AIG: Hey, It's Less Than 1%

So, take $170 billion (so far) in bail out money, then pay out $165 million in bonuses. How can such losers end up "winners"? As the NY Times reports, our government attorneys say AIG is legally obligated to make these payments.

Nice transparency (by AIG in not disclosing the bonuses when they took the bail outs) and way to set up the bailout deal in the first place (I find it hard to believe that a deal guy like Paulson didn't think about this when setting up bailouts). Yet another example of why government should be kept out of nationalizing companies- they get out negotiated when they are putting money into companies about to go under. Would a private firm pay bonuses at an insolvent firm it acquired? I don't think so.

Why the deep fear of bankruptcy for these firms? That would allow the courts to void contracts, such as these bonuses.

Oh, and I thought bonuses were paid for performance. These guys have made a joke of capitalism and private enterprise. If you are big enough, it is all upside, with no real downside.

Now the excuse for these bonuses is "executive retention." CEO Liddy says: "We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury." Unbelievable. The "best and brightest"? How about if we pay them NOT to keep screwing things up?

Remember the U.S. Treasury owns almost 80% of AIG. So what Liddy is saying is that the owners of the business (us, basically) should not be involved in setting up compensation for their employees. Business as usual, in this most unusual of times. Geitner should fire Liddy- or did they also agree to a sweet severance payment to make sure he is around to "lead" the company?

"Call Your Bank" Week

March 9-13 is "Call Your Bank Week". It is easy to participate.

1) Call your credit card bank, your mortgage bank, etc.
2) Ask the person on the phone how they feel about their bosses taking bonuses while they lay off employees, take government bail out money and rack up record losses.
3) Tell them you hope they record the call and play it to their manager.
4) Then post your experience on Facebook's "Give Back the Bonuses" page.