Minnick: Let A.I.G. Go Bankrupt

109 comments on this post so far. Add yours!

• 

  Cabbage Boy on March 18 at 9:05 a.m.

  I am liking Minnick more and more each day.

• 

  MikeK on March 18 at 9:13 a.m.

  There is a reason that bankruptcy laws exist - to attempt to methodically and fairly restructure debt when debtors get too far over their heads. I agree with Walt - trying to have taxpayers continue to fund and manage this company’s upside down obligations in the midst of a financial, political, and public relations hurricane is not going to work.

• 

  keithincda on March 18 at 9:16 a.m.

  This is a good and smart elected official talking common sense.

• 

  BrandonHansen on March 18 at 9:26 a.m.

  I’m hope all their execs used their million dollar bonuses for flights out of the country.

  Brandon Hansen
  Just South of North
  www.justsouthofnorth.com

• 

  JeanC on March 18 at 9:27 a.m.

  GO MINNICK!!!!!! I was saying before the bailout that we should let them fail. It was a mistake giving all those companies a bailout in the first place and AIG is now showing how big a mistake it was.

• 

  Fishwife on March 18 at 9:41 a.m.

  So, is Minnick willing to gamble that the house of cards collapses entirely? His statement is political pandering of the worst kind.

• 

  Kage_Mann on March 18 at 9:47 a.m.

  Wow, if he keeps this up, I’d even consider voting for Walt next time.You get the impression he’s not completely,sold on the democratic party ideas.

• 

  GaryIngram on March 18 at 9:48 a.m.

  We got lucky notwithstanding the partiasn support for Minick from the likes of ThomG or his cohort Kennedy. Minick, an outstanding Republican thinking Democrat.

• 

  Sisyphus on March 18 at 9:52 a.m.

  Walt is keeping his campaign promises and earns kudos for it. But its a Herbert Hoover move. Hoover let all the banks fail until FDR defeated him in 1932. But by then it was too late, massive foreclosures, no credit, no capital, no market, no economy. Which explains why FDR defeated him overwhelmingly.

  With AIG, what we got here is a failure to communicate. Time to put the taxpayer in the drivers seat. If not, then I’d agree with Walt.

• 

  JBelle on March 18 at 9:53 a.m.

  Minnick’s the man when many refuse to be.

• 

  toadman on March 18 at 9:53 a.m.

  Well said Sis..

• 

  Kage_Mann on March 18 at 10:02 a.m.

  FDR extended the economic downturn into a depression, with all his social programs and the taxation of americans.Under FDR unemployment rose to a staggering 23% and it was WW11, not FDR who got us out of the depression.

• 

  Fishwife on March 18 at 10:02 a.m.

  Bank of America received billions in bailout money. Their exec’s also received end of year bonuses.
  So, why isn’t Minnick complaining about those bonuses? Maybe AIG should have given Minnick $6900 as well.

  From OpenSecrets.Org:

  Walter Clifford Minnick (D)
  Contributor Total
  ActBlue $42,450
  Trilogy Partnership $12,000
  AmeriPAC: The Fund for a Greater America $10,000
  Communications Workers of America $10,000
  International Assn of Fire Fighters $10,000
  Laborers Union $10,000
  Machinists/Aerospace Workers Union $10,000
  National Air Traffic Controllers Assn $10,000
  National Education Assn $10,000
  National Leadership PAC $10,000
  United Transportation Union $10,000
  Trilogy Partners $9,200
  Wycoff Farms $7,600
  Bank of America $6,900
  Primary Health $6,400
  Monrovia Growers $6,100
  Cmte for a Livable Future $6,000
  Intl Brotherhood of Electrical Workers $6,000
  Ropes & Gray $5,523
  IDACORP Inc $5,250

• 

  Aliasjax on March 18 at 10:04 a.m.

  Fishwife is right, I think. This is populist BS.

  The Govmnt gave AIG money to pay its bills, it shouldn’t have but it did. AIG owes this money to its employees. The pres and congress are excoriating a hundred employees of this company so as to make a few million losers feel better about their own lives and to secure their vote.

  Minnick was right to oppose the bailouts, but our side lost and the money was doled out. Passing legislation now to deny compensation to some employees of one company is a HORRIBLE abuse of state power and should send shivers down our collective spines.

• 

  hmoffsuite on March 18 at 10:09 a.m.

  If bonus money gets under your skin, how about the huge money paid to the execs of Fannie Mae and Freddie Mac? Those boys were real close to Obama and the administration. Barney, Dodd, Schumer et all. And, fwiw, friends of Obama.

• 

  JBelle on March 18 at 10:11 a.m.

  You know, AJ, I think what everyone is looking for is an indication of the right thing being done. And if AIG refuses to do the right thing, people will want to take the law into their own hands. This happens time and again in history when people feel helpless and disenfranchised. By any measure, what AIG has done is a moral outrage. I think of the school teachers in the country, heck, THE EMPLOYEES OF COWLES PUBLISHING, who all waived their right to a raise irrespective of contracts in place or who took a paycut irrespective of the contracts in place because under the existing dire conditions, it was the right thing to do. And few, if any, of these folks make more than $70,000 per year. By the way, what separates AIG from Bernie Madoff, other than indictments?

• 

  hmoffsuite on March 18 at 10:20 a.m.

  I think the AIG bonuses should be paid in AIG stock. Let them enjoy the fruits of their labor. :~)

• 

  Cabbage Boy on March 18 at 10:23 a.m.

  FDR just continued Hoover’s spending. Much like Obama has just expanded Bush’s spending. We are heading for a depression if we watch our historical markers.

• 

  JBelle on March 18 at 10:24 a.m.

  sooooooo hos: you’re really Paul Fish? posing as an investor summering in Coeur d’Alene? very, very wise and astute solution that neatly ties up a number of different loose ends. ;)

• 

  hmoffsuite on March 18 at 10:33 a.m.

  Paul Fish?

• 

  Aliasjax on March 18 at 10:36 a.m.

  JBelle, The moral outrage should be if AIG didn’t pay its employees, not that it did. More moral outrage should come from this use of state power.

  Look, AIG had employment contracts. Those contracts said, “do this and we’ll pay you that.” Many employees there hit those performance standards and generated billions in revenue of which a portion they are partly entitled to by contract. That other parts of AIG’s business lost billions more than these employees generated should have left AIG unable to pay its obligations, which it did, UNTIL our benevolent leaders decided to recapitalize AIG to make it solvent so it could then meet its obligations. AIG should not pay some of its bills and not others out of some misplaced idea of what the “right” thing to do is. It should honor its contracts and the govmnt should be enforcing, not destroying those contracts - that is what governments are supposed to do.

  Think of it this way: If AIG owed Avista $100M for its electric bill, should AIG only pay that portion which covers the electricity, exclusive of any wages owed to Avista employees? After all, Avista shouldn’t take bailout money secondhand and pay its employees what it owes them either, should they?

• 

  hmoffsuite on March 18 at 10:40 a.m.

  Or, should AIG file banko and not (in the case above) pay Avista what is owed? So Avista has to raise its rates again?

• 

  Kage_Mann on March 18 at 10:47 a.m.

  hmoffsuite on March 18 at 10:20 a.m.I think the AIG bonuses should be paid in AIG stock. Let them enjoy the fruits of their labor. :~)

  Gawd, no! That’ll just reward them 15 years down the road when it would be worth a fortune.Aren’t the people the shareholders of AIG now?They’re receiving taxpayer dollars.
  All the execs out to be fired and replaced with new thinkers.

• 

  JBelle on March 18 at 10:50 a.m.

  Aj, Trust me. I am not indifferent nor uninitiated with regard to contractual obligations, particularly with regard to employment contractual obligations. I believe your logic doesn’t hold because I think there’s a fairly strong chance that the performance standard, or revenue marks that were supposedly hit, would not stand up under audit. Was it real revenue that strengthened equity? Probably not.

  At any rate, these bonuses will become the new icon of indifference to the American economy and the backbone of the American economy, the taxpayers. AIG has set the standard for scumbaggery in business. I know i have moved several large, very lucrative contracts out of AIG and look forward to doing the same again, whenever I can.

  BTW, AIG is now willing to bonus on half of the original amount. So do I understand that after all is said and done, the workers under contract only hit 50% of their goals? ok, just kidding. That was facetious. my bad.

• 

  JBelle on March 18 at 10:54 a.m.

  hos! I am reading a book by Paul Fish and he’s on my mind, I guess. I meant to say Paul Krugman, as in Woodrow Wilson Paul Krugman, the uber keen Paul Krugman. I think paying those bonuses in stock in the exact right thing to do and you are very clever to think of it. By the way, I have this feeling that if anyone in your company claimed to have made their productivity goal that would result in a large bonus, those goals would be analyzed and reviewed to be certain, that in fact, the goals were met unquivocally and that your company would benefit as a result. Just a feeling.

• 

  Nick_Adams on March 18 at 11:17 a.m.

  KM & Cabbage: Stop saying that FDR extended (or created) the depression. It’s. Simply. Not. True.

  On AIG: Walt’s being consistent and politically savvy given his constituency. I’m watching the hearings live right now. The CEO (Liddy) seems pretty sharp, if politically blind. He’s certainly making a decent case for the business reasons behind paying the bonuses. However, given the unchartered waters he finds himself in, he may consider firing a few MBAs and hiring a few political consultants.

• 

  JBelle on March 18 at 11:21 a.m.

  You know AJ,

  I’m not one to belabor my point, at least not often ;), and I prefer to understate my case rather than overstate it but I came back to tell you that it bothers me you didn’t address the union workers in this country who have stepped up and done what they could for the economy and each other while derivative traders can’t be bothered.

  So here’s my question to you: what if everyone in this country and in the global economy took AIG’s stance? what if the SR went banko, what if the SEA’s said “tough bounce, we’ve got a contract” , what if everyone took a fierce, isolationist stance to protect their turf at the expense of the US government? ultimately the American taxpayer?

  Talk to me. I want to know what you think about this.

• 

  toadman on March 18 at 11:35 a.m.

  “Under FDR unemployment rose to a staggering 23% and it was WW11, not FDR who got us out of the depression.”

  So.. you’re saying that FDR’s massive government spending didn’t help the economy until FDR’s massive government spending on WWII that got us out of the depression?

  I see…

  ;-)

• 

  Kage_Mann on March 18 at 11:56 a.m.

  Toadman, your clever and you deserve an H.M.and a brewski.

  Let me expound a little more:Had WW11 never happened, the depression would have lasted even longer than it did.Now, you’ll
  say that:”well FDR declared war on Japan so in essence he got us out of the depression”. ;-)

• 

  toadman on March 18 at 11:58 a.m.

  ..wow.. that was poorly worded.. but I think you see my point.

  As far as AIG and their derivative short selling skullduggery, tomfoolery, and general douchebaggary…well, they have a serious problem with greed and avarice, imo. I suggest an intervention of sorts….anyone up for forming an angry mob complete with torches, pitch forks, and maybe a Molotov cocktail or two?

  …not that I want to hurt anything living, of course…

  ;-)

• 

  JamesBond on March 18 at 12:01 p.m.

  Minnick is 100% correct. His economic thought is far more clear and pure and capitalistic than anything demonstrated thus far by our 3 “Republican” congressionals and by most people (Republicans and Democrats) in Congress. Kudos to Minnick. He’s winning me over more and more.

• 

  toadman on March 18 at 12:01 p.m.

  I won’t go there Kage, that would just be silly. Besides, Japan declared War on the US when they hit the harbor, dude. Also, I’m trying to limit “being clever” to only twice a day, any more than that hurts my head.

• 

  Aliasjax on March 18 at 12:26 p.m.

  The problem with what ifs, JBelle, is that they’re unending.

  The U.S. Gov should not have bailed out AIG. If they hadn’t, nobody would be getting paid.

  But Govmnt did bail out AIG, in effect buying all of its obligations. So AIG doesn’t owe the money to these employees, WE, the American taxpayer owe them that money. If some of them want to not take it, fine.

  My larger point was that the U.S. Govmnt is deeply entangling itself in private industry with no plans to extricate itself and is using the power of the state to enforce political decisions where market decisions should be being made. It’s horrific.

  And, as an aside, the sickening irony of seeing Barney Frank holding others to account when he himself won’t hold himself to account for his involvement in the Freddie and Fannie messes is disgusting. Where’s the moral outrage???

• 

  Charlie on March 18 at 12:30 p.m.

  Wait till Fanny & Freddie exec get there bonuses this year. Don’t forget all the other “banks” that got bailout help and paid HUGE bonuses to their execs. This mess has been coming down the street for years, almost 30. Hold on, it’s going to get bumpy.

• 

  cantyoureadthesigns on March 18 at 12:36 p.m.

  AIG is the world’s biggest Ponzi scheme, with trillion$ in obligations were it to be presented with demand for full payment.

  This bonus issue, while fuel for populist grist, is the tip of the iceberg.

  But then, those who don’t even know the basics of economic performance from 1933-1940, in fact, simply lie about it, really shouldn’t be paid much attention to. Ignorant FDR bashers.

  The WORST of the Great Depression was in ‘31-32, and it was huge. GDP grew every year from ‘34-‘40 by an average of 2.7%. Federal tax rates and revenues did go way up, offset mostly by steeply declining local and state taxes.

  FDR come into office in Mar. ‘33 right in the midst of the worst of it, including a banking crisis of proportion larger than ever.

  Unemployment peaked at near 25% in ‘33, here’s the further years:

  1934 21.6%
  1935 20%
  1936 16.8%
  1937 14.2%
  1938 18.9%
  1939 17.%
  1940 14.4%

• 

  JBelle on March 18 at 12:36 p.m.

  AJ, I don’t think anybody would argue that the market has been so badly bastardized that it’s true real father may never be known again. Fact, it may now be the progeny of a mother, an aunt and goat as far as I can tell.

  But we’re talking specifically about AIG and their refusal to accept a moral obligation such as the one many individual citizens who earn much less than some employees of AIG have have done in the last 3 months. And I agree Barney Frank is another topic of outrage, his and ours. But what about AIG? What about AIG, AJ. Talk to me about AIG.

• 

  JBelle on March 18 at 12:37 p.m.

  Cyrts, I asked earlier, only half rhetorically, what the difference is between AIG and Madoff, besides indictments.

• 

  cantyoureadthesigns on March 18 at 12:54 p.m.

  Correction: GDP dropped in 1938 by about 4%. Damn tables and my old eyes.

  Oh, and in 1938 the former head of the NYSE was sent to prison, convicted of fraud.

• 

  cantyoureadthesigns on March 18 at 1:01 p.m.

  JBelle, well this is one way of looking at it:

  http://3.bp.blogspot.com/_a-Su2SAnGYU/ScCbRrDa96I/AAAAAAAAJR8/uU-ojjRoMkc/s1600/madoff-obama.jpg

  AIG is orders of magnitude bigger than Madoff. It was the WORLD’S largest insurance company, tho it didn’t act in a fiduciary responsible fashion, like insurance companies did back before they were allowed to merge with investment banks.

• 

  JBelle on March 18 at 1:12 p.m.

  hahahaha! no kidding! DFO, will you front page this one? love.it.

• 

  Aliasjax on March 18 at 1:13 p.m.

  We disagree, JBelle, on what the morals should be.

  You seem to think that it’s morally “right” for people to say, “don’t pay me. I’ll get by. I’ll sacrifice for the company or for my co-workers, or whomever.”

  I say that is a choice they’re free to make, as some have, but it’s not any more morally right than companies that pay their obligations. In fact, just the opposite is true. The morally superior act is for AIG to honor its contracts - to not do so is immoral.

  Those who refuse to accept the money might be nicer…kinder…more socially conscious…whatever, but it doesn’t make them morally right and the others morally wrong. The amount of money compensation is irrelevant. The principle is in honoring agreements.

  Here’s the funny thing, if the government hadn’t bailed out AIG, its employees would have been faced with the same market forces that compelled those you hail for their willingness to refuse wage increases. In all likelihood, AIG employees would have accepted lower pay et al to keep their jobs too.

• 

  cantyoureadthesigns on March 18 at 1:22 p.m.

  Re: BK, we’re damned if we do, and damned if we don’t.

  AIG is a multinational company, with more than half of its obligations owed to foreign entities. Think those entities want a US Bankruptcy Court sorting out this mess?

  Here’s a link to the original source of that cartoon:

  http://www.minutemanmedia.org/CARTOON%20031809%20Madoff%20in%20Jail.JPG

• 

  JBelle on March 18 at 1:26 p.m.

  I agree that there’s real irony in the bailout as it provided a great escape hatch for AIG to slip it to all the Americans who pay taxes. But I think that no matter what the precedent, no matter what the prevailing market condition, no matter what the legal issues point to, in addition to following all the rules and laws meticulously, Corporate America has an obligation to be a good corporate citizen, exercising leadership bound in ethics, with concern and compassion directed toward the greater good.

  I would love to see a huge electronic sign in Times Square highlighting all the organizations and businesses who are good corporate citizens; whose employees have voluntarily contributed to the future of this country, not only by paying their income tax, but by making concessions that have no legal mandate. I want to know who these citizens, corporate and otherwise, are so I can thank them with my business and my respect. I was thrilled when that piece on HBO came up earlier about the woman who retired so the young mother could keep her job. I’d like to know who that is and who that company is. I say

  boorah!

• 

  Cabbage Boy on March 18 at 1:28 p.m.

  Sorry Nick, but it is true. Hoover’s meddling turned the correction into a recession much like Bush and his policies. FDR spent us into a full blown Depression.

  Happened before, will happen again. Some say by design. Germany ushered in the Nazi era because the economy was in shambles (conveniently they bolstered their cause by blaming the Jewish race.) Japan turned a booming economy into a depression that has lasted 15 years.

• 

  cantyoureadthesigns on March 18 at 1:48 p.m.

  “FDR spent us into a full blown Depression.”

  FALSE.

  Economic activity contracted SEVERELY in 1930, 31, and 32, slightly less so in ‘33, and then GDP started rising moderately, and unemployment reducing significantly.

  You may have an argument that the improvements came from increased government spending, “make work” and the like, but the overall economy improved under FDR. The Great Depression bottom out BEFORE he came into office.

  And under FDR, the ratio of federal debt to GDP rose very little, compared to most of the past 30 years.

• 

  Sisyphus on March 18 at 1:50 p.m.

  “FDR spent us into a full blown Depression.”-actually just the opposite. FDR began taking us out of the depression through government spending from 32-36. However after his re-election in ‘36 he was talked into trying to balance the budget since things were starting to look up. Most economists agree was a mistake cause it prolonged the depression until WWII-the largest public works project yet devised.

• 

  Nick_Adams on March 18 at 2:00 p.m.

  Thanks cantyou and sis for correcting CB’s irritatingly consistent attempts to distort and re-write history.

• 

  cantyoureadthesigns on March 18 at 2:24 p.m.

  A lot of the slowdown that happened in late 37 and thru much of 38 was also because the SCOTUS ruled against several of FDR’s policies, or other consumer protection policies/cases coming from the States. This led FDR, shamefully, to try and pack the Court by expanding it.

• 

  Joker on March 18 at 2:48 p.m.

  It’s funny how ultra right wingers are trying to rewrite history about FDR. He led the country out of the Great Depression and fought the Nazis and Japanese. The guy set the stage for one of the biggest economy booms in U.S. history after the war.
  He was one of the greatest.

  It’s equally amazing how Dems and Reps have been undoing the banking and investment regulations put into place by FDR to prevent another Great Depression from happening. Congress and presidents have been hammering away for decades to unravel those regulations and rules. Are we really surprised by the total economic collapse and companies like AIG? We shouldn’t be.

• 

  Sisyphus on March 18 at 3:00 p.m.

  You can say ‘shamefully’, CYRTS, and it certainly was for jurisprudence. But only because it worked.

• 

  cantyoureadthesigns on March 18 at 3:05 p.m.

  Sys, I know the issue about the attempt to pack the Court is VASTLY complex, and I admit to oversimplifying in the interest of not going further off-topic.

• 

  JamesBond on March 18 at 3:39 p.m.

  That dang Hitler (and Hirohito) sure deserves a lot of credit for the largest public works project yet devised!

• 

  PDXPup on March 18 at 11:55 p.m.

  Aliasjax, we aren’t talking a nice check for $5,000 at Christmas here…I’d feel like sh*t taking a 7-figure bonus I didn’t earn on the back of the american tax payers. just because i would’ve been contractually obligated to a bonus doesn’t mean i did the work to deserve it. AIG paying out these bonuses was a complete and total airhead move. Again, just because a performance bonus was written into their contracts doesn’t mean AIG has to honor them…I mean, if we are paying for the company to be bailed out from bankruptcy and financial ruin at this point, please tell me who in the company has earned a performance bonus for a job well done?

• 

  cantyoureadthesigns on March 19 at 12:29 a.m.

  Looks like we’ll be finding out about Merrill, at least.

  “The chairman of the House Committee on Oversight and Government Reform has asked for records on the $3.62 billion of year-end bonuses at Merrill Lynch, to see if the panel was misled about the payments, the Wall Street Journal said.
  …”

  http://www.cnbc.com/id/29751202

• 

  JIMMYMAC on March 19 at 1:03 a.m.

  Hmmmm….my heart says no to the bailouts, but my heads says they were a necessary evil-in some cases.
  I think Bernanke said it best on 60 minutes when he likened it to a house on fire that is close enough to ignite your own house, which is close enought to your neighbors, and so on and so on.

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