By printing money via the stimulus, the government is presumably valuing full employment over its mandate to control inflation. So if that's the case, we shouldn't have stagflation, but just inflation?
im in los angeles and from what i can remember... back in the 94 northridge earthquake, the only phone lines that worked were standard home phone lines. my cell did not work AT ALL.
im i crazy to think that a land line can be the only form of communication in case the big one hits?
The request has already been put in MANY times for shipping calculators. At the moment, everything I have searched for has been cheaper including shipping than anything else I have found, but I'm sure that won't be the case forever. Look for shipping estimates soon.
Funny how AIG wants to hid behind contractual obligations, but the automakers were forced to rescind on their contractual obligations to their union workers.
Of course the government made the mistake of not spelling out the rules before hand, so now they have to live with the consequences. Some times the appearance of impropriety is as important as whether or not any thing inappropriate actually occurred.
For example our superintendent of schools just received a a $75k bonus, a week before announcing that they are cutting back on teachers due to lack of funds. Does he have to give back that money, no. Should he? It would pay the annual salary for two teachers.
I would and I would if I was one of the AIG execs. Building goodwill towards their company is part of the function of being at the top, it helps insure that you have business next year. Part of my retirement funds is invested through AIG and I have been strongly considering pulling that money even though I would take a hit financially to do so.
And if we let them go bankrupt, do they get their bonuses? I guess I'm not with you here. It seems like the same kind of creative accounting that got us into this mess to start with. Not just with AIG, but with any company that can show losses yet have ceo's or others get bonuses. Maybe too big to fail is just too damn big to start with, and part of too big is being able to float all this b.s. because it's just "too complicated".
I'm also a huge fan of RetailMeNot.com. I hadn't heard of Beat My Price, and it looks great. I gave it a try with a few items. The key thing it seems to be missing is shipping costs.
While the $50 Buy It Now price on Ebay looks great for my Hoover vacuum, with $25 shipping it ends up being $15 more than Amazon. Maybe they'll add the feature soon?
I'm glad there's someone else that pointed this out! This "bonusgate" is all smoke and mirrors to hide the truth behind the curtain.
For those unfamiliar with the toxic asset agenda, the government is going to print $1 TRILLION DOLLARS (or $1,000,000,000,000) to monetize our debts. In other words, they're printing our currency to pay off our debts with our own money! No country has ever done this successfully. In time, this will make the US dollar WORTHLESS!
If we don't take a stand, we'll be going the way of Zimbabwe or the former U.S.S.R.: paying for a loaf of bread with a wheelbarrow of money.
AIG was upfront about the bonus structure before the bailout money was given them, and they are not bonus payments in the traditional sense of the word. They are indeed more like salary payments. Sure, the people getting these payments earn way more than most of us, but that's a dangerous game to play. If you earn twice what your neighbor does, does that mean you should have some of your salary taken away? Salary that you were counting on. This is a smokescreen, pure and simple. We're all getting fired up over this and the nation is trillions of dollars in debt. Why get so worked up over a tiny drop in the ocean?
I know the media doesn't help with this in the way they report the numbers, but AIG recieved around $170 Billion, gave "bonuses" totaling $165 Million. (which, correctly noted by Amber is actually a kind of a misnomer).
To say that correctly, it's $170,000 Million and $165 Million.
That means the bonuses actually made up a bit less than 0.1% of the bailout money. (That's 1/1000).
To understand this in numbers that makes sense to us normal folk, that's like if i bailed out your company with $170,000 and your boss paid out $165 in bonuses to you and your colleagues.
So, don't you think this reaction is entirely, gee... disproportionate? In fact, in the face of the true cost of economic recovery failure, isn't this reaction actually insanely stupid? Shouldn't we all be angry that our congressmen are wasting more than a week on trying to recover less than 1/1000 of the money sent to ONE institution, which makes up less than less than 1% of all the recovery money we're spending anyway???
There are different ways to limit the growth of money supply. Increasing the Fed Funds rate is one way, increasing the reserve requirements another. In the end of the 70's, the Fed increased the Funds rate, accepting a severe recession. Increasing the reserve requirements makes banks less profitable, but I doubt that it would lead into a similar severe recession. In the long run, it makes the money system also more stable, because less money is created as debt and a future debt deflation would be less severe than today's. But are there any other disadvantages of increasing the reserve requirements besides making banks less profitable?
It's always dangerous to encourage the government to change the rules after the fact--it's the sort of thing that comes back to bite you later.
What this indicates, though, is that we need a better set of rules:
We need better rules for winding up very large financial institutions that have gone bust. Currently the rules are such that putting them into bankruptcy threatens the whole financial system, as we saw with Lehman Brothers. This prompts the government to do something that's sort of but not exactly bankruptcy, producing this sort of ambiguous situation.
We need better rules for dealing with bonuses paid out on the basis of financial results that turn out to be wrong or misleading. (That is, the bonuses that we ought to be going after are not so much the ones being paid this year; we ought to be clawing back the bonuses paid in 2005, 2006, and 2007 when AIG and other large financial firms were being run into the ground by greedy idiots who got paid huge sums for taking gigantic bets that didn't blow up until after the bonus check cleared. If we had rules like that, the people running the company would have very different incentives when it came to betting the company.)
Having said all that, I'm kind of okay with the government changing the rules and taxing bonuses paid by firms that have been bailed out. It'll bring in a bit of extra revenue, it produces a reasonable result (people who work for firms that would be bust if it weren't for government bailouts don't get big bonuses), and it teaches people to be careful about trusting the government when large amounts of money are involved--always a good lesson.
> Punative taxation is unconstitutional. That's a well-settled area of law.
Then the legal question is: Is this punitive taxation? An argument can be made that the law extends to all companies that receive bail-out moiney, not just AIG, and that any comnpany can avoid falling under the law by paying back the bail-out money (in a reasonable time). The emotions leading to the law should not play a role in this deliberation, as little as banker's campaign contributions to politicians.
Anyway, as I wrote above, the AIG money is not my big concern but the planned trillion dollar bail-out of the banks, by guaranteeing their bad assets. Congress should demand public hearings on the plan, because the guarantees and non-recourse loans amount to a public grant that only congress is allowed to make, not the Treasury and not the Fed. Speaking much more about the AIG bail-out provides a convinient cover for Geithner's new plan, which is essentially a second Hank Paulson plan of give-aways to protect their prime constituency, the financial sector. That can happen if you choose the secretary of the Treasury from bankers all the time. It's time to end that tradition.
Taxing the bonuses is the wrong way to get them back, we all know that. Doesn't the Government now have a majority ownership on the board of AIG? Doesn't that mean Congress can break AIG's end of the contract?
And as much as I agree the initial bailouts were poorly done, it has nothing to do with balls. Unless you mean golden balls. Some banks spent $114 million dollars[1] lobbying congress in 2008, receiving $295 billion in federal aid. It wasn't reaction, it was reciprocation. I wish I could make investments that good.
Kind of like loaning some money to a friend, then getting mad about how they spend it. Or more like, your broke sibling complaining about how they spent it.
We gave (or allowed to be given) money to AIG. They will do what they do.
but it seems to me that a contractually obligated "bonus" is actually a *salary*. Why AIG doesn't just pay the people more up front is likely a tax issue, but if you sign a contract for $100 dollars and $50 of it comes at the end of the job, you expect to get your $50.
Why a "bonus" isn't tied to job performance is beyond me (and beyond my wildest salary dreams).
The public response is both predicable and pathetic. Seems we get more intense if we have a group of people to focus on and don't do so great at being "outraged" at something as nebulous as a "bailout." Then we're just complainers.
There is no chance in hell I'm returning the bonus if I'm in their shoes. I'm keeping it, staashing it away. If Congress wants to come after me, they can have it back, but otherwise it's my money. And I'm gonna spend it on a pony!
I think this "Bonusgate" is just another distraction from the bigger picture. It is also hilarious how the Democrats were trying to outdo the Republicans on their anger on this issue. Like the first commenter said, $165 million is a drop in the bucket of how much the current government is doling out. People should really be angry at the new trillion dollar toxic asset plan proposed by Obama and the treasury.
Peter T. -- Being in a "kind of" bankruptcy is not the same thing as being in bankruptcy as far as the law is concerned. It is either in bankruptcy or it is not. AIG is not even in receivership -- it is therefore subject to no government oversight.
Punative taxation is unconstitutional. That's a well-settled area of law.
If instead of crafting this reactionary bailout the government would have grown a pair and attached some rules and regulations to those billions of dollars they were throwing over the side of the inaugural floats at these failing businesses, we wouldn't be in a tizzy about these bonuses right now -- they would not have been paid.
We cannot now pile more bad law on top of the bailout.
Well, I suppose anything is possible right now, huh?
I'll just say that this is yet another unwise move.
Labels are *so* important for a shared garden. labels on the beds, labels on the rows/squares. And if any of the crops are new to any of the gardeners, keep a book with pictures handy so nobody accidentally weeds up something that was wanted.
Especially in a community garden plot, there are likely to be lots of volunteers, and if some of them turn out to be wanted, you have to adjust your labels. Your gardening partners can't read your mind!
To the legal argument:
> These bonuses were in their contract, so if you want to be upset then direct it at the people who wrote the contract (AIG). The law says AIG has to pay them.
The law says also that a bankcrupt company cannot pay bonuses without consent of the bankcruptcy judge, and AIG is in a kind of bankcruptcy, as a ward of the state. Without government billions, it would be definitely bankcrupt and there would be no money for bonuses.
> Taking the money away by taxing them at 90% is probably illegal, especially when it's being done simply to satisfy the angry mobs out there.
It's a law by congress, therefore it can be only illegal on procedural or constitutional grounds. The latter is up to the Supreme Court to decide. Any talks about "angry mobs out there" is as unimportant for legality as "greedy bankers in there", as long as the mobs are not actually outside of congress, prohibiting free deliberations. Fear of the voters, on the other hand, is no ground to dismiss a law. Payment of campaign contributions to congresspeople from banks has never been ground to dismiss a law.
To the ethics: Considering that AIG is a ward of the state, congress should feel free to decide what is best for the whole economy, not AIG executives.
Don't be too quick to assume that your GPS-enabled cell phone can help emergency personnel find you. It depends on your phone and the technology at your 911 center. They may only be able to narrow your call down to the general area where you are, not necessarily the specific address. You don't really want the paramedics going house to house to try to find you when you're in the throes of a medical emergency and can't speak or flag them down.
I think I would buy. The max speed limit being 65 is an ideal feature for a teens first car and the mpg is great. Along with price it seems to be a good option.
The bonuses are "only" some hundereds of million of dollars. The bank bail-out is growing to over a trillion. I am more angry that Goldman Sachs received billions of dollars from its contract with AIG when AIG was factually bankcrupt and only survived on government support. As you wrote, some people in AIG original insurance business might have done excellent work in 2008 and deserve some bonus - an argument more to break up AIG into good units and the rotten rest. The good units could pay their bonuses without public interference.
By printing money via the stimulus, the government is presumably valuing full employment over its mandate to control inflation. So if that's the case, we shouldn't have stagflation, but just inflation?
im in los angeles and from what i can remember... back in the 94 northridge earthquake, the only phone lines that worked were standard home phone lines. my cell did not work AT ALL.
im i crazy to think that a land line can be the only form of communication in case the big one hits?
The request has already been put in MANY times for shipping calculators. At the moment, everything I have searched for has been cheaper including shipping than anything else I have found, but I'm sure that won't be the case forever. Look for shipping estimates soon.
Funny how AIG wants to hid behind contractual obligations, but the automakers were forced to rescind on their contractual obligations to their union workers.
http://www.businessrockford.com/archive/x82782143/Sources-UAW-deal-cuts-...
Of course the government made the mistake of not spelling out the rules before hand, so now they have to live with the consequences. Some times the appearance of impropriety is as important as whether or not any thing inappropriate actually occurred.
For example our superintendent of schools just received a a $75k bonus, a week before announcing that they are cutting back on teachers due to lack of funds. Does he have to give back that money, no. Should he? It would pay the annual salary for two teachers.
I would and I would if I was one of the AIG execs. Building goodwill towards their company is part of the function of being at the top, it helps insure that you have business next year. Part of my retirement funds is invested through AIG and I have been strongly considering pulling that money even though I would take a hit financially to do so.
And if we let them go bankrupt, do they get their bonuses? I guess I'm not with you here. It seems like the same kind of creative accounting that got us into this mess to start with. Not just with AIG, but with any company that can show losses yet have ceo's or others get bonuses. Maybe too big to fail is just too damn big to start with, and part of too big is being able to float all this b.s. because it's just "too complicated".
I'm also a huge fan of RetailMeNot.com. I hadn't heard of Beat My Price, and it looks great. I gave it a try with a few items. The key thing it seems to be missing is shipping costs.
While the $50 Buy It Now price on Ebay looks great for my Hoover vacuum, with $25 shipping it ends up being $15 more than Amazon. Maybe they'll add the feature soon?
I'm glad there's someone else that pointed this out! This "bonusgate" is all smoke and mirrors to hide the truth behind the curtain.
For those unfamiliar with the toxic asset agenda, the government is going to print $1 TRILLION DOLLARS (or $1,000,000,000,000) to monetize our debts. In other words, they're printing our currency to pay off our debts with our own money! No country has ever done this successfully. In time, this will make the US dollar WORTHLESS!
If we don't take a stand, we'll be going the way of Zimbabwe or the former U.S.S.R.: paying for a loaf of bread with a wheelbarrow of money.
http://www.the912project.com
AIG was upfront about the bonus structure before the bailout money was given them, and they are not bonus payments in the traditional sense of the word. They are indeed more like salary payments. Sure, the people getting these payments earn way more than most of us, but that's a dangerous game to play. If you earn twice what your neighbor does, does that mean you should have some of your salary taken away? Salary that you were counting on. This is a smokescreen, pure and simple. We're all getting fired up over this and the nation is trillions of dollars in debt. Why get so worked up over a tiny drop in the ocean?
I know the media doesn't help with this in the way they report the numbers, but AIG recieved around $170 Billion, gave "bonuses" totaling $165 Million. (which, correctly noted by Amber is actually a kind of a misnomer).
To say that correctly, it's $170,000 Million and $165 Million.
That means the bonuses actually made up a bit less than 0.1% of the bailout money. (That's 1/1000).
To understand this in numbers that makes sense to us normal folk, that's like if i bailed out your company with $170,000 and your boss paid out $165 in bonuses to you and your colleagues.
So, don't you think this reaction is entirely, gee... disproportionate? In fact, in the face of the true cost of economic recovery failure, isn't this reaction actually insanely stupid? Shouldn't we all be angry that our congressmen are wasting more than a week on trying to recover less than 1/1000 of the money sent to ONE institution, which makes up less than less than 1% of all the recovery money we're spending anyway???
There are different ways to limit the growth of money supply. Increasing the Fed Funds rate is one way, increasing the reserve requirements another. In the end of the 70's, the Fed increased the Funds rate, accepting a severe recession. Increasing the reserve requirements makes banks less profitable, but I doubt that it would lead into a similar severe recession. In the long run, it makes the money system also more stable, because less money is created as debt and a future debt deflation would be less severe than today's. But are there any other disadvantages of increasing the reserve requirements besides making banks less profitable?
It's always dangerous to encourage the government to change the rules after the fact--it's the sort of thing that comes back to bite you later.
What this indicates, though, is that we need a better set of rules:
Having said all that, I'm kind of okay with the government changing the rules and taxing bonuses paid by firms that have been bailed out. It'll bring in a bit of extra revenue, it produces a reasonable result (people who work for firms that would be bust if it weren't for government bailouts don't get big bonuses), and it teaches people to be careful about trusting the government when large amounts of money are involved--always a good lesson.
> Punative taxation is unconstitutional. That's a well-settled area of law.
Then the legal question is: Is this punitive taxation? An argument can be made that the law extends to all companies that receive bail-out moiney, not just AIG, and that any comnpany can avoid falling under the law by paying back the bail-out money (in a reasonable time). The emotions leading to the law should not play a role in this deliberation, as little as banker's campaign contributions to politicians.
Anyway, as I wrote above, the AIG money is not my big concern but the planned trillion dollar bail-out of the banks, by guaranteeing their bad assets. Congress should demand public hearings on the plan, because the guarantees and non-recourse loans amount to a public grant that only congress is allowed to make, not the Treasury and not the Fed. Speaking much more about the AIG bail-out provides a convinient cover for Geithner's new plan, which is essentially a second Hank Paulson plan of give-aways to protect their prime constituency, the financial sector. That can happen if you choose the secretary of the Treasury from bankers all the time. It's time to end that tradition.
It will rock.
My views at http://www.rahuljauhari.net/2009/03/nanomaly.html
The attempt to tax it back is called a "Bill of Attainder."
We fought a revolution, started a country, and wrote a Constitution over that among other issues. Within that document we find:
Article I, Section 9, paragraph 3 provides that: "No Bill of Attainder or ex post facto Law will be passed."
Strange that congress cannot find the same provision.
Taxing the bonuses is the wrong way to get them back, we all know that. Doesn't the Government now have a majority ownership on the board of AIG? Doesn't that mean Congress can break AIG's end of the contract?
And as much as I agree the initial bailouts were poorly done, it has nothing to do with balls. Unless you mean golden balls. Some banks spent $114 million dollars[1] lobbying congress in 2008, receiving $295 billion in federal aid. It wasn't reaction, it was reciprocation. I wish I could make investments that good.
[1]: reuters
Kind of like loaning some money to a friend, then getting mad about how they spend it. Or more like, your broke sibling complaining about how they spent it.
We gave (or allowed to be given) money to AIG. They will do what they do.
Lets move on, there are other big fish to fry.
but it seems to me that a contractually obligated "bonus" is actually a *salary*. Why AIG doesn't just pay the people more up front is likely a tax issue, but if you sign a contract for $100 dollars and $50 of it comes at the end of the job, you expect to get your $50.
Why a "bonus" isn't tied to job performance is beyond me (and beyond my wildest salary dreams).
The public response is both predicable and pathetic. Seems we get more intense if we have a group of people to focus on and don't do so great at being "outraged" at something as nebulous as a "bailout." Then we're just complainers.
There is no chance in hell I'm returning the bonus if I'm in their shoes. I'm keeping it, staashing it away. If Congress wants to come after me, they can have it back, but otherwise it's my money. And I'm gonna spend it on a pony!
-Nate
I think this "Bonusgate" is just another distraction from the bigger picture. It is also hilarious how the Democrats were trying to outdo the Republicans on their anger on this issue. Like the first commenter said, $165 million is a drop in the bucket of how much the current government is doling out. People should really be angry at the new trillion dollar toxic asset plan proposed by Obama and the treasury.
Peter T. -- Being in a "kind of" bankruptcy is not the same thing as being in bankruptcy as far as the law is concerned. It is either in bankruptcy or it is not. AIG is not even in receivership -- it is therefore subject to no government oversight.
Punative taxation is unconstitutional. That's a well-settled area of law.
If instead of crafting this reactionary bailout the government would have grown a pair and attached some rules and regulations to those billions of dollars they were throwing over the side of the inaugural floats at these failing businesses, we wouldn't be in a tizzy about these bonuses right now -- they would not have been paid.
We cannot now pile more bad law on top of the bailout.
Well, I suppose anything is possible right now, huh?
I'll just say that this is yet another unwise move.
Labels are *so* important for a shared garden. labels on the beds, labels on the rows/squares. And if any of the crops are new to any of the gardeners, keep a book with pictures handy so nobody accidentally weeds up something that was wanted.
Especially in a community garden plot, there are likely to be lots of volunteers, and if some of them turn out to be wanted, you have to adjust your labels. Your gardening partners can't read your mind!
To the legal argument:
> These bonuses were in their contract, so if you want to be upset then direct it at the people who wrote the contract (AIG). The law says AIG has to pay them.
The law says also that a bankcrupt company cannot pay bonuses without consent of the bankcruptcy judge, and AIG is in a kind of bankcruptcy, as a ward of the state. Without government billions, it would be definitely bankcrupt and there would be no money for bonuses.
> Taking the money away by taxing them at 90% is probably illegal, especially when it's being done simply to satisfy the angry mobs out there.
It's a law by congress, therefore it can be only illegal on procedural or constitutional grounds. The latter is up to the Supreme Court to decide. Any talks about "angry mobs out there" is as unimportant for legality as "greedy bankers in there", as long as the mobs are not actually outside of congress, prohibiting free deliberations. Fear of the voters, on the other hand, is no ground to dismiss a law. Payment of campaign contributions to congresspeople from banks has never been ground to dismiss a law.
To the ethics: Considering that AIG is a ward of the state, congress should feel free to decide what is best for the whole economy, not AIG executives.
Don't be too quick to assume that your GPS-enabled cell phone can help emergency personnel find you. It depends on your phone and the technology at your 911 center. They may only be able to narrow your call down to the general area where you are, not necessarily the specific address. You don't really want the paramedics going house to house to try to find you when you're in the throes of a medical emergency and can't speak or flag them down.
I think I would buy. The max speed limit being 65 is an ideal feature for a teens first car and the mpg is great. Along with price it seems to be a good option.
The bonuses are "only" some hundereds of million of dollars. The bank bail-out is growing to over a trillion. I am more angry that Goldman Sachs received billions of dollars from its contract with AIG when AIG was factually bankcrupt and only survived on government support. As you wrote, some people in AIG original insurance business might have done excellent work in 2008 and deserve some bonus - an argument more to break up AIG into good units and the rotten rest. The good units could pay their bonuses without public interference.