Most Americans cannot even remotely fathom why a company that is near bankruptcy will hand out bonuses. This is especially true when those companies only exist today because they were bailed out by taxpayers.
Apparently in “Wall Street Culture” bonuses are an integral part of compensation. But, in “Main Street Culture” bonuses, if they even exist, are reserved only for extraordinarily good job performance. But now, suddenly, thanks to TARP, Main Street owns Wall Street, or at least some of it.
Companies such as AIG, Citigroup, Bank of America and to a lesser extent, other TARP recipients have a new owner: “We the People”. And, unlike the former owners, the wiped out share holders, these new owners have fiery spokesmen in Congress.
The culture of entitlement is now being told what to do by Joe the plumber, Jill the waitress and Mike, the laid off auto worker. They don’t vote proxies but they can and do email and write their congressmen.
Well, Congress is having a real hissy fit. Thursday night I watched representative Earl Pomeroy from North Dakota grandstanding on TV. Earl told AIGFP employees “you disgust us, by any measure you are disgraced professional losers…”. On and on he went. He must have been either an attorney or an actor in his pre congressional days. Probably an attorney, I don’t think North Dakota has many actors.
Reportedly, 11 AIG executives have resigned over the bonus brouhaha. And now, Thursday evening, the House passed a bill - boy, that was fast - to tax bonuses up to 90%. Apparently, there is to be a surtax, on bonuses paid to employees earning more than $250,000 if the institution received more than $5 billion U.S. in bailouts.
Congress is doing what it does best (or worst): passing legislation. Congressional members can’t wait to tell their constituents they voted against the “outrageous bonuses” come next election. It would be political suicide to be on the other side of this issue.
Of course, all this is mostly show. The bonus amounts are minuscule compared to bailout amounts. The country would much better served by debating how to avoid future AIG type debacles.
So, AIG and other TARP companies: Welcome to government ownership. You will have to play by different rules from now on. Instead of a free wheeling entrepreneurial culture you will have to learn to deal with red tape, committees, delays and political pandering. Get used to it.
Yet, look at it this way. None of the AIGFP employees and many of the AIG’s non Financial Products employees would probably even have jobs if it wasn’t for the US taxpayer. Would you want “Derivatives Trader at AIG” on your resume? AIG and other TARP recipients, you brought this on themselves. Now you guys are morphed into beauraucrats. Take your cue from Mr. Pomeroy. Speech lessons anyone?
Disclosure: Taxpayer ownership only.
Apparently in “Wall Street Culture” bonuses are an integral part of compensation. But, in “Main Street Culture” bonuses, if they even exist, are reserved only for extraordinarily good job performance. But now, suddenly, thanks to TARP, Main Street owns Wall Street, or at least some of it.
Companies such as AIG, Citigroup, Bank of America and to a lesser extent, other TARP recipients have a new owner: “We the People”. And, unlike the former owners, the wiped out share holders, these new owners have fiery spokesmen in Congress.
The culture of entitlement is now being told what to do by Joe the plumber, Jill the waitress and Mike, the laid off auto worker. They don’t vote proxies but they can and do email and write their congressmen.
Well, Congress is having a real hissy fit. Thursday night I watched representative Earl Pomeroy from North Dakota grandstanding on TV. Earl told AIGFP employees “you disgust us, by any measure you are disgraced professional losers…”. On and on he went. He must have been either an attorney or an actor in his pre congressional days. Probably an attorney, I don’t think North Dakota has many actors.
Reportedly, 11 AIG executives have resigned over the bonus brouhaha. And now, Thursday evening, the House passed a bill - boy, that was fast - to tax bonuses up to 90%. Apparently, there is to be a surtax, on bonuses paid to employees earning more than $250,000 if the institution received more than $5 billion U.S. in bailouts.
Congress is doing what it does best (or worst): passing legislation. Congressional members can’t wait to tell their constituents they voted against the “outrageous bonuses” come next election. It would be political suicide to be on the other side of this issue.
Of course, all this is mostly show. The bonus amounts are minuscule compared to bailout amounts. The country would much better served by debating how to avoid future AIG type debacles.
So, AIG and other TARP companies: Welcome to government ownership. You will have to play by different rules from now on. Instead of a free wheeling entrepreneurial culture you will have to learn to deal with red tape, committees, delays and political pandering. Get used to it.
Yet, look at it this way. None of the AIGFP employees and many of the AIG’s non Financial Products employees would probably even have jobs if it wasn’t for the US taxpayer. Would you want “Derivatives Trader at AIG” on your resume? AIG and other TARP recipients, you brought this on themselves. Now you guys are morphed into beauraucrats. Take your cue from Mr. Pomeroy. Speech lessons anyone?
Disclosure: Taxpayer ownership only.
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