Today's AIG hearing

[gsabc]

I do have a serious question, though, which I hope someone actually asks instead of just emitting outraged bloviating for the constituents. In which division of AIG do/did the bonus recipients work? Many sections of the company were profitable. I see no good reason why employees in those divisions shouldn't be rewarded if they did good work. If, however, anyone receiving this largesse worked for the division which nearly bankrupted the company, no amount of legalese in their contracts can justify a bonus IMO.

Disclosure: GW works for a company which went through a similar situation. Her division was very profitable, as were many of the others. One division, unfortunately the darling of the directors, was miserable and possibly fraudulent in their work, and destroyed the company. The business divisions were sold off piecemeal, and GW's division was bought for a pittance, though by a private investor and not by the government. The fraudulent division took themselves private, which may have been their intent since many of the employees felt the rest of the company was useless anyway. They are surprisingly still around, though significantly smaller in size than they were when the parent company was chopped up.

[sunflower]

I do have a serious question, though, which I hope someone actually asks instead of just emitting outraged bloviating for the constituents. In which division of AIG do/did the bonus recipients work? Many sections of the company were profitable. I see no good reason why employees in those divisions shouldn't be rewarded if they did good work. If, however, anyone receiving this largesse worked for the division which nearly bankrupted the company, no amount of legalese in their contracts can justify a bonus IMO.

Disclosure: GW works for a company which went through a similar situation. Her division was very profitable, as were many of the others. One division, unfortunately the darling of the directors, was miserable and possibly fraudulent in their work, and destroyed the company. The business divisions were sold off piecemeal, and GW's division was bought for a pittance, though by a private investor and not by the government. The fraudulent division took themselves private, which may have been their intent since many of the employees felt the rest of the company was useless anyway. They are surprisingly still around, though significantly smaller in size than they were when the parent company was chopped up.

That IS a good question. I had a friend who worked for American Express in a profitable division, while others were laying off and cutting costs. Her division still received bonuses and raises because they operated somewhat independently from each other. So that is definitely a good point. I have said it all along, the insurance operations of AIG are still strong, it's just a matter if they can hold their heads above water with everything long enough to prove that.

[Jeemie]

I do have a serious question, though, which I hope someone actually asks instead of just emitting outraged bloviating for the constituents. In which division of AIG do/did the bonus recipients work? Many sections of the company were profitable. I see no good reason why employees in those divisions shouldn't be rewarded if they did good work. If, however, anyone receiving this largesse worked for the division which nearly bankrupted the company, no amount of legalese in their contracts can justify a bonus IMO.

Disclosure: GW works for a company which went through a similar situation. Her division was very profitable, as were many of the others. One division, unfortunately the darling of the directors, was miserable and possibly fraudulent in their work, and destroyed the company. The business divisions were sold off piecemeal, and GW's division was bought for a pittance, though by a private investor and not by the government. The fraudulent division took themselves private, which may have been their intent since many of the employees felt the rest of the company was useless anyway. They are surprisingly still around, though significantly smaller in size than they were when the parent company was chopped up.

Some people are saying the bonus recipients were working in profitable divisions.

This is the problem when government gets too deeply involved with the operation of a business.

[MarleysGh0st]

Since I gave bondguy a hard time about this the other day, I have to give you a hard time, too.

Where's your WGAS option?

[gsabc]

Since I gave bondguy a hard time about this the other day, I have to give you a hard time, too.

Where's your WGAS option?

Not applicable. We should all give one.

If only to throw at the employees of AIG's bad division.

[silverscreenselect]

Some people are saying the bonus recipients were working in profitable divisions.

This is the problem when government gets too deeply involved with the operation of a business.

When they have layoffs, they don't usually sit down and analyze whether people were in "profitable" divisions before they laid them off.

These were supposed to be retention bonuses to keep people around, but 11 out of the 73 who got $1 million or more are no longer there. The rationale is that they are the only ones who know how to "unwind" the derivatives. Well, they sure screwed up when they wound the derivatives in the first place to the tune of billions of losses. What makes anyone sure they could do better given a second shot? If I were running AIG, I'd feel better promoting junior people or hiring people from successful firms with the promise of big bonuses IF AND ONLY IF they turned things around.

What is even more galling is that these idiots who left AIG are being hired for big bucks at other places. What makes anyone think the same thing can't happen again? If you do what you've been doing, you'll continue to get the results you've been getting. When I was growing up and baseball only had 16/20 teams, losers like Kansas City, Cleveland, and the Cubs would routinely fire their managers and then hire guys who had been fired by other losing teams two and three times already. Naturally, those bozos kept losing and their teams stayed in the basement. It's the same thing going on here.

Our current executive compensation system has turned corporate execs into our version of European aristocracy, where titles (CEO, CFO, etc.) entitle them to continuing wealth and income regardless of anything they ever do. The statement that these people are the only ones who can get their companies out of the mess is the equivalent of King Louis saying he was the state.

[ulysses5019]

Since I gave bondguy a hard time about this the other day, I have to give you a hard time, too.

Where's your WGAS option?

I don't GAS about the WGAS option.

[Jeemie]

Some people are saying the bonus recipients were working in profitable divisions.

This is the problem when government gets too deeply involved with the operation of a business.

When they have layoffs, they don't usually sit down and analyze whether people were in "profitable" divisions before they laid them off.

These were supposed to be retention bonuses to keep people around, but 11 out of the 73 who got $1 million or more are no longer there. The rationale is that they are the only ones who know how to "unwind" the derivatives. Well, they sure screwed up when they wound the derivatives in the first place to the tune of billions of losses. What makes anyone sure they could do better given a second shot? If I were running AIG, I'd feel better promoting junior people or hiring people from successful firms with the promise of big bonuses IF AND ONLY IF they turned things around.

What is even more galling is that these idiots who left AIG are being hired for big bucks at other places. What makes anyone think the same thing can't happen again? If you do what you've been doing, you'll continue to get the results you've been getting. When I was growing up and baseball only had 16/20 teams, losers like Kansas City, Cleveland, and the Cubs would routinely fire their managers and then hire guys who had been fired by other losing teams two and three times already. Naturally, those bozos kept losing and their teams stayed in the basement. It's the same thing going on here.

Our current executive compensation system has turned corporate execs into our version of European aristocracy, where titles (CEO, CFO, etc.) entitle them to continuing wealth and income regardless of anything they ever do. The statement that these people are the only ones who can get their companies out of the mess is the equivalent of King Louis saying he was the state.

This is exactly why the government shouldn't get involved- so companies that behave in such an asinine manner go down.

I'm tired of hearing "too big to fail".

[MarleysGh0st]

Since I gave bondguy a hard time about this the other day, I have to give you a hard time, too.

Where's your WGAS option?

Not applicable. We should all give one.

Immaterial. The WGAS option is a sacred Bored tradition!

No Bored Poll is valid without one!

[earendel]

Some people are saying the bonus recipients were working in profitable divisions.

This is the problem when government gets too deeply involved with the operation of a business.

When they have layoffs, they don't usually sit down and analyze whether people were in "profitable" divisions before they laid them off.

These were supposed to be retention bonuses to keep people around, but 11 out of the 73 who got $1 million or more are no longer there. The rationale is that they are the only ones who know how to "unwind" the derivatives. Well, they sure screwed up when they wound the derivatives in the first place to the tune of billions of losses. What makes anyone sure they could do better given a second shot? If I were running AIG, I'd feel better promoting junior people or hiring people from successful firms with the promise of big bonuses IF AND ONLY IF they turned things around.

What is even more galling is that these idiots who left AIG are being hired for big bucks at other places. What makes anyone think the same thing can't happen again? If you do what you've been doing, you'll continue to get the results you've been getting. When I was growing up and baseball only had 16/20 teams, losers like Kansas City, Cleveland, and the Cubs would routinely fire their managers and then hire guys who had been fired by other losing teams two and three times already. Naturally, those bozos kept losing and their teams stayed in the basement. It's the same thing going on here.

Our current executive compensation system has turned corporate execs into our version of European aristocracy, where titles (CEO, CFO, etc.) entitle them to continuing wealth and income regardless of anything they ever do. The statement that these people are the only ones who can get their companies out of the mess is the equivalent of King Louis saying he was the state.

This is exactly why the government shouldn't get involved- so companies that behave in such an asinine manner go down.

I'm tired of hearing "too big to fail".

In an ideal world I'd agree with you, but given the incestuous relationships among the various financial institutions these days, if one fails, then all fail, and the results would be catastrophic. It's rather like the keiratsu of Japan, IMO.

[ulysses5019]

Since I gave bondguy a hard time about this the other day, I have to give you a hard time, too.

Where's your WGAS option?

Not applicable. We should all give one.

Immaterial. The WGAS option is a sacred Bored tradition!

No Bored Poll is valid without one!

This thread bores me.

[christie1111]

Not applicable. We should all give one.

Immaterial. The WGAS option is a sacred Bored tradition!

No Bored Poll is valid without one!

This thread bores me.

I thought for a couple of minutes, that may Uly had just picked an avatar to make the hunt futile.

But me thinks this is it.

[MarleysGh0st]

Not applicable. We should all give one.

Immaterial. The WGAS option is a sacred Bored tradition!

No Bored Poll is valid without one!

This thread bores me.

So the WGAS option should suit your mood perfectly!

[Jeemie]

In an ideal world I'd agree with you, but given the incestuous relationships among the various financial institutions these days, if one fails, then all fail, and the results would be catastrophic. It's rather like the keiratsu of Japan, IMO.

Then maybe it's time to burn the financial house down and rebuild it.

That the financial world has long forgotten to distinguish between legitimate economic activity and paper fantasies has set our economy up to be systematically looted by those who know how to game the system.

Let the system burn, and go out and find the guilty ones who are looting us, and bring them to justice.

[earendel]

In an ideal world I'd agree with you, but given the incestuous relationships among the various financial institutions these days, if one fails, then all fail, and the results would be catastrophic. It's rather like the keiratsu of Japan, IMO.

Then maybe it's time to burn the financial house down and rebuild it.

That the financial world has long forgotten to distinguish between legitimate economic activity and paper fantasies has set our economy up to be systematically looted by those who know how to game the system.

Let the system burn, and go out and find the guilty ones who are looting us, and bring them to justice.

If you have a way to disentangle the financial world from the rest of the world, go to it. But it seems to me like trying to get rid of roaches by burning down one row house in the middle of a block of row houses - how do you keep the flames from spreading and burning down the entire block?

[Jeemie]

In an ideal world I'd agree with you, but given the incestuous relationships among the various financial institutions these days, if one fails, then all fail, and the results would be catastrophic. It's rather like the keiratsu of Japan, IMO.

Then maybe it's time to burn the financial house down and rebuild it.

That the financial world has long forgotten to distinguish between legitimate economic activity and paper fantasies has set our economy up to be systematically looted by those who know how to game the system.

Let the system burn, and go out and find the guilty ones who are looting us, and bring them to justice.

If you have a way to disentangle the financial world from the rest of the world, go to it. But it seems to me like trying to get rid of roaches by burning down one row house in the middle of a block of row houses - how do you keep the flames from spreading and burning down the entire block?

I don't have a good way- no matter what we do, it will be painful.

[earendel]

Then maybe it's time to burn the financial house down and rebuild it.

That the financial world has long forgotten to distinguish between legitimate economic activity and paper fantasies has set our economy up to be systematically looted by those who know how to game the system.

Let the system burn, and go out and find the guilty ones who are looting us, and bring them to justice.

If you have a way to disentangle the financial world from the rest of the world, go to it. But it seems to me like trying to get rid of roaches by burning down one row house in the middle of a block of row houses - how do you keep the flames from spreading and burning down the entire block?

I don't have a good way- no matter what we do, it will be painful.

Painful is one thing - catastrophic is another. The Great Depression led to WWII; if we have another world-wide depression of that magnitude, well, maybe the roaches will inherit the earth after all.