It's interesting that some have criticized journalists for paying too much attention to the pay issue, while $170 billion already and likely $100 BILLION MORE will go to AIG.
These critics have missed the point, and rather obviously. The goal is to awaken the American people, not quibble about the legitimacy of the alarm.
I believe people understand the difference between $165 million and $165 billion, just as they understand the difference between $45 billion for Citigroup and a $45 million private jet, and $45 billion for Bank of America versus John Thain's $35,000 commode with legs.
Particularly, with AIG, the outrage stems from the fact that we have been told the $170 billion was to prevent global financial collapse, while we all intuitively understand that the $165 million in bonuses were part of employment contracts agreed to BEFORE the failure of AIG. Guess what? Tough shit. Virtually everyone has felt the sting of a broken contractual promise. SOL. We all get it. The damning affront is, that because of our largesse, these AIG employees are actually shit in luck.
I have written about it repeatedly. Advantage commode is what I call it for a lack of a better phrase. Sometimes, it's the smaller, symbolic issue that resonates and does more to enrage than the ongoing glare of bailout after bailout.
I think the rub for most people is fairness. If you took no TARP funds then pay your employees whatever you would like. We are not unreasonable.
But if you are a failed company who needed our cash to survive, then there are different rules.
With regard to employee retention at TARP companies, we have heard the cries from CEOs Dimon, Pandit, and Lewis that the proposed legislation will destroy their companies as their employees will be lured away by NON-tarp firms. First of all, GOOD. That's what should happen when your company fails. The winners are supposed to feed off your carcass. It used to be called capitalism. Your companies took excessive risks and now must pay the price. The companies who did not fuck up as you did should be able to enjoy the spoils of victory. But they won't. Not in this era.
Secondly, who the hell is hiring in banking and financial services besides John Paulson. You will lose certain people undoubtedly, but again that is the desired outcome.
The argument from the CEOs is specious and has no merit.
They need to shut-up and return the money as soon as possible.
This legislation will help.
The Sherminator got it right.