The Real AIG Scandal- CEO Bonuses Are Merely A DROP IN THE BUCKET

[Orwellian_Ghost]

The Real AIG Conspiracy By Prof. Michael Hudson

Here’s the problem with all the hoopla over the $135 million in AIG bonuses: This sum is only less than 0.1% – one thousandth – of the $183 BILLION that the U.S. Treasury gave to AIG as a “pass-through” to its counterparties. This sum, over a thousand times the magnitude of the bonuses on which public attention is conveniently being focused by Wall Street promoters, did not stay with AIG.

For over six months, the public media and Congressmen have been trying to find out just where this money DID go. Bloomberg brought a lawsuit to find out. Only to be met with a wall of silence.

Until finally, on Sunday night, March 15, the government finally released the details. They were indeed highly embarrassing. The largest recipient turned out to be just what earlier financial reporters had said was rumored: Mr. Paulson’s own firm, Goldman Sachs, headed the list. It was owed $13 billion in counterparty claims. So here’s the picture that’s emerging. Last September, Treasury Secretary Paulson, from Goldman Sachs, drew up a terse 3-page memo outlining his bailout proposal. The plan specified that whatever he and other Treasury officials did (thus including his subordinates, also from Goldman Sachs), could not be challenged legally or undone, much less prosecuted. This condition enraged Congress, which rejected the bailout in its first incarnation.

It now looks as if Mr. Paulson had good reason to put in a fatal legal clause blocking any clawback of funds given by the Treasury to AIG’s counterparties. This is where public outrage should be focused.


<snip>

http://www.zmag.org/znet/viewArticle/20937

[TBF]

1. All these recs but noone's talking, huh? Facts have that effect sometimes.

Thanks for this article - bookmarking it for future use. Explains everything so well that even I can understand it :)

[Orwellian_Ghost]

5. Too much to bear?

Yes it is amazing to see how little of this gets discussed in ways that can lead to sustained action.

[gratuitous]

2. Yes, the bonuses are a small drop of a very large amount of water

But I'll take public connection and participation wherever it occurs, and if I gain access through the pinhole of executive bonus payments (Why that? Is it because it's so accessible? It involves numbers that most of us can actually relate to? Do I care why? Not really.), then I'll take that to use as a lever to open up public interest in the larger picture.

This is a very complicated and many-faceted problem. Paradoxically, there are only a few access points that are going to resonate with a sufficient number of people to generate a demand for reform of a system that's so massively screwed up it's could take a decade or more to get it functioning more like most people think it should. That is, our financial system shouldn't be set up to benefit a handful of overrich oligarchs, but should work toward the benefit of the larger society. That means progressive taxation, reasonable (not runaway) profits, and investment (government spending) on projects like schools and public transportation that will benefit all economic strata.

[leftstreet]

3. Our esteemed politicians gleefully 'reach across the aisle' in poutrage

Welcome to the New Wedge Issues!

God, guns and gays are sooooooo yesterday.

[blindpig]

4. Distraction and misdirection.

Throw in a little scape-goating for good measure.

It's just like this nonsense about 'corporatism, and 'shock capitalism', as though it's anything but bidness as usual.

This is how capitalism works, people gotta stop pretending otherwise.

[leftstreet]

7. That's a good point

I read Klein's 'Shock Doctrine,' which was fascinating, BUT you're left with the sense the author's suggesting this particular brand of 21st century capitalism had someone gone rogue, had jumped its 'normal' track.

(On the other hand, that may have just been my paranoia. :P )

[TBF]

8. Yeah, I've got that "paranoia" thing going on too.

I think that's what they call us when we're on to them.

[leftstreet]

9. Even the terminology is psy-opy. 'Healthy' banks, 'toxic' assets

Apparently Capitalism is the patient!

[Orwellian_Ghost]

10. Yep

Folks who wish for some "reform" of capitalism might trying trusting their "reformed" wolf with their children.

Would you?

[randr]

6. Chinese water torture?

[blindpig]

11. Funny that no one ever talks about the stockholders.

There were tons of money made before this pyramid scheme blew up, what of that? All of these evil bastards were at the end of the day employees, though stock holders too. Where is the responsibility of the board of directors, the stockholders?

To bring up this question is verboten as it brings into question the validity of the whole stinking system.

[TBF]

13. Good point - I was just talking about the billionaires in another thread,

we may be last in infant mortality and health care, but the one area where the ole USA is No. 1 is in # of billionaires. I dunno about you, but I'm sure not on that list. I have a little feeling it's where some of our money went... check out these stats compared to the rest of the world:

World wide top 10

Total = 793(2009)
Rank Country Number of billionaires Category
1 United States 359 Category:American billionaires
2 Germany 54 Category:German billionaires
3 Russia 32 Category:Russian billionaires
4 China 28 Category:Chinese billionaires
5 United Kingdom 25 Category:British billionaires
6 India 24 Category:Indian billionaires
7 Canada 20 Category:Canadian billionaires
8 Hong Kong 19 Category:Hong Kong billionaires
9 Japan 17 Category:Japanese billionaires
10 Saudi Arabia 14 Category:Saudi billionaires

Here is the link: http://en.wikipedia.org/wiki/List_of_countries_by_the_number_of_billionaires

[DemReadingDU]

12. How big is the screw?

The Real Screw Job - AIG Used as Funnel of U.S. Taxpayer Money

See these two screws on the bottom? Think of the little screw as AIG bonuses. That big nasty long screw is AIG funneling $183 billion dollars of your money to foreign banks and to banks that already have wads of cash on hand. Those two screw jobs are not even to scale because the large screw would go past the page. Look those two screws over. Now which one do you believe Populist outrage should be focused on?

So we are all outraged over AIG bonuses. Now lets amplify that outrage to the scale of the ripoff. The bonuses are only 0.001 of the real ripoff that just happened. Your tax dollars were funneled through AIG to foreign banks and to U.S. banks for worthless assets. Your own blind rage is a smoke screen, being used by media elites so you do not see the real screw job going on.






read more, and AIG charts & graphs...
http://www.economicpopulist.org/?q=content/real-screw-job-aig-used-funnel-us-taxpayer-money