The elucidating comment I've read on this so far was from http://www.reddit.com/r/business/comments/85nk2/spitzer_the_aig_bonuses_are_a_smokescreen/c08bmtg
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About the current CEO:
* He's being paid 1 dollar a year.
* He gets no bonuses, either way.
* He gets no stocks.
* He didn't sign these contracts, he inherited them.
About the people who tanked AIG:
* They are gone.
* They were few.
About the people who received the bonuses:
* They did not kill AIG
* They were offered these bonuses last year, to stay for another year, and clean up the mess.
* They reduced $2.7 trillion of shit to $1.6 trillion of shit.
About the bonuses:
* They are less than .1% of the bailout money.
* They were offered last year, to retain people until they cleaned up the mess.
* They were NOT meant to retain people for next year.
What if we didn't pay them?
* The people who are (successfully) cleaning up the mess, would leave.
* Then, they would sue (rightfully so).
* AIG would have to try to replace them, while trying to prevent losses on the suddenly 'unmanaged' accounts.
* AIG might be forced into bankruptcy, for defaulting (aka: we lose).
* AIG might survive, but take further losses, and need more help (aka: we lose).
Personal thoughts:
* We should have let them fail, but we didn't, it would be idiotic to let them fail now.
* The current CEO deserves nothing but respect, but instead, he gets death threats.
* The people who stayed on, and cleaned up the mess, deserve to be well paid. They saved us a ton of money, and the bonuses are marginal in comparison.
Analogy:
The people from FP (financial products) are the burger flippers at McDonalds. The people who got the bonuses work the counter at McDonalds. The burger flippers made some seriously shitty burgers. They got fired. The counter crew has spent the last year trying to find places to safely unload those burgers (worm farms, bacteria labs, etc.) It was a dirty job, and Mike Rowe wasn't available.
Yes, I'm contradicting a post I made yesterday. I watched the full hearings on C-Span today http://c-span.org/Watch/watch.aspx?MediaId=HP-R-16464, and learned a hell of a lot from them. Yeah, I changed my mind, but that's what I do when I learn that the facts don't match my perception.
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