Yesterday I wrote about the huge bonuses being given to some employees of AIG’s financial products unit, the same unit that sold hundreds of billions of dollars’ worth of credit-default swaps that nearly toppled the entire company last fall. The bonuses, which total about $165 million, seem almost criminal given the $170 billion AIG received in taxpayer bailout dollars, and it didn’t take long for folks in Washington to chime in.
President Obama was first up:
This is a corporation that finds itself in financial distress due to recklessness and greed.
Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?
In the last six months, AIG has received substantial sums from the US Treasury. I’ve asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole.
Our own U.S. Senator, Russ Feingold, also shared his thoughts on the AIG bonuses at a listening session in Kenosha this morning:
Feingold said he fired off a letter over the weekend to Treasury Secretary Timothy Geithner asking that some legal remedy be found to halt the bonuses.
“There must be a way to prevent these bonuses,” Feingold said. “The anger is justified in this case, and it’s being felt elsewhere.”
In an interview after his listening session, Feingold echoed the comments of a number of citizens who said it was not right to ask autoworkers to renegotiate their contracts and pensions and not force AIG executives to do the same.
“The idea that somehow people are legally entitled to bonuses when they didn’t even do the right thing… I thought bonuses were supposed to be when you get something right instead of when you screw things up. I want some answers, and I want to know here this money is going,” Feingold said.
While I certainly appreciate the indignation voiced by Sen. Feingold and President Obama, I don’t see what legal options the government has, because as the Recess Supervisor notes at Playground Politics, indignation does not trump contract law. I give Sen. Feingold credit for acknowledging how awful the AIG bonuses are, and while I’m glad he’s pressing for the administration to explore their legal options, I’m not holding my breath that the AIG bonuses won’t be paid out.
“While I certainly appreciate the indignation voiced by Sen. Feingold and President Obama, I don’t see what legal options the government has, because …indignation does not trump contract law.”
I can not pass up the opportunity to praise a blue dem that get’s it. Sir, you are a gentleman and a scholar, not to be out done by your good looks and friendly manner.
The fake outrage over this is nothing but reactionary grandstanding based on emotions and not based on facts nor practicality.
LOL@Rich. Thanks for the kind words, though I’m sure you’ll take them back before too long…
yeah. you su(k you darn commie…….
just kidding
Atta boy, Rich!