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Ok, so here is what I understand of the AIG issue to this point....

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Indiana_Dem Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 02:14 PM
Original message
Ok, so here is what I understand of the AIG issue to this point....
Already I'm having a GOP high school friend on Facebook questioning me with the GOP talking points on this bonuses issue.

The way I understand is this--there was a contract with the AIG employees that they would get these bonuses. The bailout bill was written prior to this administration and amendments were made with exemptions for the bonuses. I've read where the congressional committee/treasury was afraid of legal ramifications if the contract was not honored. They went ahead and included this exemption because of the possible legal ramifications. I've also read where the money from the bailout was not used for the bonuses but to pay on the bad debt (not that it really matters-it's all in the same pot).

I can appreciate the honoring of the contract. My husband lost his job from a factory closing. The company tried to back out of their contract and not pay the employees their severence pay or their retirement & healthcare for the remaining time on the contract. They had abruptly announced their closing. It was taken to court and the union won. But regarding the AIG situation, why didn't AIG renegotiate the contracts before the bailout bill was passed? ...unless there was a clause in the contract that denied renogotiations until the contract time was up...

IS this how you guys understand all of this?
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global1 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 02:23 PM
Response to Original message
1. The Powers That Be Are Happy We Are All Confused On This Mess......
because they know that soon we'll lose interest and they can move onto the next way to loot us.
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hamsterjill Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 02:47 PM
Response to Reply #1
4. Correct!
And unfortunately with most of the American public, the powers that be are right. People will lose interest and they will move on.
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leftstreet Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 02:49 PM
Response to Reply #1
5. Bingo
Exactly!
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Nicholas D Wolfwood Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 02:29 PM
Response to Original message
2. More or less, that's how I read it.
Fivethirtyeight.com posted a rather good, detailed analysis of the contract situation. Essentially, we really should've forced the renegotiations before the bailout was passed, similar to how it went with UAW and Detroit. Somebody should have been awake to see it - though it's hard for me to complain because I certainly didn't think of it beforehand either.
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LakeSamish706 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 02:29 PM
Response to Original message
3. Have a look at this thread for some of the powers that be....
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stillcool Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 02:50 PM
Response to Original message
6. Around Christmas time last year..
one of those electronics stores that had filed for bankruptcy started closing their stores. They offered their employees bonuses to stay on and close the stores. The stores closed and not only did the employee's not get their bonuses, they didn't get paid either. Eventually I guess they worked it out. To go back now and demand that those employee's give back all money over a certain dollar amount does not seem right. But neither does promising them an exorbitant amount in the first place. The unions were forced to negotiate their compensation before they got the auto industry got their money..but these finance institutions were allowed to do whatever they wanted. I don't know how you legally nullify the contents of a contract, after the fact. But I guess Congress can do whatever it wants?
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aquart Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 03:51 PM
Response to Reply #6
8. Circuit City? Because that sounds like them.
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global1 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 06:17 PM
Response to Reply #6
10. That's Why They Are Not Nullifying The Contract - They Are Taxing The Bonuses......
Edited on Thu Mar-19-09 06:18 PM by global1
the questions are 1. can they do this retroactively from the first of the year; and 2. can they single out just a small segment of the population; and 3. is this constitutional?

I think Congress set criteria that this effects only the bonuses of those companies that took TARP or Bailout money and only on those employees that are at or above a certain $ earning level. So in response to another post in this thread - it would not effect those that accepted bonuses to stay on the job until the electronics chain closed their doors.




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stillcool Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 06:46 PM
Response to Reply #10
11. I think the pressure needs to be put on..
those executives by AIG. They know that these were excessive bonuses, and they know if not they themselves, their bosses are responsible for running the corporation into the ground. It is no hardship. And I don't see how they can be forced, legally or otherwise to give the money back. How can you indiscriminately tax employees....after the fact? It sounds crazy.
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AngryAmish Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 02:56 PM
Response to Original message
7. These contracts were made about a year ago
Essentially we will pay you X amount to stay on.

Remember Bear Stearns was taking on water at that point from these same type of contracts. AIG could see that this business was going away and wanted these people to stay on to unwind the business. Since them the infamous 11 have been let go. Others have stayed.

AIG was bailed out and the TARP bill last fall let these bonuses alone. Then the stimulus bill explicitely said these folks get the bonuses.

Now people are outraged. Something has to be done. So something will be done.

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aquart Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-19-09 03:55 PM
Response to Reply #7
9. Yep. They wrote these contracts KNOWING they could not pay them
WITHOUT taxpayer money. Not one excuse they give is worth spit. It's plain theft of public money. Not to mention betrayal of the public trust.

Trying to tell us they cannot retain executives in this job market is an unfunny joke. Insisting that executives cannot work without bribes/incentives says there has been a generation of very poor toilet training.
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