Obama on Fiscal Responsibility

[futureage1]

Well said. The right of two private parties to form a binding contract (as long as it's not for illegal activity) without government interference is definitely one of the cornerstones of our country.

 

Those who want to give the government power to terminate contracts have no idea what kind of slippery slope they're on.

 

I'm sure Obama will do what he can to get AIG or the bonus payee to not enforce the contract, but it has to be one of those parties that makes the concession. He can't force it.

 

Nevermind that the USA will be third world country by the time the bailout business is done. Just honor contracts of basically nationalized companies and just pay the bonuses. No one here is saying not to pay salaries. But bonuses when we have a huge unemployment problem is unseemly and contrary to popular belief Gov. was set up to stop just such abuses of taxpayer money. In fact that is the whole basis of the founding of the country. It's not a slippery slope.

[Good Old Neon]

Well said. The right of two private parties to form a binding contract (as long as it's not for illegal activity) without government interference is definitely one of the cornerstones of our country.

 

Those who want to give the government power to terminate contracts have no idea what kind of slippery slope they're on.

 

I'm sure Obama will do what he can to get AIG or the bonus payee to not enforce the contract, but it has to be one of those parties that makes the concession. He can't force it.

 

I think it

[MattZ]

Like has been stated repeatedly, when you go to Gov. for money to supposedly save your company the rules change. All you are defending is a fucking farce. When you fail there are consequences like no fucking bonuses. It is really simple but it gets old hearing people defend this shit for no reason other than lack of understanding. A contract is null and void with Gov. money, other than salary. There would be no company without taxpayer's money. They will never pay back the loans and we get no benefits other than above market mortgages and jacked up credit card rates There are numerous examples across every profession of pay cuts, lost benefits with NO bailout funds. Why is Wall St. and AIG exempt from this? And bringing up the UAW as a voluntary re-negotiation? That is the ONLY way the Bushies would give them the first bailout. That's not free choice. It's extortion. Read the vet proposal again. It will effect ALL vets. All that new policy does and will do is deny vets healthcare pure and fucking simple. And Gov. can't set rules and limitations on bailout money just vets healthcare and union pay? It must be great living in never never land. But thanks for the corporate point of view on things.

 

Man, you have a lot of anger. As I said in my edit (maybe you missed it?), the govt could have and should have set pre-conditions on the bailout money. The AIG bonuses are nauseating and there WAS a way to fix this. The administration screwed this up and as an Obama supporter and voter, this is on his administration (and the one before it). They fumbled this issue badly.

 

I am sorry to say it, but I am not living in never never land, and my view is not the corporate point of view. It may be a lawyer's point of view (guilty as charged). The whole point of laws and rules is that they don't change and they aren't a farce. Notwithstanding your frustration with me, futureage1, I think you'd be pretty surprised to see how much our voting record and opinion on matters actually mirrors one another.

 

It should come as no surprise that folks are a little upset that the same pricks who sorta raped the economy, are now stepping up to receive their handsome, unearned reward.

 

You can lump me into that category as well.

[futureage1]

Man, you have a lot of anger. As I said in my edit (maybe you missed it?), the govt could have and should have set pre-conditions on the bailout money. The AIG bonuses are nauseating and there WAS a way to fix this. The administration screwed this up and as an Obama supporter and voter, this is on his administration (and the one before it). They fumbled this issue badly.

 

I am sorry to say it, but I am not living in never never land, and my view is not the corporate point of view. It may be a lawyer's point of view (guilty as charged). The whole point of laws and rules is that they don't change and they aren't a farce. Notwithstanding your frustration with me, futureage1, I think you'd be pretty surprised to see how much our voting record and opinion on matters actually mirrors one another.

 

 

 

That is all my point is. And I may be doubly frustrated this morning after reading about the vets healthcare proposal. My brother is serving in Iraq right now. And it is just not right to keep going after people who don't have half of what Wall St. does and contributes a hell of a lot more. I think you are mistaken, I don't think we see eye to eye on much when I post websites of the growing homeless children population and tent cities in this country and you write long diatribes on why the AIG bonuses are justified when vets get denied healthcare to ultimately pay for it.

[Winston Legthigh]

Nevermind that the USA will be third world country by the time the bailout business is done.

Good lord. Ease off the hyperbole, man.

[John Smith]

Those who want to give the government power to terminate contracts have no idea what kind of slippery slope they're on.

 

The government has always had the right to terminate contracts through law and the courts. Always has and always will.

[MattZ]

That is all my point is. And I may be doubly frustrated this morning after reading about the vets healthcare proposal. My brother is serving in Iraq right now. And it is just not right to keep going after people who don't have half of what Wall St. does and contributes a hell of a lot more. I think you are mistaken, I don't think we see eye to eye on much when I post websites of the growing homeless children population and tent cities in this country and you write long diatribes on the why AIG bonuses are justified when vets get denied healthcare to ultimately pay for it.

 

If anyone in this country deserves free healthcare, it is our vets. Frankly, in my mind, they deserve free whatever the hell they want. From a policy perspective, I strongly disagree with Obama's proposal. I only pointed out that the issue here is a substantive one, not a legal one.

 

As far as AIG goes, my "long diatribes" are not meant to justify the bonuses. My post was meant to point out the flaw in your logic. You are lumping apples and oranges together. Pre-existing contracts are not the same as the examples you gave. Obama and his administration have come to this realization as well. I am not inventing this issue out of thin air or living in never never land. The government screwed up (LEGALLY) by propping up a company and giving it bailout money without kicking the tires and having preconditions. They didnt realize what they propped up. I am (just as) furious that these clowns get paid. But I am not willing to go to the next step (as you are) which would be to call for the govt to tear up private contracts.

[John Smith]

If anyone in this country deserves free healthcare, it is our vets. Frankly, in my mind, they deserve free whatever the hell they want. From a policy perspective, I strongly disagree with Obama's proposal. I only pointed out that the issue here is a substantive one, not a legal one.

 

I agree. We ask them to do so much and they assume they will be taken care of. When they come home they face reality. This is nto just an Obama Issue vets have almost always been cut lose by the government at one point or another, when they really should be cared for for the rest fo their lives. My uncle was severely wounded in Korea and was physically and psychologically damaged nearly to the point of being incapacitated. He managed to get by for the next fifty years, but each year, each new adminsitration it seemed cut something, which was dead wrong. I'm not saying give them a free ride for everything, but they deserve 100% care for anything related to their time in the military.

[Good Old Neon]

If anyone in this country deserves free healthcare, it is our vets. Frankly, in my mind, they deserve free whatever the hell they want. From a policy perspective, I strongly disagree with Obama's proposal. I only pointed out that the issue here is a substantive one, not a legal one.

 

As far as AIG goes, my "long diatribes" are not meant to justify the bonuses. My post was meant to point out the flaw in your logic. You are lumping apples and oranges together. Pre-existing contracts are not the same as the examples you gave. Obama and his administration have come to this realization as well. I am not inventing this issue out of thin air or living in never never land. The government screwed up (LEGALLY) by propping up a company and giving it bailout money without kicking the tires and having preconditions. They didnt realize what they propped up. I am (just as) furious that these clowns get paid. But I am not willing to go to the next step (as you are) which would be to call for the govt to tear up private contracts.

 

True, but the line is a bit blurred when the government becomes the owner. The contracts were written before the company imploded (though I

[mfwahl]

I agree that contracts have to be honored. In this case, since the contracts are old, it's a sticky situation that we don't want to turn into a slippery slope. But in this case, the federal government has 80% of the company, a company that lost $61.7B in the 4th quarter alone. The government should be looking for legal loopholes as aggressively and these guys are, I guess is my only point.

[futureage1]

If anyone in this country deserves free healthcare, it is our vets. Frankly, in my mind, they deserve free whatever the hell they want. From a policy perspective, I strongly disagree with Obama's proposal. I only pointed out that the issue here is a substantive one, not a legal one.

 

As far as AIG goes, my "long diatribes" are not meant to justify the bonuses. My post was meant to point out the flaw in your logic. You are lumping apples and oranges together. Pre-existing contracts are not the same as the examples you gave. Obama and his administration have come to this realization as well. I am not inventing this issue out of thin air or living in never never land. The government screwed up (LEGALLY) by propping up a company and giving it bailout money without kicking the tires and having preconditions. They didnt realize what they propped up. I am (just as) furious that these clowns get paid. But I am not willing to go to the next step (as you are) which would be to call for the govt to tear up private contracts.

 

I posted this a couple pages back. Surely if a judge can order this for union contracts when a company is bankrupt, the President and Federal Gov. have the power and obligation to do the same when any one of these companies that are bailed out are bankrupt, as well as in debt to much larger degrees than the airlines and auto makers combined. Like it has been said before, the contracts are not worth their paper at this point, in every sense of the word. And now I hear the argument is that it has to be voluntary on each side. In other words, these bailed out pricks are saying they are keeping our money and won't forgo the bonuses. The bailout model has failed and now the Gov. has to step in since these companies won't do the right thing. They have been given a lot of chances. A billion in AIG bonuses sure would provide a lot to vets or build a lot of schools.

 

In 2005, United Airlines was allowed to file for bankruptcy and subsequently allowed by the bankruptcy court to forgo its "contractual obligations" to pensioners. This resulted in pension reductions of greater than 50% for retirees.

 

From the International Association of Machinists (IAM) website: "IAM attorneys today argued that United could not unilaterally propose pension terminations and that IAM members never agreed to allow such fundamental modifications of contracts that remain in effect. Judge Wedoff, however, ruled that the solvency of the PBGC is more important than the pension benefits of United's employees."

 

http://www.goiam.org/content.cfm?cID=4387

[JUDE]

Given that without us, the company has no value, they're no longer worth the paper they are printed on.

 

 

"You could argue that if taxpayers hadn't bailed out AIG, the contracts wouldn't be worth the paper they were signed on," Cuomo said

 

By Michael D. Shear and Paul Kane

 

updated 2:38 a.m. CT, Tues., March. 17, 2009

[John Smith]

As owners of AIG I wonder how much say that we the people have in the running of the company?

 

Also these "contracts" have to be paid out according to who? AIG of course. Have these contracts been mmade public? Has anyone outside of AIG and legal counsel reviewed them? Like I said yesterday I find it hard to believe that there is not some opt-out language included in the contracts. And if they have to be paid out, what is the basis for the payments? Performance of the company? Is that the performance before or after the cash infusion from us?

[Good Old Neon]

Did you just call me a Cuomo, JUDE?

[caliber66]

I posted this a couple pages back. Surely if a judge can order this for union contracts when a company is bankrupt, the President and Federal Gov. have the power and obligation to do the same when any one of these companies that are bailed out are bankrupt, as well as in debt to much larger degrees than the airlines and auto makers combined.

Where do you get the impression that the Executive Branch and the Judicial Branch have, or should have, the same powers and obligations?

[futureage1]

Where do you get the impression that the Executive Branch and the Judicial Branch have, or should have, the same powers and obligations?

 

To quote Shrub, "The President is the decider." Now they don't have the exact same powers as judicial but as has been posted before they are well within their right to assign value or throw out contracts when federal money is involved. As it also has been previously stated, since we keep bailing them out they cannot declare bankruptcy and a judge and court cannot decide these matters, as was the case with the Big 3. That's why Bush demanded concessions and got them. Reagan also did it to air traffic controllers in the 80's. Obama just did it with stem cells. So is it only ok when Republicans do it to unions? If it would make you feel better maybe Obama could have the Attorney General declare the contracts bonus provisions null and void due to tax payer infusion into the companies.

 

Also I wanted to add we are talking about 400 employees who got bonuses this last time to the tune of 170 million. This is not affecting the everyday AIG worker in the least.

[caliber66]

So is it only ok when Republicans do it to unions? If it would make you feel better maybe Obama could have the Attorney General declare the contracts bonus provisions null and void due to tax payer infusion into the companies.

Where do you get the impression this is a partisan thing?

[Winston Legthigh]

The government has always had the right to terminate contracts through law and the courts. Always has and always will.

I need an example of when the government interfered and terminated a valid contract that was uncontested between the two parties (neither of which was the govt) that agreed to it. Or, failing that, the law that allows it to do so.*

 

*Not including land deals.

 

The ire towards AIG is appropriate, but equal ire should be directed towards those who authored the bailout deal, assuming that it's bailout money that's being used to pay the bonuses. Do we even know if AIG is using bailout money to pay the bonuses? Isn't the bailout money's purpose to aid AIG's liquidity problem? Do we know anything about the bonus structure, or what these payment are tied to? Are they deferred bonuses that were owed from previous years' performance?

[futureage1]

I need an example of when the government interfered and terminated a valid contract that was uncontested between the two parties (neither of which was the govt) that agreed to it. Or, failing that, the law that allows it to do so.*

 

*Not including land deals.

 

The ire towards AIG is appropriate, but equal ire should be directed towards those who authored the bailout deal, assuming that it's bailout money that's being used to pay the bonuses. Do we even know if AIG is using bailout money to pay the bonuses? Isn't the bailout money's purpose to aid AIG's liquidity problem? Do we know anything about the bonus structure, or what these payment are tied to? Are they deferred bonuses that were owed from previous years' performance?

 

There is not one because they were all bankrupt as given in the examples above. What you are referring to are anti trust laws and the examples are numerous google it or wiki.

 

And yes, the bonuses are from bailout money did you not read the articles posted or listen to the news? All the bonuses are from 2008 when AIG was already bankrupt and surviving on taxpayer money. Thats what the term rewarding failure is referring to.

[MattZ]

Again, by law, when a company goes bankrupt, many of their debts are excused and obligations forgiven. That's the point of bankruptcy. Our laws incentivize companies to come back from bankruptcy by forgiving debts. It stinks if you are a creditor. But it's the law. Comparing the AIG situation to companies in bankruptcy is grapefruits to apples. AIG never declared bankruptcy. The bailout may have conveniently enabled them to avoid bankruptcy, but this is the reality we are faced with.

 

Also, Winston, I read an article recently that said that the bonuses were not deferred comp. Apparently, they were incentives to keep the employees around. On the theory, I guess, that it wouldn't be so easy to just replace employees to untangle the mess that the genuises at AIG created.

 

And, Winston, dollars are fungible. Bonuses paid by a company that needed to be bailed out are bonuses paid with bailout funds. By definition. I hope you aren't suggesting otherwise.

[mfwahl]

Also, Winston, I read an article recently that said that the bonuses were not deferred comp. Apparently, they were incentives to keep the employees around. On the theory, I guess, that it wouldn't be so easy to just replace employees to untangle the mess that the genuises at AIG created.

An article that I just read said that the contracts were signed in March 2008, and they guaranteed them the same pay as 2007 regardless of their performance (this is according to Cuomo). If this is true, either both sides signing the contracts were idiots, or they knew they were in trouble and anticipated getting assistance from the government. And we need a new word. According to the American Heritage Dictionary a bonus is "something given or paid in addition to what is usual or expected" or "A sum of money or an equivalent given to an employee in addition to the employee's usual compensation." These "bonuses" are starting to seem pretty usual and expected.

[MattZ]

Well, this is interesting (and certainly solves the problem).

 

from the NY Post:

 

WASHINGTON - Congressional Democrats vowed Tuesday to all but strip AIG executives of their $165 million in bonuses as expressions of outrage swelled in Congress over eye-catching extra income for employees of a firm that has received billions in taxpayer bailout funds.

 

In the House, Reps. Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would that would tax at 100 percent bonuses above $100,000 paid by companies that have received federal bailout money.

 

"We will use any means necessary," said Ryan. "It boggles my mind how these executives can be so unaware of what the American people are going through."

 

The Internal Revenue Service currently withholds 25 percent from bonuses less than $1 million and 35 percent for bonuses more than $1 million.

[lost highway]

I gotta say, there is a 'fact of the matter' kind of outrage- but do the numbers. AIG gets about 160 billion from a bailout, then they turn around and toss 160 million of it into bonuses. That means they wasted one thousandth of their bailout on fat cat cash. That's like if you were about to declare bankruptcy and some new government program handed you a hundred thousand dollars and you turn around and spend a hundred dollars at the liquor store. Not a kind, or just gesture, but not really a big piece of the proverbial pie.

 

I bring this up, not because I think AIG should get away with it, but because a lot of intellectual energy is being devoted to the symbolic, possibly at the cost of the pragmatic. The ultimate question is not whether or not they can get away with 160 million in bonuses, but whether they should be held up, left to fail, or completely nationalized.

[Winston Legthigh]

And, Winston, dollars are fungible. Bonuses paid by a company that needed to be bailed out are bonuses paid with bailout funds. By definition. I hope you aren't suggesting otherwise.

I'm not suggesting, nor arguing on AIG's behalf at all. I just have many questions...

[ih8music]

a lot of intellectual energy is being devoted to the symbolic, possibly at the cost of the pragmatic. The ultimate question is not whether or not they can get away with 160 million in bonuses, but whether they should be held up, left to fail, or completely nationalized.

agree - but to that end, I think the outrage over these "bonuses" is doing a good job in educating the public about how little control we have over these companies, despite our 80% ownership of them (in AIG's case). If this doesn't drive the public to supporting nationalization, I'm not sure what will.