Seven weeks ago in a fit of rage I wrote a post about giving the bonuses back. Although there's nothing controversial whatsoever about asking companies that have received hundreds of billions in taxpayer bailouts to give back the more than $20 billion (and counting) in bonus candy they handed out to the thieves working for them, writing about it did little to bring down my blood pressure.
Now there's a big stink being raised, seemingly from all directions, about a mere $165 million in bonuses recently paid out by AIG, by far the largest pig feeding at the TARP trough. And it has been correctly pointed out that this story is simply a smokescreen to distract us from the real outrage that AIG is doling out much larger quantities of cash to all the other TARP pigs to cover their bad bets at 100 cents on the dollar.
Whether this AIG bonus outrage is real or fabricated, and whether or not we should care about millions (with an 'm') when billions and trillions of US taxpayers' hard-earned dollars are being tossed around like candy falling from the busted pinata formerly known as the US economy, I still can't get over the fact that giving bonuses for failure is unbelievably bad business.
Now I'm not an MBA, but I understand enough about human behavior to know that when you reward people for poor performance, you are virtually guaranteeing more of the same. And if there really is popular outrage over this $165 million drop in the wall street bonus ocean (and my once-again boiling blood tells me there is), it has to be due to the fundamental unfairness of paying huge sums in bonuses to the very people who wrote the CDO contracts that torpedoed AIG's otherwise profitable business. The very contracts that all the other pigs used to hedge their bad bets that caused this whole mess. Meanwhile, regular people all over the world are hurting because they lost their jobs in the continuing economic fallout of all this bad business.
While many have concerned themselves over blame: whether Geithner should have stopped the bonuses, or whether modifications to Dodd's amendment were made by some phantom to allow this, or whether the contracts could have been broken by AIG, they seem to be missing the big question:
Who wrote the employment contracts that required AIG to pay huge bonuses to its employees, even in the face of huge losses?
This was not, by definition, a bonus. What it was is unbelievably bad business.
[And Rep. Barney Frank is right when he suggests that we go after the bonuses using shareholder lawsuits.]
One other thing: anyone who tells you that we should get the bonus money back from AIG probably thinks you are stupid. We need to get the money back from the individuals who received the bonuses, not from AIG. In case you forgot, we as taxpayers now own AIG, so unless you find it gratifying for your right hand to take money from your left, we should call this BS for what it is.
Wednesday, March 18, 2009
Thursday, February 26, 2009
Texas governor considering political suicide
In Texas politics there is a phrase for leaving federal money on the table: "political suicide"
By now everyone has heard the news that Governor Rick Perry of Texas (a.k.a. Governor Goodhair), along with several other southern Republican governors, is considering rejecting part of the stimulus package that would provide $555 million in unemployment benefits for out-of-work Texans.
What might not be as widely known is that the Texas Unemployment Insurance (UI) trust fund is broke (roughly $447 million in the hole) because of the Guv's short-sightedness in suspending the employer tax early last year. It will automatically raise taxes on employers later this year (not a good idea in a downturn) if nothing is done about the shortfall.
Also perhaps not as well known is that the Guv has been living in a $9900/mth McMansion at taxpayers' expense (the governor's mansion was first being rehabilitated, then was partially destroyed by fire).
So the good governor is living high on the hog, all the while thinking about turning away federal funding for those who have lost their jobs during the worst economic depression we've seen in 60 years! And of course everyone knows that unemployment benefits are among the best economic stimulus there is because, well, there is no one more likely to spend money than someone without a job!
Texas taxpayers will end up paying for the federal stimulus regardless of whether the governor takes it or not. It's our money, Guv, not yours!
One last fact, in case you didn't know: Texas is usually dead last in per capita state spending. That's right, we are the cheapest state in the union!
Put it all together, and it explains why there is a long-standing phrase for Texas politicians who leave federal money on the table: it's called "political suicide."
So, I'm really conflicted here.
Our governor stands at the precipice, and I want to shout "Jum..."
But there are so many tens of thousands of people who need that money desperately.
He's raising the hemlock to his lips, about to quench his thirst with Guyana punch, and I want to say "Cheers!"
But I just can't bring myself to urge him on..
[this entry cross-posted at DailyKOS, where it received about 600 more comments than it got here]
By now everyone has heard the news that Governor Rick Perry of Texas (a.k.a. Governor Goodhair), along with several other southern Republican governors, is considering rejecting part of the stimulus package that would provide $555 million in unemployment benefits for out-of-work Texans.
What might not be as widely known is that the Texas Unemployment Insurance (UI) trust fund is broke (roughly $447 million in the hole) because of the Guv's short-sightedness in suspending the employer tax early last year. It will automatically raise taxes on employers later this year (not a good idea in a downturn) if nothing is done about the shortfall.
Also perhaps not as well known is that the Guv has been living in a $9900/mth McMansion at taxpayers' expense (the governor's mansion was first being rehabilitated, then was partially destroyed by fire).
So the good governor is living high on the hog, all the while thinking about turning away federal funding for those who have lost their jobs during the worst economic depression we've seen in 60 years! And of course everyone knows that unemployment benefits are among the best economic stimulus there is because, well, there is no one more likely to spend money than someone without a job!
Texas taxpayers will end up paying for the federal stimulus regardless of whether the governor takes it or not. It's our money, Guv, not yours!
One last fact, in case you didn't know: Texas is usually dead last in per capita state spending. That's right, we are the cheapest state in the union!
Put it all together, and it explains why there is a long-standing phrase for Texas politicians who leave federal money on the table: it's called "political suicide."
So, I'm really conflicted here.
Our governor stands at the precipice, and I want to shout "Jum..."
But there are so many tens of thousands of people who need that money desperately.
He's raising the hemlock to his lips, about to quench his thirst with Guyana punch, and I want to say "Cheers!"
But I just can't bring myself to urge him on..
[this entry cross-posted at DailyKOS, where it received about 600 more comments than it got here]
Friday, January 30, 2009
Give the bonuses back!
Lots of people are disgusted to find out that Wall Street banksters paid themselves almost $20 billion in bonuses at the end of 2008, shortly after many of them were bailed out to the tune of $350 billion (and counting) by the taxpayers. These are the very same people who are largely responsible for driving our economy into the ditch, causing millions of people (and still counting) to become unemployed. And they think they deserve bonuses? The level of greed is just unbelievable!
This bonus payout flies in the face of pay-for-performance strategies: these banksters lost billions upon billions of dollars of other people's money, and many of them should rightly be in jail. Not getting bonuses! You do not reward such behavior. I don't care if some divisions of these corporations were profitable. If the firm loses so much money that it needs a government handout, it should pay no bonuses. Period.
And don't tell me these companies will lose their best and brightest employees. Most of these financial firms are letting people go, like the rest of the industries are, so where would they jump to? We can put them to work on a chain gang, if they need employment.
President Obama called it shameful. That's not enough. Shaming only works on someone who has a conscience. We've gotta do more than shame these sociopaths, as they clearly have no consciences whatsoever.
So I propose that we simply take back the bonuses from all individuals working for any company that received money from the TARP program. We all know the law that authorized the program was written hastily. At the time, Congress was desperate to save our economy, which is still very much on the edge of an abyss. So pass a new law clarifying it. Make them give the money back to the taxpayers who bailed them out. Think that's unfair -- changing the rules in the middle of the game? Perhaps.
What about this, then: a temporary change in the income tax law, for tax years 2008 and 2009, that would levy a 95% income tax rate on bonuses paid by any company that received funds under the TARP program. You could exempt the first $5000 if you're worried about punishing the clerical staff.
However it's done, they need to give the money back. It's as simple as that.
I also have a good longer-term idea for how to rein-in outrageous executive pay levels in the future, but I have to get back to work now so I'll write about it later. Some of us actually have to work for our pay.
This bonus payout flies in the face of pay-for-performance strategies: these banksters lost billions upon billions of dollars of other people's money, and many of them should rightly be in jail. Not getting bonuses! You do not reward such behavior. I don't care if some divisions of these corporations were profitable. If the firm loses so much money that it needs a government handout, it should pay no bonuses. Period.
And don't tell me these companies will lose their best and brightest employees. Most of these financial firms are letting people go, like the rest of the industries are, so where would they jump to? We can put them to work on a chain gang, if they need employment.
President Obama called it shameful. That's not enough. Shaming only works on someone who has a conscience. We've gotta do more than shame these sociopaths, as they clearly have no consciences whatsoever.
So I propose that we simply take back the bonuses from all individuals working for any company that received money from the TARP program. We all know the law that authorized the program was written hastily. At the time, Congress was desperate to save our economy, which is still very much on the edge of an abyss. So pass a new law clarifying it. Make them give the money back to the taxpayers who bailed them out. Think that's unfair -- changing the rules in the middle of the game? Perhaps.
What about this, then: a temporary change in the income tax law, for tax years 2008 and 2009, that would levy a 95% income tax rate on bonuses paid by any company that received funds under the TARP program. You could exempt the first $5000 if you're worried about punishing the clerical staff.
However it's done, they need to give the money back. It's as simple as that.
I also have a good longer-term idea for how to rein-in outrageous executive pay levels in the future, but I have to get back to work now so I'll write about it later. Some of us actually have to work for our pay.
Tuesday, January 20, 2009
Welcome back to Texas!
Let me be the first to say it:
Welcome back to Texas, W!
Not that I really want you here. I just really, really, really, really don't want you there anymore. You've made such a disaster of things. Time now to step back, slowly back away from the presidency, and let a real man clean up your mess.
I know, by the way, that you're not really from here. You're from Connecticut or Maine or one of those states up there. But if it gets you to leave DC, I'll concede the point and make you an honorary Texan. Just get on that plane already!
Guess I'll have to retire the Impeach W web site. Sold more items to myself than anyone else anyway. Will have to scrape the stickers off my bumper too. But that's OK. Just come on home now!
Sincerely,
loyal citizen and patriot
PS- Thanks also for moving to Dallas. I never did like that city, and now you're giving me one more reason to stay away.
Welcome back to Texas, W!
Not that I really want you here. I just really, really, really, really don't want you there anymore. You've made such a disaster of things. Time now to step back, slowly back away from the presidency, and let a real man clean up your mess.
I know, by the way, that you're not really from here. You're from Connecticut or Maine or one of those states up there. But if it gets you to leave DC, I'll concede the point and make you an honorary Texan. Just get on that plane already!
Guess I'll have to retire the Impeach W web site. Sold more items to myself than anyone else anyway. Will have to scrape the stickers off my bumper too. But that's OK. Just come on home now!
Sincerely,
loyal citizen and patriot
PS- Thanks also for moving to Dallas. I never did like that city, and now you're giving me one more reason to stay away.
Friday, January 9, 2009
BCS stands for..
Let me see if I've got this straight..
Florida beat Okrahoma by ten points on a neutral field, and they did the victory formation down the stretch.
Texas beat Okrahoma by ten points on a neutral field, and they did the victory formation down the stretch.
Utah beat every team they faced, including several very good ones.
...
Texas had only one loss, on the road, while facing their fourth consecutive top-11 team.
Florida had only one loss. At home. To whom? Ole Miss. What was their ranking again? Oh.
Utah lost to, well, nobody.
...
So the national champion is.... Wait a minute. Who? Really?
...
time for a history lesson:
a Boot-licking Coin Scam was created to ensure equal chances at big money for all... I mean to arrange some kind of fair distribution of treasure among... Hold on, let me start over.
a Behemoth Collegiate Shakedown was designed to make sure the one school in the country that was the very best at hiding the fact that they compensate their amateur... I mean the very best at conning recruits into... Bear with me a minute, I'll get this right.
a bunch of smart people got together and planned a Bogus Cartel of Sport to certify that the very best ones in the country at convincing a handful of young men to become super-obese in the hopes that one day they will... Darn it, let me try again.
this Business of Colossal Stupidity has been in place for some years now, and every single year they have bestowed their fancy crown on an undisputed national... I mean everyone always agrees that the best college football team is... One more time; I'm sure I'll get it right.
the system of choosing a Bull$h!t Champion by Secret-ballot was deemed to be the most fair way to commandeer huge piles of cash from young athletes' celebrity before allowing them to... I mean of course educating them to ensure their futures after being all used up by... Um. OK, last time.
again, it is obvious to all who have at least two brain cells firing that the purpose of the Bankrolled Competition Syndicate... I mean the system for allocating Booty to Coaches by Show-of-hands... I mean the only fair way is to have a Ballot of Copious Song-and-dance to decide the... Well, clearly the Bigtime Copywriters Snowjob is the only way to...
Sorry, but I have absolutely no idea why the Bill-of-goods Challenge for Specie was created nor what its purpose is.
Florida beat Okrahoma by ten points on a neutral field, and they did the victory formation down the stretch.
Texas beat Okrahoma by ten points on a neutral field, and they did the victory formation down the stretch.
Utah beat every team they faced, including several very good ones.
...
Texas had only one loss, on the road, while facing their fourth consecutive top-11 team.
Florida had only one loss. At home. To whom? Ole Miss. What was their ranking again? Oh.
Utah lost to, well, nobody.
...
So the national champion is.... Wait a minute. Who? Really?
...
time for a history lesson:
a Boot-licking Coin Scam was created to ensure equal chances at big money for all... I mean to arrange some kind of fair distribution of treasure among... Hold on, let me start over.
a Behemoth Collegiate Shakedown was designed to make sure the one school in the country that was the very best at hiding the fact that they compensate their amateur... I mean the very best at conning recruits into... Bear with me a minute, I'll get this right.
a bunch of smart people got together and planned a Bogus Cartel of Sport to certify that the very best ones in the country at convincing a handful of young men to become super-obese in the hopes that one day they will... Darn it, let me try again.
this Business of Colossal Stupidity has been in place for some years now, and every single year they have bestowed their fancy crown on an undisputed national... I mean everyone always agrees that the best college football team is... One more time; I'm sure I'll get it right.
the system of choosing a Bull$h!t Champion by Secret-ballot was deemed to be the most fair way to commandeer huge piles of cash from young athletes' celebrity before allowing them to... I mean of course educating them to ensure their futures after being all used up by... Um. OK, last time.
again, it is obvious to all who have at least two brain cells firing that the purpose of the Bankrolled Competition Syndicate... I mean the system for allocating Booty to Coaches by Show-of-hands... I mean the only fair way is to have a Ballot of Copious Song-and-dance to decide the... Well, clearly the Bigtime Copywriters Snowjob is the only way to...
Sorry, but I have absolutely no idea why the Bill-of-goods Challenge for Specie was created nor what its purpose is.
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