Tuesday, March 17, 2009

Funding AIG's Bonuses

I think everyone knows by now that AIG received a rather hefty sum of money from the Federal Government so that the insurance giant would stay afloat. It's also become big news that despite receiving this money from the taxpayers, they used some of it on executive bonuses.

I readily admit that I don't understand the inner workings of the insurance business, and know little about what AIG does with its money (besides sponsoring Manchester United), but I have to ask: Do Executives of a failing company really deserve bonuses?

I'm torn in a sense on this issue, because while I believe that AIG is acting incredibly irresponsibly with taxpayer dollars and that upsets me greatly as a taxpayer, I also get the privilege of telling President Obama "I told you so." This is what happens when the government messes with private corporations, and if you give corporations money they are going to spend it the way they always do. This is why there was great concern over being able to watch how the money was spent, because these things could happen, and it's great timing considering how the President is going to be going back to Congress soon to re-fill the trough for AIG, and other corporations who are putting their hands out.

My favorite quotes about this story include:

-"You could argue that if taxpayers hadn't bailed out AIG, the contracts wouldn't be worth the paper they were signed on," New York Attorney General Andrew Cuomo said. (If this is true, then why is the Federal Government buying worthless contracts instead of letting AIG deservedly fail?)

-"I warned them (AIG) this would be met with an unprecedented level of outrage," Sen. Christopher J. Dodd (D-Conn.). (And yet they didn't listen to you, probably because they already cashed your check, perhaps it would be better to deal with this issue before handing over the money).

-"How do they (AIG) justify this outrage to the taxpayers who are keeping the company afloat?" he said, declaring the bonuses an "outrage" that violate "fundamental values." (Well of course its an outrage now that they've shown everyone what a fool you are. Mr. President, had this not of happened how much would you have asked Congress to give them the next time around?)

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