Author Topic: Congress Passes Bill To Tax AIG Bonuses!  (Read 8481 times)

Uccmal

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #10 on: March 19, 2009, 02:51:31 PM »
I agree that Liddy is getting a bum rap.  I am surprise he didn't just say:

F-u, I am doing this to help out the good old USA.  You, either want my help, or you dont. 

He should have shunted it back to Congress and said:  You guys bought the company, not me.

GARP tending toward value


JAllen

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #11 on: March 19, 2009, 02:53:06 PM »
I wish they were more concerned with the imminent P&C losses from them writing Florida homeowner's policies way/$3,000 cheaper than everyone else among other travesties that wouldn't surprise me.

They and the public are up in arms about $150M when it's a ~trillion dollar company and they own 80% of it!  Shouldn't they be more concerned with the ongoing operations (or at least mention them every once in a while?!?!?

Why wasn't AIG put into runoff the day after they were initially bailed out?

Why would a tax payer want $160M of their money go to pay bonuses to the group who nearly crashed the financial system? It's their money that's bailing out the company, they should have some say in the matter.


I'm not saying that they deserve bonuses.  I just wished someone might mention the current activities of the business which dwarf the bonuses in importance and provide a much much much larger threat to the wallet of American Taxpayers if the future losses are being increased by AIG writing policies at $.30.


ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #12 on: March 19, 2009, 02:58:49 PM »
Bonuses should only be given out if the business is profitable. In this case, it clearly is not.


So if GenRe had blown up then the managers as See's Candies don't deserve a bonus?


Would Berkshire Hathaway be 80% taxpayer owned? If so, it would be the taxpayer's decisions, as in that case, they are the true owners of the business (not the executives).

Executive compensation should be something controlled by shareholders -- read Icahn's speeches on this issue if you feel otherwise.





Thing is, it's got nothing to do with percentage of ownership.

Is Wells Fargo 80% owned by taxpayers?  No, it isn't.  So why does it also apply to them?

People seem to forget that this wasn't a bailout of the companies, but rather a bailout of everyone (averting a systemic collapse).  I can see Buffett's point about shipbuilders in WWII -- they made millions in profits from taxpayer dollars, but we needed them to win the war.



The bill would impose a 90 per cent tax on bonuses given to employees with family incomes above $250,000 (U.S.) at American International Group and other companies that have received at least $5-billion in government bailout money.

Uccmal

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #13 on: March 19, 2009, 03:09:41 PM »
I can see Buffett's point about shipbuilders in WWII -- they made millions in profits from taxpayer dollars, but we needed them to win the war.

Yes but, you dont need the individuals or AIG to win the war.  You only need to clean the mess up in an orderly fashion. 

A better analogy would be the Exxon Valdez, where uncounted volunteers, and some clean up companies (externally provided and payed for by Exxon's insurers), did the dirty work while Exxon staff stood by, or in one case were fired and CHARGED for negligence.

Using the analogy of war... perhaps the AIG executives should be charged with Treason instead of getting bonuses.
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ExpectedValue

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #14 on: March 19, 2009, 03:14:54 PM »
"Thing is, it's got nothing to do with percentage of ownership.

Is Wells Fargo 80% owned by taxpayers?  No, it isn't.  So why does it also apply to them?"


They don't have to keep the money that was given to them, they can pay it back and those restrictions would be lifted. If they didn't need the money in the first place, they should be able to pay it back rather promptly.

ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #15 on: March 19, 2009, 03:17:42 PM »
I can see Buffett's point about shipbuilders in WWII -- they made millions in profits from taxpayer dollars, but we needed them to win the war.

Yes but, you dont need the individuals or AIG to win the war.  You only need to clean the mess up in an orderly fashion. 

A better analogy would be the Exxon Valdez, where uncounted volunteers, and some clean up companies (externally provided and payed for by Exxon's insurers), did the dirty work while Exxon staff stood by, or in one case were fired and CHARGED for negligence.

Using the analogy of war... perhaps the AIG executives should be charged with Treason instead of getting bonuses.


This sounds more like the Stalin method of war -- just shoot all the officers in a great purge.

My method of war is to fire the ones responsible for the disaster but continue to offer incentive/retention bonuses to the executives that are outperforming.  Merit based pay, in other words.

ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #16 on: March 19, 2009, 03:21:03 PM »
"Thing is, it's got nothing to do with percentage of ownership.

Is Wells Fargo 80% owned by taxpayers?  No, it isn't.  So why does it also apply to them?"


They don't have to keep the money that was given to them, they can pay it back and those restrictions would be lifted. If they didn't need the money in the first place, they should be able to pay it back rather promptly.



I don't think I would want to do business with anyone that can add restrictions to a deal months after it was struck.

Would you treat me that way if I had taken a personal loan from you?  Is that your ethics?

ericd1

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #17 on: March 19, 2009, 03:25:40 PM »
I find it difficult to believe the derivatives were so specialized that "managing them" was required. Another firm, or new employees could have been "managed" the run-off.  The Fed could have hired Buffett, he has experience doing just that!

Am I missing something?


ExpectedValue

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #18 on: March 19, 2009, 03:28:19 PM »
"Thing is, it's got nothing to do with percentage of ownership.

Is Wells Fargo 80% owned by taxpayers?  No, it isn't.  So why does it also apply to them?"


They don't have to keep the money that was given to them, they can pay it back and those restrictions would be lifted. If they didn't need the money in the first place, they should be able to pay it back rather promptly.



I don't think I would want to do business with anyone that can add restrictions to a deal months after it was struck.

Would you treat me that way if I had taken a personal loan from you?  Is that your ethics?

Banks depend on confidence. If confidence dries up they're in no position to bargain.

ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #19 on: March 19, 2009, 03:30:44 PM »
They don't have to keep the money that was given to them, they can pay it back and those restrictions would be lifted. If they didn't need the money in the first place, they should be able to pay it back rather promptly.

The whole point of giving a company like Wells Fargo money was to encourage them to lend.  They claim to have increased their lending by about $80b because of the new TARP capital.

So, you say they can just give it back right?  How?  Are they going to force their customers who borrowed money to return it to them?

This is outrageous.  A deal is a deal.