It is the favorite excuse of losers -- no one could have seen it coming. Condoleezza Rice said it about 9/11 after she had been handed a memo saying, "Bin Laden Determined to Strike Inside the United States." George Bush said it about the levees breaking during Hurricane Katrina after he had sat through a presentation on how the levees would break during Hurricane Katrina. CNBC said it about the crash of the market and economy as they bragged day in and day out about how well they knew the market.
And now the Obama administration is saying it about the AIG bonuses, as they damn well knew it was going to happen. In fact, they pushed for it to happen. Several times, Tim Geithner argued that companies receiving bailouts should be allowed to give most of their executives any damn bonus they like. And he won that argument.
Every time a bill came up to limit executive bonuses they watered it down. They said the companies couldn't retain top "talent" without it. They said they were afraid of a "brain drain." And the list of dumb excuses goes on and on.
So, they were wrong. I can abide by that. What I cannot abide is the fake shock and outrage. The claim that no one could have seen this coming. I saw it coming! Read what I wrote here and here and here. How clear was it to me -- and anyone paying attention -- that they were going to give away our money to executives who did not deserve it? Crystal clear.
Time after time, the Bush administration, the Obama administration and Congress had an opportunity to attach limits on executive pay to legislation authorizing bailout money. And time after time, they refused. So, please spare me the bullshit outrage. If you didn't see this coming, then you are an absolute moron.
It turns out if you let people take millions of dollars in money they didn't deserve, they'll take it every time. Of course!! I'd probably do it, too. The bellyaching about greed is unbearable. If you set up a system, where people give themselves compensation with no accountability to the people putting the money in, they will obviously give themselves as much compensation as they can possibly get away with. Every time.
To not understand that is to not understand human nature. It was the government's job -- as the primary lenders and financiers of these essentially bankrupt companies -- to dictate the rules of the game. Of course, they could have put strings on that money. They could have capped bonuses, or salaries overall. They could have capped it for everybody, instead of just the top five or twenty-five executives. They could have taken these companies into bankruptcy, where the executives would not be legally entitled to their salaries or bonuses.
Yet, they did none of these things. Instead, AIG executives will walk away with $450 million in bonuses -- at a company that was such a colossal failure that it lost $99.3 billion last year and required a $170 billion taxpayer bailout. Worse yet, the executives in the division that caused this epic meltdown will get $165 million in bonuses. I can't get over the injustice of that.
But don't worry, we are told that Tim Geithner "was really upset by the news" and "berated them" over the phone. What a joke! Wow, that tongue-lashing must have really stung. I wonder if their several million dollar bonus will help cushion the blow of being yelled at. Geithner is responsible for setting the rules in the first place. It's all in the rules. If you let people take the money, they will. If you don't allow it as a condition for receiving the money, they can't. As the politicians scurry to find someone to blame, they should look in the mirror. They're the ones that set the rules of this game.
Now the same politicians who brought you this piece of injustice will claim a) there is nothing that can be done and b) will pretend to be outraged and then not fix the underlying problem. The politicians will huff and puff and probably do nothing. So, after all this fake outrage, will this happen again? If this broken incentive system is not fixed, of course it will. You can bet your bottom dollar on it. In fact, you already have.
UPDATE -- Take the AOL Hot Seat Poll About This Right Now By Clicking Here.
Witness Barney Frank's blog yesterday right here on the Huffington Post. Not an explanation, but a big "it wasn't meeeeeeeeee" post.
Trouble is, with all rhetoric most Americans will believe our inept Congress members actually do care.
And gee, how easy was *that*? Drop some fake one-liners to the media and suddenly we're all suppose to feel they're on the side of the average (now struggling) American.
Nothing will be done. But what's really tragic is it'll take years if not decades to get to the truth in this fiasco.
Good article, and thanks for telling it like it is.
AIG INSURES THE PENSION TRUST OF THE UNITED STATES CONGRESS! No wonder why they were immediately bailed out! Our Senators and Congressmen said by their actions, "To hell with the people, let's protect our future." ISN'T IT NICE TO SEE WHERE THEIR LOYALTIES LIE!
Hahaha... I'm not laughing because it's funny, because in fact it's really sad. But typical. Where is the MSM in all this?
http://search.aol.com/aol/search?query=Hoover+1932+rule+on+bank+failure&s_it=keyword_rollover&c.userid=3034206285940693727
I heard Barney Franks on R. Maddow's show say, "because the first $85 billion was loaned to AIG in September, 2008 by the Federal Reserves, and did not need the approval of congress, there may not be any recourse regarding the bonuses because the Federal Reserve made the loan without putting any restrictions on the loan". However, since we are now the majority owner( 80%) of AIG, and with the restrictions put in place by the Obama administration, we will be calling the shots moving forward. See Franks amendments to TARP dated 01/19/09:
http://www.huffingtonpost.com/cenk-uygur/fake-outrage-by-politicia_b_175315.html
Carol
The WSJ reports today that bailed out WS firms are talking about getting past the pay limits in the new TARP bill:
http://online.wsj.com/article/SB123724826580949187.html
Will the WH and Congress get in front of this KNOWN problem and fix the loopholes in the TARP legislation? Or is there another weekend surprise or two in the works - the WS firms will misbehave and continue to pay themselves obscene salaries on the taxpayer dime, the news will leak and the politicians will pretend to be outraged again. President Obama's platform of change is socialism for the rich, it is just "the song and dance" version.
http://www.rules.house.gov/amendment_details.aspx?NewsID=4121
To think....holding our elected officials accountable! You mean to say, they should have actually done something from the outset???
They should have included verbage in their big fat handout legislation that would have averted this mess???
Oh, the humanity! They should have...dare I say it!...they should have done their jobs?!?!?!
Mister, who do you think you are???
The biggest issue here is with the federal government's failure (yet again) to see this coming and to not put restrictions on it in the first place. Then they have the audacity to complain after the fact.
As a remedy for the claim that the bonuses are important to retain "talent", the new owners should simply fire all that "talent" on the spot. Next issue.
How about the rage at the people that enabled this mess? Phil Gramm (republican majority 1999) who got passed the repeal of Glass-Stealey...the law that said an insurance company could not be a bank, or a mortgage company...AIG a insurance company got into trouble, not in the insurance unit, but in the mortgage/Financial producer unit. This is what brought about this mess and with AIG being wrapped up into the banks and institutions here and all around the world, if AIG falls... so will the banks over seas...and those banks are in the web with banks here...so our financial institutions will fail...our complete economy would fall. The banks over seas had to be shored up so that in turn the banks here would not fail. Maybe that is a piece of the puzzle that is needed for the people here to know. It is not just shut down the banks...in the Great depression 10,000 banks failed. We had banks fail last year and this year...we do not need to go through another GD.
Obviously your speaking of Paulson & Bush, they engineered TARP.
It will forever be their baby, they just left if for someone else to raise.
That's a tough one, by God...!