Monday, March 16, 2009

Obama: How Do They Justify This Outrage?

Obama, AIGDominating the news cycle this weekend was news that AIG had issued over $160 million in bonuses to its executives. What's the big deal? Well, the American taxpayers own 80% of AIG. (Image: Huffington Post) So it seems the American people are generally angry over this news. In fact, CNN recently ran a (censored) shock-profanity headline to represent the American people's sentiment on the bonuses.

Well, let's go over the reason people are annoyed:

  • AIG invested in risky assets seeking a high return
  • These practices contributed to everyone's market losses
  • Taxpayers are keeping AIG afloat
  • AIG is spending on vacation retreats and bonuses for execs
I guess I can see why people might find this more than a bit annoying. What can be done about it? Well, it seems not much. Some pundits have discussed attacking the bonuses by way of IRS-headed taxation to retrieve the funds or flat-out lawsuits, but none of the options seem to offer an easy, cheap solution.

AIG claims that it had no option but to pay the bonuses because it was contractually obligated to do so. Generally speaking, most people don't seem to care that it could have cost more to the taxpayer if AIG had to fight lawsuits from executives, if they didn't pay those bonuses. I understand the frustration, and I don't want to defend the mess that is AIG, but there is some reason behind their defense.

The mainstream media seems to care less about this and more about calling for AIG executives to be fired. I find it quite silly overall because, if I was one of those executives at AIG, I would know that I shouldn't take that bonus. No one working as an executive at AIG or any other major company needs a big pay-day right now. They're not the ones suffering in the recession.

Obama was willing to join the pile-on during a press-event today. At least he made it official that the government is on the case.