Quote:
Originally Posted by UGAalum94
There was a time pre-bailout that the money was the American taxpayers' (at least on some theoretically level), and it's pretty outrageous that government officials thought that the way to keep AIG from failing was simply to give them money with absolutely no stipulations about what it would be spent on. What reasonable person thinks like this: "hey, AIG, you demonstrated horrible judgment about how to successfully run your business; here's $144 billion with no strings attached to give you another shot."
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That might be how the
average person views it, but
reasonable should be an entirely different standard.
Look, AIG is sunk cost at this point. The money's gone - and if you want to unseat your Congressman because s/he voted for it, go nuts, because that's the only say we have in it now. But let's not misrepresent the idea here - the thought wasn't "oh, $144 billion and things go away" . . . not in the slightest. The idea was "oh, $144 billion and maybe we'll help prevent or stave off a market collapse that will devalue the currency, cause massive bank failure and create a situation of incredible panic." Because that was one of the potential downsides of the AIG failure - and we need to look at it more like this:
(these are all completely made up)
-10% chance of market collapse given the Lehman/Bear Stears/AIG troika, with only AIG needing to be propped
-25% chance of deep depression
-65% chance the failure has no long-reaching consequences
The 10% chance costs the economy something like $2 trillion, the 25% chance something like $1 trillion, the 65% chance something like $144 billion. The math is very simple: the 'risk' of the $144 billion is worth even a moderate to small chance of collapse.
Quote:
Originally Posted by UGAalum94
As far as anger being directed at AIG employees, again, I'm not watching or listening to the nuts making death threats and sure, everyone didn't participate in the bad decision making at AIG. Generally speaking though, I'm not sure the rest of us are guaranteed that our salaries will remain unaffected by bad decision making by the people we work for. I'm not really angry at the average AIG employee who got a bonus, but I don't accept this idea that they were entitled to the bonus money and there was nothing that could be done. If you're working for a business on the brink of going under, you should probably HAVE to make concessions to try to ensure that the company won't fail. The common interest in renegotiating should have been saving the company, and if the employees don't have any interest in that, why should the rest of us?
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If the company doesn't have the money to pay me, I don't get the money, sure.
The company does have the money to pay them - and it's a tiny, tiny amount of the overall income process.
There's also a very good chance that there paying the bonuses IS in the best interest of ensuring the company doesn't fail, by the way - no one has addressed that yet.