Will Tim Geithner be the New “Brownie”?

During Katrina President Bush complimented his then FEMA director Michael Brown. In the midst of the crisis the president said “you’re during doing a hell of a job Brownie.” His embattled director was subsequently shown to be completely out of touch and ultimately removed from his position. Brown’s problem was he failed to understand the situation and in doing so he failed to have the resources in place to fix it. Well when I hear President Obama continue to defend Tim Geithner I can not help but think of good ole Brownie. Does Geithner fully understand this crisis?  In light of the AIG mess one has to wonder. When he was told about the bonuses why did he go along? Why didn’t he say well let them sue?  Holding to the money would have been better than trying to recover it or tax it after the fact. On the Tonight Show President Obama said he was doing an “outstanding job.”  If I was Geithner I might not be resting easy today because you can be praised today and unemployed next week just ask Brownie.

 

 

Why Do We Need to Know the Names of the AIG Bonus Recipients?

Yesterday at the congressional hearings I heard Rep. Barney Frank demand the names of the AIG employees who received the bonuses. The CEO of AIG said it would not be a problem if he could assure him that the names would be kept confidential. Franks said that would not be the case.  Why do we need to know their names? So people can look them up and picket outside of their homes? Is that what we have come to?  This AIG situation is a mess but like it or not these people had a contract. This is something that the Treasury Department, the FED or Congress should have caught prior to the release of the TARP funds, but they didn’t. The horse is gone and even if you double lock the door the horse is still gone.  The reality the funds should have never been released and punitive tax measures are not the answer. The blame game is in full effect, but the real question is where do we go from here, and I don’t believe releasing the names to the press will fix this situation. Doing that will create another debacle and as mad as the public are about this releasing those names would be like waving raw meat in front of a group of hungrey lions.

 

This AIG Thing is Just a Mess and It Looks Like It Can’t Be Fixed

The government bailouts AIG, and AIG doles out millions of taxpayer dollars in bonuses to employees who created this mess in the first place. Most Americans are angry and rightfully so, but how do you fix it? Some in Congress are saying break the contract. They contend contracts are broken or re-negotiated everyday. The more frightening response is using the tax code as a punitive weapon. Some are suggesting that the bonuses be taxed at 100%. Is this really fair? Most of the bonuses are being paid to employees at the London office so this would have no effect on them. So in reality it would be largely symbolic since the majority of recipients would not be fazed by it, but is this the way to go? This is a Pandora’s Box that I don’t think we should open. What’s to stop the government from using this weapon recklessly in other scenarios unlike this one? This is a mess that started out wrong, but the fact is two wrongs don’t make a right and punitive taxing is just wrong.

AIG Rewards Executives For Failure and We Pay For It

The term bonus means you have done something beyond the norm. You have exceeded expectations. In school the teacher would offer extra credit but only to those who had done everything they should have done in the first place. If you haven’t done your assignments you were ineligible for any extra credit.  The same test should be used in assessing bonuses if your company is failing, and the government bails you out you should not be rewarding bonuses. Such is the case with AIG they contend that they are contractually obligated to pay the bonuses. So are these bonuses not linked to success?  So if AIG declined to pay them they would have to go to court against the employees? Well then go to court. This is a slap in the face to the American people who are suffering and they do not have a safety net. Jobs and salaries are getting cut, some salaries are delayed or deferred and we sit here and watch AIG executives say our hands are tied. Too bad their hands are not cuffed because if this is not criminal it should be.