This nothing but a political stunt.  There was a contractual agreement to pay the bonuses and most of them are performance based.  If the government wanted to avoid this they should have broken the contract before giving out any of the money.  If we are going to get real how about the 2.5 million dollar 30 second ad for the census during the superbowl paid for by us.

If Travis wants to “voice his concerns”, why don’t he voice about the Administration claiming the paid-back TARP money for promoting programs? The Constitution explicitly states that any money being paid to the Feds needs to be disbursed back to the Treasury, and THEN voted on by Congress? THEN, and only THEN, can the Executive Branch use any of this money; the Legislative Branch must have the ball first! Is that correct, Alan?

This will end up end the courts.

Contractwithamerica what performance were these bonuses based? Imploding the company and almost taking our entire financial system with it?

What business metric does an insolvent company pay hundreds of millions in bonuses to the very employees that essentially bankrupted the company?

Bush and then Obama should have forced AIG into BK and broke those contracts just as Obama did the auto workers at GM and Chrysler.

You may not like Childers but his message here is spot on.

sop

It’s definitely a stunt.  Dems are trying to find a lefty way to be populist.  They’re searching.  Envy has its appeal to some extent.

The AIG thing is a mess. When you tangle gov’t. w/ business, one or the other gets screwed.  The root cause is the gov’t. intrusion. 

And isn’t Geitner up to his eyeballs on this?  So, shouldn’t Childers call for his resignation.  Just to be consistent?

Howard Howard the root cause was allowing an unregulated derivatives market that allowed barely regulated financial conglomerates to take risks for which they had insufficient capital. Phil Graham was the brains behind it but he had plenty of help from Clinton administration.

Woe to a pol in any party that carries water for these wall street crooks.

Geithner should not only resign he should be prosecuted for lying to congress.

sop

Childers’ real estate company no doubt charges an immoral 6% to 7% commission.

Real estate commissions ought to be strictly controlled by statute down to a more reasonable 1% to 2%.

To use the language of Childers, hard-working families ought not be charged outlandish fees by real estate firms such as Childers Realty & Associates.

Alger when Childers’ (or anyone else for that matter) finanical dealings threaten the solvency of the entire country I’ll be right there with you dude.

sop

DIdnt he vote to give AIG the money to keep them in business? Childers is scrambling for issues to run on.  He must think the first district is really dumb and that we will see all that hard work he’s doing staying in Pelosi’s blue dog kennel club!

Sop.  you are flatly wrong the “root cause”.

Many parrot the idea that the Financial Modernization Act signed by Clinton in 1999 is what caused the housing crisis because it removed parts of Glass Steagall and allowed expansion/consolidation of banks. The investment banks mostly responsible for the crisis were already holding the same assets and booking them the same way before “deregulation”.

Hardly any of the banks that were largely involved with the housing meltdown merged, consolidated or otherwise changed how they did business after the “deregulation.” The impact the deregulation had on how it addressed derivatives prolonged and stretched out the problem over time by hiding the issue in over-valuing assets through hiding them with more valueable assets.  But was hardly the root cause.

The main cause is the continued effort towards social engineering. Trying to regulate and/or legislate people into more homes and debt. It worked fine as long as the economy was booming.

As for AIG, Geithner, et al… it might be criminal.

A trust of this sort, to be lawful, has to be irrevocable - you can’t reserve the ability to modify it later. The NY Fed knew they didn’t have the authority to take equity - thus, these “trust” agreements.

Mr. Yerushalmi went on to assert that this establishes a prima-facie violation of the money laundering statute - an extremely serious allegation as that law, if violated, carries very heavy criminal penalties.

This is an explosive allegation - if the trust is defective then it is as if it never existed, and the entirety of the AIG bailout and everything related to it may be criminally unlawful. In addition the shareholders of AIG may have effectively had their equity interest improperly stripped!

link

JD I’m not surprised you disagree with me on this but I’m calling it like I see it.  The repeal of Glass Steagall was a mistake pure and simple.

Those wanting to find out more can start here:

http://www.nakedcapitalism.com/2008/02/credit-default-swap-worries-go.html

http://www.nakedcapitalism.com/2008/10/another-reason-for-cash-hoarding-big.html

Google up Brooksley Born and I guarantee you will want to take your favorite shotgun to DC and clean house.

sop

wait.  I didn’t say the Graham/Leach Act was a good thing.  Glass Steagall wasn’t wholly repealed, though.  Just parts of it and I don’t disagree that repealing those parts was a mistake, just that it wasn’t a “root cause.”

My point was that one should not blame that act as the root cause of the financial meltdown, as much as “deregulation” sounds like an easy evil target.  It’s more complex than that simple answer.

And no, I’m not fond of any of the career politicians we have and would like to see all of the progressives, both D and R, removed.

Fair enough JD. Thanks.

sop

An interesting article on AIG , Goldman Sachs and our government!

AIG: Collusion of epic proportions between Goldman’s US Treasury branch and Goldman Sachs proper
(Zero Hedge )>>>
http://www.riskandinsurance.com/story.jsp?storyId=331497577

Great link Broker. I know the Huff Po isn’t exactly a fan favorite around these parts but they have been on Geithner’s a$$ like white on rice on AIG.

http://www.huffingtonpost.com/2010/01/07/geithners-new-york-fed-to_n_414449.html

Also McClatchy did a great series on Goldman Sachs last fall that is well worth the read.

http://www.mcclatchydc.com/goldman/

I think every recent Treasury secretary save the short lived Paul O’Neill trace back to Goldman Sachs.

sop

soon to be former congressman travis childers just voted IN FAVOR of slapping each and every American with an addition $6,000 in debt.

HJ 45

http://clerk.house.gov/evs/2010/roll048.xml

you will notice that even Gene Taylor voted AGAINST this measure.

tell us again, travis, how conservative you are…

actually… soon to be former congressman travis childers did it to us again… he voted to bring the measure to a vote ONLY to vote against it.  37 house dems voted against the final measure.. STBF Congressman Childers was one of the 37 to vote against it.

after he voted for it....

Since the vote was 217-212, what time today was the lap dog told by queen Pelosi that he could vote against it?

sop, you take the gov’t intrusion of fannie and freddie out of this, it changes the whole complexion.

My libertarian instincts tell me that the federal gov’t. should have let those guys fall.  The market always recovers.  Pain yes.  No pain, no gain.  But I understand the fear of letting that happen and rational people can argue about it to some extent.

Regulating pay is Marxy stuff, though.  We should steer clear of it.  I know we gave ‘em money.  See what a tangled we weave?  And it’s a slippery slope.  And yes, it’s also a political appeal to envy, one of the worst traits of people.  Our leaders should appeal to the best in us, not the worst in us.

Howard you take Countrywide out of this and it changes the whole equation. Fannie and Freddie were not underwrting Alt A and Option ARM mortgages that were the worst of the toxic paper.  Did you know that private companies like Countrywide used a loophold in the accounting rules to actually book as income the “negative AM” on loans that stretched the limits of any sort of common sense as to their ultimate repayment?

What is most interestng to me is that Fannie and Freddie were quasi governmental but did not have an explicit guarantee though the private markets always priced the associated debt and treated the stock if there was one. Yep, management at both were stuffed chock full of political hacks but both operated just like a private company with not much more oversight than Countrywide.

That said not one loan of the agency that had Uncle Sam’s explicit guarantee, GNMA, went bad beacuse they were explicity not allowed to take those type of chances. Perhaps there is something to be said for a bit of regulation.

For certain Fannie and Freddie get some of the blame right along with 2 presidential administrations and both Houses of Congress but that old meme that it was Fannie’s fault just doesn’t hold up when you peek beyond the political rhetoric.

I am not necessarily a fan of regulating pay. I am also not a fan of an insolvent company using tax money to pay bonuses. That has nothing to do with envy as it does common sense.

I don’t get too tied up in the idealogy Howard. If this last implosion of our financial system taught us anything, it is that while politicians stir up and divide the populace making scapegoats of immigrants or demonizing welfare cheats, it is only to distract the people from their double dealing and outright thievery. In my world there is not an ounce of difference between Nancy Pelosi and John Boehner, Chris Dodd or Thad Cochran.

sop

Sop81_1..While you make some excellent points in your analysis, the last sentence seems to be on the irrational edge.

After Bush 1, Clinton, Bush 2 and now Obama I would submit that anyone that has faith in either political party is on the irrational edge but different strokes for different folks right?

Follow the money and you will be set free.

sop

ok, just couldn’t resist this one.  Holler, holler, holler about businesses giving bonuses.  Oops, a Freedom of Information Act request shows a little problem.  So where’s the presser about--shame on Obama and the feds.  Is it still his “responsibility to voice their concerns to the proper channels.”

Bonus bonanza for federal workers
June 16, 2010

Under the Obama administration, the government is doing such a good job that it’s decided to reward itself. Last year, Uncle Sam paid out $408 million in bonuses to 1.3 million federal workers, according to the Asbury Park Press, which obtained the information through a Freedom of Information Act request. That’s about $80 million more than the previous year. About one in four federal workers received a bonus, and awards ranged from $25 to, in the case of one lucky State Department worker, $94,500.

That $408 million figure only counts bonuses that were handed out to about 65 percent of the federal work force. The FOI request didn’t cover awards handed out by the Defense and Treasury departments, security agencies, the White House, Congress and various other federal agencies and commissions. In 2008, the last year information was available, the Department of Defense alone handed out $92 million in bonuses to its 687,000 employees.

Federal bonuses are being doled out liberally, even as federal salaries are exploding. From December 2007 through June 2009, the number of federal workers earning six figures increased from 14 to 19 percent. In 2008, average federal compensation, including pay and benefits, was $119,982—considerably more than the $59,909 average in the private sector, according to the Commerce Department’s Bureau of Economic Analysis. In the midst of a brutal economic downturn that saw millions of jobs lost and unemployment soar above 10 percent, the Office of Personnel Management data shows the federal workforce actually added nearly 100,000 jobs from December 2008 to December 2009.

In theory, introduction of bonuses and pay-for-performance measures in the federal workforce was a positive reform. However, this boom in federal bonuses suggests an “all carrot and no stick” approach to federal performance. For bureaucrats, job security is a non-issue, and they already earn twice as much as an average American just for showing up to work.

Shortly after he assumed office last year, Obama instituted a pay freeze for top White House Aides earning more than $100,000, saying this would “restore that faith in government without which we cannot deliver the changes we were sent here to make.” The president made it clear that he knows egregious federal salaries are a problem, yet he’s done little beyond this symbolic gesture to address the problem. Actually doing something to rein in the runaway federal bureaucracy would be change taxpayers can believe in.