The American International Group [AIG], which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year.
The company is claiming that they "have no choice," bonuses had already been promised in contracts. At what point does the government quit fearing the big businesses and lobbyists and say That's too fucking bad? If those bonuses have to be paid than AIG should figure out how they can fulfill those contracts outside of government money.
The government's stance when it comes to the companies receiving bailout money who are doling out huge bonuses has been What can we do? They have the money already. There are contracts. There is plenty that can be done. Tax them for their bonuses. Hell, just take some back, all of the installments haven't been paid at this point. It's unacceptable. Obama's chief economic advisor, Larry Summers, said on ABC's "This Week" that the bonuses are "outrageous," but that's not good enough when the government continues to posture itself as helpless, they have all the leverage. Furthermore, they understood from the beginning how these companies have been using their bailout money, yet Congress refused to attach any strings to TARP. The administration's response to this news is leaving me feeling, like Jon Stewart said in his Jim Cramer interview, that they're all in on it, that the average American is providing the capital for their adventure. The notion that AIG can't break their contracts for CEOs bonuses is unbelievable. On two fronts we are already seeing that in a situation like this contracts are not always the most important thing. Auto-workers are letting the industry shred their contracts and create new terms for the unions, and the government is considering giving bankruptcy courts the power to shred contracts and re-negotiate homeowner mortgages. Why should bonuses for executives be exempt?
Remember in January when John C. Hope III, chairman of Whitney National Bank in New Orleans, publicly talked about what his bank was going to do with the $300 million they received in bailout funds? "Make more loans? ... We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans." If this is how the banking industry and Wall St. feel then what was the point of giving them more money? Between CEO bonuses and banks, like Hope's, that are just storing the money away, it seems that there was no logical reason to bail them out. They could not have needed that money that bad if they aren't using it to sustain the business. And why does it continue to happen? At this point we should have realized that there is no trickle down. The only way the country is going to recover is by putting money in the hands of those who are actually struggling. $165 million could provide a whole lot of scholarships to people who might not be able to afford skyrocketing tuition, provide help to failing public schools, assist homeowners with failing mortgages, or help new businesses start up.
The problem with these kinds of measures to revive the economy is it is putting faith in the exact same businesses and ideas that got America into this mess. There is an overwhelming lack of funding for new ideas right now. When the New Deal brought America out of the Great Depression there was an emphasis on new ideas. Reviving the economy through new businesses, new jobs, new public works. What we've seen so far is an attempt to get what has failed back on it's feet. The businesses that have received bailout money have shown no signs of planning on changing their methods. They should not receive a second or third chance. The executives who have put us in this situation should be given a cell right next to Madoff.
This notion of reviving what is already there instead of trying something new is part of the plan up and down. The NEA received funds to help ailing non-profit arts organizations. All of their new funding has to be distributed to organizations that have received NEA funding in the past. Again, why can't everyone apply on equal ground and give start ups a chance where they see fit. AIG is just one of many companies that is giving out bonuses to CEOs with taxpayer money, but take what their giving out alone - $165 million - how many non-profits could benefit from that? This is becoming a standard, we're investing in businesses that refuse to invest in America.
The government's refusal to fund new ideas, and to just accept that there is nothing that can be done about these big businesses whose back room bargains lead us to this financial crisis is mind-boggling. These CEOs have already been given a get-out-jail-free card, why just accept that they can squander the bailout money they received? If I cheat on my taxes I have to pay for it. If I steal from my place of employment, I get fired. If I steal from a customer at my place of business, I get fired. If I sign a contract that I can't pay I have to find a way to make good on it. If they steal from their business, and it's customers, I have to chip in, with the rest of the country, to ensure that they can continue to have a summer home.
This notion of reviving what is already there instead of trying something new is part of the plan up and down. The NEA received funds to help ailing non-profit arts organizations. All of their new funding has to be distributed to organizations that have received NEA funding in the past. Again, why can't everyone apply on equal ground and give start ups a chance where they see fit. AIG is just one of many companies that is giving out bonuses to CEOs with taxpayer money, but take what their giving out alone - $165 million - how many non-profits could benefit from that? This is becoming a standard, we're investing in businesses that refuse to invest in America.
The government's refusal to fund new ideas, and to just accept that there is nothing that can be done about these big businesses whose back room bargains lead us to this financial crisis is mind-boggling. These CEOs have already been given a get-out-jail-free card, why just accept that they can squander the bailout money they received? If I cheat on my taxes I have to pay for it. If I steal from my place of employment, I get fired. If I steal from a customer at my place of business, I get fired. If I sign a contract that I can't pay I have to find a way to make good on it. If they steal from their business, and it's customers, I have to chip in, with the rest of the country, to ensure that they can continue to have a summer home.
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