it does decide to pay you market value, you must oblige. Even then, there are strict limitations on what the property seized can be used for (specifically, the government must explicitly define exactly who will use it and what they will use it for during eminent domain proceedings). Furthermore, the federal government's ability to exercise eminent domain is far less potent than the state's ability -- both by design and recent executive orders signed by Bush.

All of that is pretty much irrelevant though since money is not currently considered "property" by the federal government, so eminent domain couldn't possibly apply anyway.

"All of that is pretty much irrelevant though since money is not currently considered "property" by the federal government, so eminent domain couldn't possibly apply anyway."

I'm not sure if this is true, I will get back to you on it.

So yeah, I know it doesn't apply. It's a parallel. We permit, through our constitution the compulsory acquisition of property by our government for a fair price if it would serve the public good. They don't go around willy nilly claiming public good and taking your shit.

I have a series of questions:

1. Who determines "fair market value" for your property?
2. When state/federal government gives your property away for private, and not public use, which they have, would your objections be heard?
3. Is there legal recourse in the event of abuse of this power?

I think this is stupid, as I said above, I also think ED is mostly stupid. My point here is not to say that our government has the constitutional authority to seize this money. It's to say that if they do it anyway, I don't find it particularly scary. The circumstances are pretty specific. Do I like it? No. I just see a whole lot of outrage about an event that may or may not occur based entirely on public opinion.

Mob rule sucks.

1. The market determines fair market value. I'm not a property appraiser, so I don't know the formulas involved, but determining the market value is done every single day whenever a house (or anything, really) is appraised. There is a reason why you won't get dramatically different appraisals from different people. Unless of course your appraiser is also your buyer, in which case you should always be cautious (which I'll elaborate on in point 3).

2. Eminent domain does not say that the property must be used by the public -- only that it must benefit the public. In fact, aside from building roads, eminent domain is almost always exercised in such a way that gives ownership of the land to a private organization. My objections would be heard (which I'll elaborate on in point 3).

3. All citizens have the right to challenge a claim of eminent domain during litigation prior to the sale of their property. If you have objections about the eminent domain request, this is where they could first be heard (legally speaking). If this course of action fails and your property is still ultimately seized, you can challenge the eminent domain ruling through the judicial system all the way up to the supreme court. This has happened, and the plaintiffs have won. There is no precedent set otherwise.

Mob rule does suck; that's why the notion that this country should be a "democracy" is dangerous and disturbing.

But regardless, that is not what congress wants to do, as you and I have both already said. As I type this, I actually just heard on NPR (I haven't substantiated it) that congress is planning to push a bill through to levy a 90% tax retroactively to all bonuses given to people making over 250k a year at companies that received bailout money. The implications of that are absolutely horrifying.

Thanks for the rundown. I'll take some time to hunt down the resolution, but NPR doesn't usually talk out of their ass. Yeah, that's insane. Especially considering how bad our law makers are at writing laws...

I retract my non-outrage. If this is the case, this is absolutely outrageous.

Well, they did it. I stand corrected.

"In all, 243 Democrats and 85 Republicans voted "yes" on the bill. It was opposed by six Democrats and 87 Republicans."

Next test is whether our super-duper constitutional scholar of a preznit vetoes this sucker. I'll be quite surprised if he doesn't, and quite disappointed if he does.

Bummer.

/I'd be much less upset if they just increased marginal tax rates to 90% for everybody making over x dollars, but that doesn't have the same element of bravado as pitchfork & torching a specific group of people.

He won't veto it.

My only hope is that this gets challenged to the Supreme Court and gets overturned.

Edit: The worst part about this is that this is CONGRESS' FUCKING FAULT. They screwed the pooch on the handing out this money in the first place, and so their solution is to grossly overstep their authority AGAIN and do something that is blindingly outrageous like this! WHAT THE FUCK. I would take ten Iraq Wars over this shit.

In 1814 the British burned down the U.S. Capitol.






TOMMY!!!! OH TOMMY LAD!!! We need a favour!

Was it not the Canadians? I could be worng...

The British did the burning, the Canadians just showed up with some Tuborg and some back bacon and had a bit of a cookout.

as to money being property:

from the notes of a US statute on federal tax liens:

"No bill of attainder or ex post facto Law shall be passed."

The status of money as property seems to be tied to social class. A drug dealer's money will be seized with everything else and called "property". But that's besides the point that when these contracts were drawn up they were legal, when they were honored, it was legal, and they are covering their asses in congress with something that directly violates one of the easiest to understand clauses of our constitution. I'm now convinced they have no idea we have that thing...

totally agree, i love you now

The U.S.S.A. (The United Socialist State of America)

discuss.

I've been calling this country that since Obama said we need to "spread the wealth"...

Pshh. Capitalism is for wimps.

Capitalism and socialism are not mutually exclusive.

Agreed, however let's not lean too heavily toward the socialism kthnx bye.

Anyway, I agree with Gov here that the whole situation is pretty messed up. The government has no business telling a company who can give a bonus to who, and how much they are allowed to give. They are also talking about regulating executive pay which is just as bad. America is built on having a pretty free market, which as made us attractive to do business in. We are heading down a road that will make us more and more like Europe in their more socialist tendencies.

And the news companies are not helping at all. I don't watch a ton of 24 hours news but I do catch it once and a while and I heard a lot about outrage over the bonuses. Its a fricken 1xxmilliong out of BILLIONS. They were contracts made prior to the bailout and are still should be considered a bond. Besides, who knows what the circumstances of these bonuses are? The news raises hell on shit that doesn't matter while the important stuff is only noted on here and there.

We are so screwed. Obama's budget and all.

It is when the government owns businesses.

Means of Production =/= Means of Wealth Production

You *can* have a 100% both society. It would fail miserably, but you could do it.

I understand you can have both, but it is impossible to have competition (capitalism) when the government is propping up one company and letting another fall.

In other news:

This might be jumping on Obama's dick, but maybe it was never his intention to tax these fuckers. He shot the idea down relatively quickly, but let it sit long enough with public opinion somewhat behind it for a full weekend before doing so. This let the AIG bonus recipients sweat it out while trying to avoid being stoned to death for a couple days.

Now 15 of the top 20 recipients are returning the money. No new laws, no shifty tax codes... just shamed em into it.

Well, whether that was his plan or not, I am very glad that it is turning out this way. Regardless of the result though, I am concerned that the threat of passing unconstitutional, reactionary legislation is being used as a means to pressure people into doing something. This is a bill that in the best case should not have ever been imagined and in worst case should have been laughed off the floor.

That's more a criticism of our legislative branch than the executive. They were asked for a legal method of recovering these funds, they said TAX THEMMMMMM! And Obama said no, that's not legal, try again. Then there was some hurrrrr-ing and durrrrr-ing on the hill and it all worked out cause the bad guys gave up. Rainbows. Unicorns.

/I was REALLY refreshed when I heard Obama say that he wouldn't do that because it's unconstitutional on 60 minutes. REALLY refreshed.

It was intended to be a criticism of the legislative branch (specifically the house).

I was very refreshed to hear Obama say that it was unconstitutional (although I would like to point out that he said something along the lines of "probably" unconstitutional). However, I wish he had gone one step further and said he would veto it on those grounds, but he and his administration have been extremely reluctant to do so.

The thing to me about the AIG bonuses is, AIG is a pretty large company. Most aspects of that company are successful business ventures and the employees of those parts of the business deserve to get their bonuses. I only see a problem when you start rewarding bonuses to the employees working in the parts of the company that aren't producing and are in fact responsible for the downfall of the company.

The financial products division of AIG was almost exclusively responsible for the near collapse of AIG and the subsequent government takeover. The outrage was expressed over the 450 million dollars in bonuses these specific folks were getting under the guise of "retention". Excuse me, but when you are one of 12 people responsible for the collapse of a financial institution so large that it threatens to take down the country it resides in, I don't think you deserve to be "retained".

So I can assume you also see the problem?

Well, that's only partially accurate. The FP division was definitely almost exclusively responsible for the near collapse of the company, but even within the division the blame can only be placed with a small number of people. The entire division wasn't responsible for this mess. As the recent publicly released resignation letter to Libby from one of the higher-ups in that division describes, most of the people that were the cause of this mess are no longer with the company. There are plenty of people in the FP division that have responsibly maintained profitability and are essential to the turn-around in the company. And aside from these bonuses, they haven't been paid for the past year.

People are outraged only because they want something to be outraged about. The people responsible for the reckless decision-making in AIG are largely gone, and the people that are left who have decided to take the huge burden of turning the company around are doing so at their own expense -- they aren't getting paid and their reputations and dignity are getting dragged through the mud. And worse still, they are on the verge of having a gross invasion of their privacy by their own company and their own government, and their very lives are being threatened by hundreds of emails and letters through AIG daily.

This whole mess is a travesty, and I am most certainly not on the side of my fellow paupers. I don't think lynch mobs are anymore justified just because the victim is white and wealthy.

While I trust you damn near 100%, I'd really like to see the info about who in the department was primarily responsible and when they left. Because I don't see that in the letter to Geithner.

That list isn't available because it isn't a public matter. The US congress wants Libby to release those names, which in my opinion is a gross invasion of privacy.

I don't even see the claim you're making being made though. This is a moment for:


/not to take credence away from your claim. I'm just generally curious and slightly too lazy/incompetent to research it properly. Since it's you making the claim, and not anonymousinternetposter9978, I'm inclined to just believe you, but:



Is a whole lot of unsupported information. I saw in the letter that they are in fact not getting paid, traditionally at least, so those people getting bonuses is fine, but saying it's to retain them is stupid. Where in hell are those guys going to go? The financial firm that is in ruin and laying people off left and right, or the other financial firm that is in ruin and laying people off left and right? And yes, I'm 100% with you that just being generally outraged at people because of their job is silly. I'd rather be pissed at the people who over-leveraged every last asset they could in order to expand their balance sheets and rob their investors blind.

The quickest (and most recent) thing I can find to substantiate that information is from the recently publicized resignation letter by Jake DeSantis. I've read on occasions before this similar tales of the "bad" leaving the company while those whom were not responsible were left to pick up the pieces, especially citing the recent replacement of the company CEO. I will rummage around my history when I get home and see if I can come up with anymore stuff.

If they are not getting paid, the retention bonuses are necessary to retain them. Even rich people don't work for free, so if they're not accumulating money from their work, they are better off not working at all.

Man that letter leaves a bad taste in my mouth. But sure enough, he claims that all the bad people left and the people getting hurt by this stuff are innocent. Also captains of industry.

I hate atlas shrugged...

I am not one to necessarily trust people that I don't know, but I have been offered zero reason not to believe this guy. It's not like he's gaining much out of all of this (in fact, it seems like he's going to lose a few hundred thousand dollars).

It also doesn't help that I hold very little against wallstreet for all of our current problems, so I am probably a bit biased.

Americans can be upset. The letter does spell out a lot, but it doesn't change the fact that it is tax payers money. If AIG never got bailed out to begin with, none of those people would have those jobs to begin with. It boils down to the many people losing their jobs, because their company had to cut back, and then AIG employees get to keep their job, because they get tax money. He has every right to complain, but so does everyone else.

Bottom line: He had a job, because the government took the money from citizens to support it. The citizens were robbed, and they are angry at the people who asked for it to happen.