Money (edit 20-3-09)
So, AIG paid out not quite 1 one thousandth of the money they received from the government to a bunch of folks to fulfill its contractual obligation to them.
And everyone is having screaming hissy fits over it. To bring this down to numbers we call all understand, that is the equivalent of them giving somebody a dime out of 100 dollars. What does this tell us? Well, first, class envy is still a going concern and is being fanned by the democrats (and the republicans) in congress and the press. Second, the government has given WAY TOO MUCH money to AIG. (Anyone heard the theory of Zombie Banks?) The thing that bothers me the most about this whole issue is the witch hunt being conducted against the recipients of this money. (Money incidentally that they earned before the economic meltdown occurred.) The AG of New York is out hunting for an excuse to prosecute somebody for anything at all and is frankly extorting information from the company to get it. Congress is no better. I really don’t like the idea of them rushing some law out to punish a bunch of people who live in London and who may or may not be US citizens via the tax code. This will set precedents that we really don’t want and opens a huge space for the rule of unintended consequences to fill with who knows what chaos. Trust me, even a pretty specific, well thought out and well written law (which this will almost certainly not be) will give people with an axe to grind (like Andrew Cuomo) the opportunity to try and prosecute others under its precedent. Altogether it is a really bad idea.
Now, this being said, I have NEVER understood how a corporation can give gobs of money to people who are losing it money. These "golden parachute" things that CEO get after they drive the company into the ground and walk away with a hundred million extra dollars for their efforts are just damn foolish. (yes, they are contractual obligations but whoever is writing the contracts needs to get their asses kicked and then get fired.)
EDIT
This comic makes my point too.
xkcd
And everyone is having screaming hissy fits over it. To bring this down to numbers we call all understand, that is the equivalent of them giving somebody a dime out of 100 dollars. What does this tell us? Well, first, class envy is still a going concern and is being fanned by the democrats (and the republicans) in congress and the press. Second, the government has given WAY TOO MUCH money to AIG. (Anyone heard the theory of Zombie Banks?) The thing that bothers me the most about this whole issue is the witch hunt being conducted against the recipients of this money. (Money incidentally that they earned before the economic meltdown occurred.) The AG of New York is out hunting for an excuse to prosecute somebody for anything at all and is frankly extorting information from the company to get it. Congress is no better. I really don’t like the idea of them rushing some law out to punish a bunch of people who live in London and who may or may not be US citizens via the tax code. This will set precedents that we really don’t want and opens a huge space for the rule of unintended consequences to fill with who knows what chaos. Trust me, even a pretty specific, well thought out and well written law (which this will almost certainly not be) will give people with an axe to grind (like Andrew Cuomo) the opportunity to try and prosecute others under its precedent. Altogether it is a really bad idea.
Now, this being said, I have NEVER understood how a corporation can give gobs of money to people who are losing it money. These "golden parachute" things that CEO get after they drive the company into the ground and walk away with a hundred million extra dollars for their efforts are just damn foolish. (yes, they are contractual obligations but whoever is writing the contracts needs to get their asses kicked and then get fired.)
EDIT
This comic makes my point too.
xkcd
posted by exMI | 07:22
3 Comments:
Yep. Who bells the cat ?
This is the thing - if it's OUR money, I'm pissed. If it's AIG's money, then they're being idiots, but it's not my problem.
I don't think it's so much class envy as it is it's OUR money they're getting.
I think it's a little of "our money" and allot of wealth envy. People were crying about bonuses before the bail outs.
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