Faiz discusses AIG bonuses on MSNBC.
Faiz discusses AIG bonuses on MSNBC.
This morning, ThinkProgress editor Faiz Shakir went on MSNBC — opposite former McCain campaign spokeswoman Nancy Pfotenhauer — to discuss the AIG bonus fiasco. Faiz disputed the right wing attempts to blame Treasury Secretary Tim Geithner for the problems, pointing out that AIG’s bonus contracts were arranged under the Bush administration. He added:
If I’m faulting Geithner for anything, it’s that when he first learned of this, he didn’t take it directly to the American public and use the public anger as a negotiating tool with AIG to get them to renege on some of these bonuses.
He also faulted the “culture in Wall Street that employees expect these millions of dollars in bonuses.” “No longer can we have employees who brought down the economy expecting that they’re going to get multi-million-dollar bonuses,” Faiz said. Watch it:
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The ‘outrage’ was expected by everyone in Washington.
They knew we’d cry “foul”.
They knew there’d be bonuses.
Now they’re using the public’s outcry to align themselves with poor little us, WHEN THE ENTIRE GOVERNMENT SAT BY IDLY AS THE BANKS AND INSURANCE COMPANIES WERE ENGAGED IN MALICIOUS ACTIVITIES.
They are EVERY BIT as guilty as those at AIG.
KILL EM ALL.
March 18th, 2009 at 10:45 amWay to go Faiz Shakir ~ keeping us informed with an intelligent perspective regarding this AIG madness!
March 18th, 2009 at 10:46 amThese contracts were agreed to during the Bush administration and it was the Bush administration that screamed “fire” and waited until the fire was out of control. Now, the media wants to blame the Obama administration and the current Congress for decisions made during the Bush administration. Shame on them. They are showing their ignorance.
March 18th, 2009 at 10:48 amDNFP Says:
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They are EVERY BIT as guilty as those at AIG.
Before laying blame – keep in mind that this AIG madness started in 2008 BEFORE the Obama administration began.
March 18th, 2009 at 10:49 amThis has little to do with Bush, other than his cheerleading for American branded mulitnationals who funded Repugnicants.
Look at any SEC filing (DEF14A) and read about the board compensation committee. They’re all the same, incentive pay, pay for performance, bonus, reward, etc.
Studies show incentive pay causes riskier behavior, i.e. one contributer to the huge mess we find outselves in. Greed, leverage and terrible quality were the drivers.
Data shows widespread CEO cheating on stock option incentive comp over a ten year period. 30% broke the law, with little consequence under the Bush administration. (Now he deserves a shot.)
AIG isn’t unique in bribing leaders to suboptimize the company, while maximizing their take home pay. It’s as widespread as the toxic assets created by America’s shadow banking system. P4P is ubiquitious in the corporate world.
Don’t spread the poison the health care and education.
March 18th, 2009 at 10:57 amBefore laying blame – keep in mind that this AIG madness started in 2008 BEFORE the Obama administration began.
No doubt. But along with the steaming piles of crap Obama was left to clean up, repugs are holding him responsible for them in the first place.
March 18th, 2009 at 10:58 amThe worst of this debacle is that this will make it far more difficult for the stimulus package and other economic remedies to be put forward. The result will likely be a slower and a less effective recovery for the nation.
Nearly all economists say the govt. needs to pour money into the economy, but the reluctance to do so is growing by the day because of this fiasco.
Geithner may not be alone in culpability here, but he is certainly not guilt-free. Jane, at Firedog, and Greenwald have pointed out that Geithner has for months been fighting for payment of the bonuses in the face of opposition by Dem’s (notably Senator Dodd). Then, when the sh*t hit the fan, in the face of public outrage, Geithner and the Obama administration had the temerity to lie and say they were only following Dodd’s lead in the matter (a lie that stinks of Rahm). Faiz is betting on the wrong horse in this race!
March 18th, 2009 at 11:03 amBefore laying blame – keep in mind that this AIG madness started in 2008 BEFORE the Obama administration began.
In my eyes, those who’ve been elected to represent us failed to do so. Whether Dem or Rep, they’re were all in support of “more money, more power”. It’s the mantra of all politicians.
THEY’RE ALL TO BLAME.
If you think that the elites in government give a rats a$$ about our little lives, I’ve got some great riverfront property on the Gulf of Mexico you should look into purchasing.
March 18th, 2009 at 11:04 amHow bad can reporting get? Does anyone do research anymore?
http://stateofthedivision.blogspot.com/2009/03/aigs-bonus-plan.html
Bonuses don’t hold water using the company’s description of their bonus plan. Faiz’s points are partisan blather. The problem is P4P is bad theory and worse in practice, as shown by AIG.
March 18th, 2009 at 11:06 amCNN’s Ali Velshi reported last night on Anderson Cooper’s show that back in January, he and CNN reported on AIG’s plans to give these bonuses to their executives – and somehow, inexplicably, the Obama administration and Geithner didn’t get word of this or find out about these bonuses until around March 10. That is inexcusable and just another example of how incompetent our government is when it comes to controlling our money and tax dollars.
I want to know how Olympia Snowe and Chris Dodd’s amendments on bonus restrictions got taken out of the stimulus package in conference. Either amendment (if ruled/deemed legal by constitutional scholars) could’ve possibly prevented or at least delayed these bonuses. Who did this, a democrat or a republican? Whoever did it ought to lose their Congressional seat next election season, so I hope we find out soon.
March 18th, 2009 at 11:11 amFaiz did a good job, but he has the tougher sell.
Republicans had the White House for 8 years, so their culpability is widely accepted.
But, Democrats took control of both Houses of Congress over two years ago. Before any bailouts were even considered. Isn’t the Congress a component of our national leadership. Don’t they have responsibilities for what transpires?
And I still don’t know. (I listened here yesterday and I got enough information to keep an open mind). But, why were Democrats defending the viability of Freddie Mac and Fannie Mae and the push for affordable housing back in 2003?
http://www.youtube.com/watch?v=hxMInSfanqg
Why were those questions being asked? Is it just coincidental that questions were being raised 5 years ago about loans being given to people that didn’t qualify? Isn’t that problem related to our current circumstance?
Republicans have responsibility for the current financial dilemma. But, Democrats also have responsibility. The leadership was poor from both parties.
Trying to absolve Democrats of the responsibility of their defense of the affordable housing policies that added to our current predicament, and the management of the bailout funds, is admirable among partisans, but not credible to objective observers.
March 18th, 2009 at 11:19 amI am very sick of the Republicans portraying this as a failure by Obama when all the decisions on this were made by the Bush administration. Obama is still largely handling the fallout from the terrible decisions they made. Bush was President until nearly the end of January, remember.
March 18th, 2009 at 11:25 amThe original bailout of AIG was done by the Federal Reserve in September and October, 2008. An additional bailout was performed by the Treasury Department in November, 2008. Although Congress approved TARP the money was largely discretionary. You can blame Congress for lax oversight, but Bush cannot be absolved of his responsibility for how these funds were spent.
March 18th, 2009 at 11:31 amIs anyone surprised now at the motives of Bush’s Treasury Secretary? Remember he submitted a three page hackneyed porposal to Congress in September last year that insisted that Congress should have NO oversite, input or updates on how financial institutions spend the bailout money. Makes me think that Bush, Paulson and the corporate overlords planned this misuse of taxpayer funds and hoped to keep it from the public.
March 18th, 2009 at 11:37 amAnd I still don’t know. (I listened here yesterday and I got enough information to keep an open mind). But, why were Democrats defending the viability of Freddie Mac and Fannie Mae and the push for affordable housing back in 2003?
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“Indeed, in a 2006 Securities and Exchange Commission filing (available here) covering its activities in 2004, Fannie Mae stated: “We did not participate in large amounts of these non-traditional mortgages in 2004 and 2005.” ”
Myths and falsehoods about the purported link between affordable housing initiatives and the financial crisis
March 18th, 2009 at 11:44 amGod I just wish this Pfotenauer thing would go away forever.
March 18th, 2009 at 11:46 amAIG seeks cover under CT law….
….Connecticut lawmakers said Tuesday they hope to change a state law that’s being partially blamed by insurance giant American International Group as a reason for paying $165 million in retention bonuses to executives.
AIG, which has received tens of billions of dollars in federal bailout money, has said it is bound by Connecticut’s Wage Act to pay the bonuses because its financial products division is headquartered in Wilton, CT.
The state law allows employees to sue for twice the full amount of contractually owed wages — in this case $330 million — as well as attorney’s fees, if the employer refuses to pay up. Lawrence Cafero, R-142, House minority leader and an attorney, said he believes Connecticut’s definition of wages is written broadly enough to include the retention bonuses and other bonus pay.
“They have consistently cited the Connecticut Wage Act as the primary reason that they must give out those bonuses. We hope to put an end to that,” said Cafero, adding that Connecticut “should not be used as the scapegoat or the excuse for AIG” to pay the controversial bonuses….
March 18th, 2009 at 12:29 pmPin AIG woes on Brooklyn boy: Joseph Cassano walked away with $315 million while company staggered
March 18th, 2009 at 12:36 pmAs I understand it;
Over six years Bush and the GOP dismantled the separation of ordinary banking and investment banking, and deregulated lending and borrowing rules that allowed unfettered short-term speculation, abetted by Bernanke and Paulson.
The financial press, as infotainment/infomercial divisions of business conglomerates, suppressed and derided alarms raised by economists and rational an-alysts.
The 2006 mid-terms gave Dems a house majority but not a Senate majority, Bush still held the White House and its veto power and all his appointees were still in place. The Dems couldn’t do much (and weren;t paying attention to the looming crisis–not least becasue it had bee suppressed so effectively).
The excrement really hit the propeller BEFORE the 2008 election ( remember John McCain saying on the day that “the fundamentals of the economy were strong”–that was Bush boilerplate).
Panic ensues (particularly amongst Republicans) and bailouts are rushed-through.
Bush threatens to ‘withhold’ half the bailout package from Obama (effectively a delay).
Obama wins the White House, the Dems gain more in the House but the power balance in the Senate remains effectively even, but its still a couple of months before the new administration takes its seat,
With the financial crisis as the BIGGEST issue of all, the GOP and Blue Dog Democrats now have disproportionate influence and exercise their own partisan agendas—injecting amendments that preserve their ideological ideals (and serve their biggest fundraisers).
The press and the GOP also pile on demanding that Obama show ‘leadership’ by compromising with the minority. Bush threatens to ‘withhold’ half the bailout package from Obama (effectively a delay).
Short term pragmatism reigns. Newly elected President Obama appoints Geitner (sp?) who is a Wall Street insider—a ‘logical’ but IMHO a philosophically terrible choice.
Republicans split on whether Wall Street should be allowed to fail as free-market ideology would dictate, or whether the financial sector should be rescued because the rich create jobs and ‘drive the economy’('trickle down’).
Democrats split on how much time they have before the situation gets even worse, how ’socialist’ they should be, and how their actions now will affect their prospects in 2010.
Obama also has to balance the near political future with the political present and the pragmatic present.
It has not been all-hands on deck in large part because there’s no majority agreement amongst those with immediate power as to how fast the ship is sinking, where the holes are or how many resources should be committed to baling out the water, how many should be staunching the leaks, and with what materials.
From where I sit Obama and the Dems have paid too much attention to intra-party and inter-party politics ion the best way to keep the ship afloat and rescue as much of its goods and passengers whilst the GOP has done the same but with goal of either using the exact same navigational tools and charts that drove the ship onto the rocks in the first place, or else letting the ship sink under ‘Captain Obama’ so they can blame him and the Democrats for the entire ‘misadventure’.
But if I were actually in Obama’s position, what would I do?
I’d like to think I’d issue commands and lash anyone who didn’t obey–Hoist the mizzen! Charge the guns! Do or die! and all that jazz.
But that kind of boldness usually only succeeds in movies, or on a small scale.
I had a couple of doubts about Obama when I voted for him, the most significant of which was his philosophically and morally admirable bipartisan rhetoric. I’d say being generous to a fault is his biggest weakness; I don’t think he can afford it, nor can the majority of the country at the moment.
Still, one mustn’t forget he’s inherited two wars, a financial crisis not seen in at least 60 years as well as evident global climate change, a health care crisis, and other issues that the previous administration has exacerbated through negligence and dogmatic denial.
I’m still satisfied that Obama has the skills and wherewithal to significantly mitigate these major issue and that he was the best choice. (I had some issues with Hillary too, who was my primary favorite but I don’t know if she’d have done any better thus far, and may well have done worse—we’ll never know anyway).
Clearly though the ‘blame-Obama’ meme has some grip, if not motive traction because while the administration has changed, the mass media reportage hasn’t, and the situation we are all in is not being described with much intellectual or empirical discipline.
The Republicans created this awful mess, Obama is trying to deal with it with the tolls he;s been given . That’s the bottom line, and that’s a change I can still believe in–unlike Bush and the GOP who shouted Land Ho! whilst they drove us onto the rocks in pursuit of El Dorado and Atlantis.
March 18th, 2009 at 1:23 pm5th Estate,
March 18th, 2009 at 1:50 pmAs always, another excellant post!
Thank you.
Please somebody, tell me why Nancy Pfotenhauer is appearing all over the Cableosphere???? Is she still speaking for Grampa McNasty?
March 18th, 2009 at 1:54 pmRandomChaos As always, another excellent post!
That’s very kind of you! When I write a long comment it’s really a debate with myself, a soliloquy if yo will . If it comes across as generally rational, then that’s a good thing.
March 18th, 2009 at 2:18 pmFLASHBACK:
Is this the same obama that signed the stimulus package that HAD THE CLAUSE that guaranteed that the bonuses would be paid? You know, the same clause that Democrat Chris Dodd put in http://www.liveleak.com/view?i=b63_1237304298&c=1 . THE SAME BAIL OUT THAT GEITHER STRUCTURED FOR AIG? http://topics.nytimes.com/topics/reference/timestopics/people/g/timothy_f_geithner/index.html
I love it when politicians screw up and then scramble to point the finger at everyone else. What is even worse is that the political dolts like Barney Frank, Chris Dodd, and obama are feigning outrage in an effort to direct the peoples anger at AIG employees.
Folks, your anger should really be directed at the incompetent government politicians who…
A) installed the clause to allow these bonuses to be paid
B) did not read the bill BEFORE they signed it
Unbelievable incompetence is rampant in this government.
March 18th, 2009 at 3:19 pmchat chat chat
March 18th, 2009 at 9:27 pmYou suck….
Oh and Hi Tim43…
March 18th, 2009 at 9:27 pmUsual MO, the RepubliCons cause the problems; then they try to blame everyone else.
March 18th, 2009 at 10:07 pm