Congress Does Something

The House actually did something. Reuters reports,

Responding to public and political outrage to the bonuses after the insurer received a government bailout up to $180 billion, lawmakers voted 328-93 for a bill to impose a 90 percent tax on bonuses for executives whose incomes exceed $250,000.

The tax would apply to executives of any company that received at least $5 billion in government bailout money.

From the Associated Press:

In all, 243 Democrats and 85 Republicans voted “yes” on the bill. It was opposed by six Democrats and 87 Republicans. . . . although a number of Republicans cast “no” votes against the measure at first, there was a heavy GOP migration to the “yes” side in the closing moments.

The six Dems who voted “no” were Bean, Kissell, McMahon, Minnick, Mitchell and Snyder. If any of those congress critters are your’n, tell ’em what you think.

As I keyboard, the 85 Republicans who voted “yes” are drafting a letter of apology to Rush Limbaugh.

At the Washington Post, Brady Dennis writes about the bonus babies of AIG, huddling in their office building feeling misunderstood.

The handful of souls who championed the firm’s now-infamous credit-default swaps are, by nearly every account, long since departed. Those left behind to clean up the mess, the majority of whom never lost a dime for AIG, now feel they have been sold out by their Congress and their president.

“They’ve chosen to throw us under the bus,” said a Financial Products executive, one of several who spoke on condition of anonymity, fearing reprisals. “They have vilified us.”

They say what is missing from this week’s hysteria is perspective. The very handsome retention payments they received over the past week were set in motion early last year when the firm’s former president, Joe Cassano, was on his way out the door. Financial Products was already running into trouble on its risky credit bets, and the year ahead looked grim. People were weighing offers from other firms, and AIG executives feared that too many departures could lead to disaster.

I remember reading that Marie Antoinette had a new dress made to wear at her beheading. That may not be true, but for some reason it pops into my mind.

Listen, guys, “disaster” has already arrived. The ship has struck the iceberg. Just because the water hasn’t reached the upper decks yet doesn’t mean life can go on as usual. It’s time to put down the brandy and cigars and work with the rest of us to keep the boat afloat, or else we’re all going to end up in the water grabbing for ice floes. Is that clear?

7 thoughts on “Congress Does Something

  1. You can use Associated Press clips now? I thought you had a bit of a falling out with them, regarding their idiotic (perhaps formerly) rules regarding copyright infringement. I know that I have entirely missed the point of your article, and I do apologize, it was just surprising to see an AP clip.

  2. There may be a ‘positive’ to emerge from this economic mess and that is, finally, Congress exposed as the failed institution it has become. Wall Street has – with the exception of the Bernard-types – done nothing illegal in the process of amassing its billions. Congress, always with an eye on its campaign coffers, gave the financial firms the green light to make those billions and they simply ran with it.

    Congress’s feigned indignation at the behavior of financial firms is laughable given that without the go-ahead light from Congress it couldn’t have happened. Congress is, finally, the real culprit and I think the American people get it, don’t like it and may finally take steps toward reforming the institution.

  3. The thing that gets me about this is that, if AIG had gone into bankruptcy, someone would have taken that retention bonus contract (or “those contracts,” as appropriate) and redone them, as a careful steward of the company, recognizing that the money that normally goes to salaries and bonuses is no longer “the company’s”.

    Would there be bonuses? Probably.

    But I saw a chart yesterday. Of that $165 million figure, it showed that a clear majority was to be paid in chunks of more than a million dollars each. And at that point, I ceased to be impressed by any of the people whining about those who might have to do without their bonuses.

  4. I’m accustomed to working on projects and efforts that are larger than a single person so I cannot get my head around people who are so indispensible that they must be fixed-in-place by bonuses of millions of dollars. Most companies would decide to save money through redundancy so that if one quit there would be enough redundancy in the form of other workers to take up the slack.

    Then they would only need to fear a strike. Well, they could still strike I suppose. Can anyone explain why these people or their functions are any more indispensible than…say, air traffic controllers?

    Is anyone really even trying to make the case for why we would not be able to survive their ruffled feathers?

    However, given our tendency to vent and our need for simple one-dimensional villians we are once again lunging for the most readily available scapegoats. Much more of our future tax money given to AIG was given to foreign financial institutions than to bonuses.

    Barney Frank makes the argument that, in a sense, the taxpayers “own” the bailed out corporations. “In a sense” is just a little too open-ended for me. This is yet another reason why something should have been nailed down…with this nebulous sense of ownership firmed up a bit. Hmmmm…maybe I will only “in a sense” pay my taxes come April.

  5. Just because the water hasn’t reached the upper decks yet doesn’t mean life can go on as usual. It’s time to put down the brandy and cigars and work with the rest of us to keep the boat afloat, or else we’re all going to end up in the water grabbing for ice floes. Is that clear?

    You obviously have forgotten the scene in The Titanic when everyone was getting into the lifeboats. The MEN from the first class cabins were tossing the WOMEN and CHILDREN from the 2nd and 3rd class cabins out of the life boats they had situated in, into the freezing Atlantic waters, and placing themselves in those previously occupied seats.

    To me a redux of that is far more likely than a putting down of brandy and cigars. Do you actually think they give two hoots about the common good? What is your evidence? Only if it is to keep them out of jail or away from vigilante squads…

  6. Say it stvwlf! It is only smart to understand the true nature of those who we are up against. This is no time to make nicey-nice with these wolves. It’s possible to do two things at once. Dictate to them the terms under which they will live along with the rest of us (formerly known as regulation but actually only standards and laws) AND stimulate the economy AND see that the guilty are not rewarded with free money that they can spend any way they choose.

    Ooops that’s 3 things so Obama will have to multitask. Maybe Michelle can help him.

    Interesting and timely article titled The Art of The Distraction in today’s NYTimes about how easily we can be distracted by the side-story of AIG bonuses which, in the grand schema of things, is just a nit.

    The article quotes Obama’s senior adviser, David Axelrod as lamenting:

    This is the kind of issue that Washington chases like catnip. What would be a mistake would be to get so distracted by the catnip-chasers that we lose our own path.”

    Then after fleshing out various aspects of people’s desire for closure, reduction of everything to simple good and evil, the need for blame etc. the article closes with another quote from Axlerod:

    He has a difficult job because he has to explain to the American people, who are furious, why we need to maintain a strong functioning system of credit so that people can get loans, businesses can get loans. A the same time, he has to explain to Wall Street why people are legitimately outraged by what they have done. “

    I wonder whether some of the criticisms of Obama as OBambi made during the campaign were not prescient. The sense of balance inherent in those remarks seems a bit out of kilter to me. Let me see…the financial future of families and even their elderly parents vs. the lesson in self-awareness of a small clique of filthy rich greedy bastards and those they owned (who’d like for us to forget) in Congress so that they will get together, sing cum-ba-yah and behave more nicely on their own without having to be coerced into it.

    This type of message just proves they still don’t get it and that they don’t believe a sufficient number of us are focused on the real problem and its resolution rather than the side-show.

    Personally, I think the article takes a dim view of the depth of the pulbics concern by focusing on the most base of all possible reactions to a serious problem. It seems a negative interpretation at best.

    What’s wrong with people wanting some security in life not at the mercy of a greedy few, with wanting the laws in palce to make them safe, and for those who dismantled those laws and for those who lobbied them to do so be punished…not for revenge but as an example of what will be done in the future to those who try to do the same…in order to make us all safer.

    It couldn’t be that, could it?

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