Monday, March 16, 2009

More AIG

Robert Reich on the argument that the AIG bonuses are necessary to retain talented executives: "And any mention of the word 'talent' in the same sentence as 'AIG' or 'credit default swaps' would be laughable if laughing weren't already so expensive."

Reich also points out that the argument that the company is contractually-obligated to pay the bonuses rings false because, had the company gone into bankruptcy, as it would have without the government handout, err, bailout, claims for bonuses would have come behind those of secured creditors--which is to say they would have been wiped out--and that the people now feeding at the trough would have been out on the street.

Reich concludes:
But if our very own Secretary of the Treasury doesn't even learn of the bonuses until months after AIG has decided to pay them, and cannot make stick his decision that they should not be paid, AIG is not even accountable to the government. That means AIG's executives -- using $170 billion of our money, so far -- are accountable to no one.
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On a related topic: Was Larry Summers' broadside at AIG on George Stephanopolous' show yesterday aimed at Tim Geithner as much as at the company? Is Summers setting himself up to be the next Treasury Secretary, when the President decides that Geithner is not ready for prime time? (He sure hasn't looked it so far.)

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