Sunday, March 15, 2009

Summers had it right - "off with their heads"

But like all "executives" he pussies out. Maybe he is in line for a nice payout!

Rescued AIG says it has to pay $165M in bonuses immediately

"The easy thing would be to just say ... off with their heads, violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law, for the overall financial system."

Yes Larry, that would be the easy thing to do. But you are wrong when you talk about "the consequences of breaking contracts for the overall system of law", because the law has long since ceased to exist. And you fuckers are so incompetent that you cannot even manage to do the "easy work." Maybe we could bring in more illegal workers to do the work that Americans won't do.

WASHINGTON (AP) — Leaders of the White House economic team and the Senate's top Republican bellowed about bonuses at a bailed-out insurance giant and pledged to prevent such payments in the future.

From one Sunday talk show to the next, they tore into the contracts that American International Group asserted had to be honored, to the tune of about $165 million and payable to executives by Sunday — part of a larger total payout reportedly valued at $450 million. The company has benefited from more than $170 billion in a federal rescue.

AIG has agreed to Obama administration requests to restrain future payments. Treasury Secretary Timothy Geithner pressed the president's case with AIG's chairman, Edward Liddy, last week.

"He stepped in and berated them, got them to reduce the bonuses following every legal means he has to do this," said Austan Goolsbee, staff director of President Obama's Economic Recovery Advisory Board.

Woooooo...he berated them. I'll bet they are shaking in their boots.

"I don't know why they would follow a policy that's really not sensible, is obviously going to ignite the ire of millions of people, and we've done exactly what we can do to prevent this kind of thing from happening again," Goolsbee said.
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Added Lawrence Summers, Obama's top economic adviser: "The easy thing would be to just say ... off with their heads, violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law, for the overall financial system."

Summers said Geithner used all his power, "both legal and moral, to reduce the level of these bonus payments."

I am sure he has. Just like when he failed to pay his taxes.

The Democratic administration's argument about the sanctity of contracts was more than Senate Republican leader Mitch McConnell of Kentucky could bear.

"For them to simply sit there and blame it on the previous administration or claim contract — we all know that contracts are valid in this country, but they need to be looked at," McConnell said. "Did they enter into these contracts knowing full well that, as a practical matter, the taxpayers of the United States were going to be reimbursing their employees? Particularly employees who got them into this mess in the first place? I think it's an outrage."

In an interview that aired Sunday on CBS' 60 Minutes, Federal Reserve Chairman Ben Bernanke did not address the bonuses but expressed his frustration with the AIG intervention.

"It makes me angry. I slammed the phone more than a few times on discussing AIG," Bernanke said. "It's — it's just absolutely — I understand why the American people are angry. It's absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets — that was operating out of the sight of regulators, but which we have no choice but to stabilize, or else risk enormous impact, not just in the financial system, but on the whole U.S. economy."

AIG reported this month that it had lost $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

In a letter to Geithner dated Saturday, Liddy said outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

Horseshit. They are bankrupt. We bailed them out. Let the executives get in line with everyone else.

Liddy said in his letter that "quite frankly, AIG's hands are tied," although he said that in light of the company's current situation he found it "distasteful and difficult" to recommend going forward with the payments.

Liddy said the company had entered into the bonus agreements in early 2008 before AIG got into severe financial straits and was forced to obtain a government bailout last fall.

The bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.

Goolsbee acknowledged the AIG example could make it harder to sell the administration's financial plan to Congress.

Congress already bought off on all of this hook line and sinker.

"Yes, you worry about that backlash. But you're also angry that this would happen at an institution that has been so troubled and you're trying to save. So I think that's perfectly fair," he said.

Goolsbee appeared on Fox News Sunday, and Summers was on CBS' Face the Nation and ABC's This Week, where McConnell also was interviewed.

Fire up the B-52s. Now.

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