From CNN.com

[tblackwynd]

"President Obama said today he will attempt to block $165 million in bonuses to executives at ailing insurance giant AIG."

I find this statement vaguely disconcerting.

Discussion welcome.

-R

Comments

[kittengrin]

Why is this disconcerting? The executives are spending public money on those bonuses. The $165M is coming from the $170 billion bailout money provided by the government, and the executives who got AIG into this financial mess in the first place haven't been held accountable for the expenditure of that public money. They're like children being handed money to buy lunch after starving, and spending it on candy instead. "Awesome, we have all this money, so now we can pay out our millions of dollars in bonuses to ourselves! Look, it's in our contract!" Yeah.

[tblackwynd]

The problem herein is two fold:

The first problem is that I cannot remember a time in my life where the government has attempted to cap earnings. Perhaps more importantly, I cannot remember a time where they attempted to do so as quickly as they are attempting to now.

This current system is flawed. The people at the top had absolutely no accountability and more power and money than they knew what to do with.

However, American capitalism has functioned in this manner for around half a century, since around the time we emerged as a global super power in the aftermath of the second world war. The system worked very well until the last ten or so years; then companies such as Enron came along, willing to do monstrous things that should be unfathomable to any business person.

Without any sort of accountability, this corruption grew unchecked throughout the system and put us in the mess we're in now. That being said, capping salaries is directly contrary to the notion of expansive capitalisim

[tblackwynd]

Sweet. Formatting nightmare.

[hacksawbebo]

I think if the masses are not only willing but clamoring to turn the responsibility of punishing companies for poor business practices, the government really doesn't have much of a choice except to get involved.

Plus, as mentioned above, it's the government's money, I'd say that the companies lost a great deal of their government autonomy when they accepted government money.

[tblackwynd]

"Plus, as mentioned above, it's the government's money, I'd say that the companies lost a great deal of their government autonomy when they accepted government money"

I concur. However, if a bank gives you a loan and doesn't say "don't buy a car with this," what is stopping you? That bank needs to work on its loan practices, in my opinion.

[berretso4]

The numbers are misleading for a reason - obviously in favor of the fact that Obama is striking down top executives, but I think we should be thinking about it more in, dare I say it, Obama's terms:

If we are willing to sacrifice any executive's bonus for the good of the country's economy, whether that is executive is at the 'top' or the 'bottom', then we should all be willing to sacrifice our own potential bonuses or benefits, if they exist, and thus (here's the kicker) nullify the very stimulus package we receive from the same plan that destroys these bonuses.

If we had the actual numbers for the individual amounts of the bonuses it would be easier to tell if they were exorbitant or practically normal.

There is no free lunch.