The AIG Slippery Slope

Most of the tweets I received today was about AIG. There were stories of the Obama administration being in the dark about the retention bonuses until this month; of the government using creative measures to recover some of the US$165 million paid if the money is not returned by the AIG executives, including taxing all of it; of the New York Attorney-General launching an investigation into the payouts. A lot of anger, a lot of threats, and unfortunately, not a whole lot of common sense.

Let me be clear here. If it wasn't obvious from my previous posts, I think paying bonuses to idiots who caused the entire mess is stupid. The very idea of a "retention bonus" is stupid, because I just need to do my job to get bonuses. The reward is always there, even without the risk. Bonuses should be linked to performance and nothing else. The fact that the entire administration and legisature allowed this to happen because of one stupid clause is, well, moronic. And to allow such large amounts of what is taxpayer money, since AIG is now 80% owned by the Feds, is absolutely obscene and indefensible.

But the reaction of the government officals also disgust me. Making threats like taxing 100% of the bonuses, launching legal investigations because of the money, and trying to introduce bills to change the rules is tantamount to racketeering. If they go through with this, no contract will be sacred. If they can do this to AIG, they can do this to anyone. The slippery slope starts here. Let's hope common sense prevails, move on, and focus on reforming the entire financial industry. Getting rid of retention bonuses is just the first step of many, locking down the companies receiving bailout money is another, and that should be the main focus.

Here's to hoping the right thing is done the right way.

Edit: I forgot to link this post. From the tweets I received today I'm not the only one who thinks that this whole saga could end up badly for everyone.

Posted via email from trapper's posterous