Tax Dollars Being Wasted On The Multiple AIG Bailouts

I try to be eloquent or at least professional when I write but AIG (AIG) has me fired up.  I know I’m two days late on this story.  I know that others have written ad nauseum about this.  I just had to write a little about it here.

First of all, AIG accepted a bailout last year and planned to proceed with a executive retreat or some stupid thing.  The company would have gone out of business without this.

Then they needed additional bailout money later in 2008.  Then again in 2009.

And then this weekend we learned about the bonuses they paid to some of their executives.  Executives presumably at least partially responsible for the demise of the company that led them to need the bailouts in the first place.

We heard the arguments.  These bonuses were contractually owed to them.  Never mind that if the company had gone out of business they would have gotten nothing and if the bailouts had not been granted the company would have gone out of business.

Never mind all of that.

We also heard the story that in order to keep their top talent they have to treat them similarly to other companies.  Employee retention was part of the explanation. If you don’t pay them, they’ll go to competing companies and trade against AIG’s positions - they know how bad they are because they put them in place.

So what do some of these AIG executives do?  They leave the company after collecting their bonus.

I guess people collect their bonus and leave all the time.  Maybe not when it’s taxpayer money.  Maybe not when hundreds if not thousand of their colleagues have lost their own jobs.

I mean this is about the dumbest company I’ve ever seen.  Why is it that no other company scheduled a lavish executive retreat with the TARP money?  Why is it that none of the other bailed out companies have made the news for issuing $165 million in bonuses?  It’s because most of them are not run by complete idiots.

No wonder Congress is discussing the Japanese tradition of Seppuku regarding AIG leadership.  No wonder you have people wondering if we should just let AIG fail.  The opportunity will come - do you think this incompetent bunch is done asking congress for money?  Another plan being floated out there is to tax either AIG or the individuals to get the bonus money back.

You know what?  It doesn’t matter.  This isn’t the first time I’ve seen my tax dollars wasted.  I wish we hadn’t bailed them out, but at the end of the day I’m not getting a tax cut if they tax AIG for the bonus money back.

The worst part about this is that we were all afraid of the costs of not bailing out AIG.  We rushed into this like every other rescue package and stimulus bill.  And once you bail them out once, you are “pot committed” and have to see the game through.  That’s what AIG and the congressmen (and yes, the presidents) who supported the multiple AIG bailouts.

They are too big to fail.  And yet they continue to fail every day.  If the company does not go out of business it will be a wonder.  I might even say it will be a shame.

This financial market crisis needs to see some accountability in order to really begin to see trust return to the markets - Lehman was allowed to fail and AIG should be allowed to fail as well.

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