Tuesday, March 17, 2009

The Financial Crisis Game Show (Bonus Round)

by Dick Mac

American International Group (AIG) has used bailout money (i.e., welfare payments) to distribute bonus money it owes to the executives who ran the company into the ground.

Let's recap:

Our economy tanked (uh-oh).

It was determined that some financial institutions controlled a greater portion of the economy than you would have thought (thank you Reaganomics and deregulation).

In order to prevent a catastrophic collapse of the entire economic system that drives Western Civilization, American tax dollars were paid to keep some large companies afloat (save America).

It didn't work well, because the companies took the money and didn't tell us what they were doing with it, and the government insisted on no accountability (stupid).

So we pumped another trillion dollars into the economy (welfare benefits for rich guys).

AIG took some of that money and paid massive bonus payments to the executives who failed their shareholders (obvious end-result).

See, it all works out:

(thank you Reaganomics and deregulation)
(uh-oh)
(save America)
(obvious end-result)
(welfare benefits for rich guys)
(stupid)

President Obama wants his staff to try to get some of that bonus money back. They won't, but it makes for good headlines.

AIG insists that they are contractually obligated to pay the bonuses. Well, the AIG that signed those contracts no longer exists and the new AIG doesn't have the money to pay those bonuses, so the money should never have been paid out. If those executives believe they are entitled to that money, they should have to sue AIG in ope court and explain a few things about what they did with the previous money they had in their coffers.

Most people have no right to be upset about this.

Many voted for Ronald Reagan (twice) and he promised he would deregulate industry and get the government off our backs.

This is what he meant.

This is what Reaganomics was designed to do.

This is what you asked for if you ever voted for Reagan or any Republican who came after him, at any level of government, in any part of the nation, from dog catcher to President.

So, if you've ever voted for a Republican since 1980, you have nothing to complain about. You are enjoying the fruits of your labor.

Here's a story about the laugh-riot that is Obama demanding that welfare recipients repay the government:

Obama in Effort to Undo Bonuses at A.I.G.






1 comment:

Real Estate Agent in Vancouver said...

Nice post, well explained. Unfortunately very true. I don't understand some of the things governments can do. Provide money for companies in need and don't ask what the money is for seems kind of ignorant. People are naturally greedy so of course when given lots and lots of money and assured that nobody will ask what the money has been spent one, people get greedy and keep most of the money for themselves. Waste of money, no help in the current crisis.

Take care, Jay