People should be outraged about this and not AIG bonues

[Anonymous]

It is funny how the media jumps on certain issues but completely ignores others. A prime example is Yucca mountain in NV. For those of you who know nothing here is some background:

In a blow to the nuclear power industry, the budget released by President Obama last week eliminates most funding for Yucca Mountain, the Nevada site that for decades has been proposed for the permanent burial of radioactive nuclear waste.

The decision will likely be an expensive one, considering how much money the federal government might end up owing the utility industry, and how much—up to $10.4 billion—has already been spent and will have been wasted on the search for a nuclear waste repository since 1983.

Bascially, President Obama has wasted $10.4 billion already spent on Yucaa mountain not to mention all of the litigation that has been on-going for the last 10 years related to this issue, which is probably close to another $100 million in attorney, consultant fees and damage awards from the courts.

It just frustrates me that the mass population gets so upset about $165 million in bonuses that forces the House to pass some bill that is unconstitutional and will eventually be overturned by the Supreme Court if someone fights it but completely ignores a waste of over $10 billion.

If you are unfamiliar with Yucaa mountain please research it and you too will soon be outraged with how much money has been wasted.

Does anyone care that we have wasted $10 billion on something that will never be used or do you only care about $165 million in bonuses?

[Anonymous]

Fair enough. But Yucca Mountain is fairly controversial and has been since I was in college in the 90's. The location, the need, the role of nuclear power in general. So, there has been a lot of money spent on this before Obama came into the picture.

But, you're bigger point is well-taken. I think there are plenty of things that should be getting the rage directed at AIG bonuses. While I don't like that situation, the fact is that I don't like the government coming in and voiding private contracts (esp after the work called for in them has been performed). That's a slippery slope.

[Anonymous]

Very scary indeed but we are moving toward more and more toward socialism..it's a very scary time. I also feel for those AIG folks who came in and have done a good job and now are going to have to deal with the litigation of having to get their money. A lot of business work on the bonus system so to have your bonus 90% taxed is basically not paying you and finding this out after the fact when you have most likely organized your family's structure based on that bonus is awful and un American.

[Anonymous]

And if we are serious about becoming energy independent and helping the environment, nuclear energy has to be part of our national energy policy.

[Anonymous]

I completely agree with OP ... I find it scary that I am no longer alarmed by the number $10 billion ... it seems so small after the trillions that have now become normal talking points.

[Anonymous]

What about the Federal Reserve push trillions of dollars in to the econ? Our great, great, great-grandchildren are going to be in debt! Every dollar that the Federal Reserve loans the US Government has interest. Where do they get the money to cover the interest? The Federal Reserve! Now they are taxing the AIG bonuses! WTF. Just let them keep it. That is like getting a loan from the bank, then saying..oh I need all of this can I give it back? You are still going to have to pay the interest on it.

[Anonymous]

Anonymous wrote:Very scary indeed but we are moving toward more and more toward socialism..it's a very scary time. I also feel for those AIG folks who came in and have done a good job and now are going to have to deal with the litigation of having to get their money. A lot of business work on the bonus system so to have your bonus 90% taxed is basically not paying you and finding this out after the fact when you have most likely organized your family's structure based on that bonus is awful and un American.

The very people from the very unit that tanked their company and the rest of the US & world economy were slated to receive these bonuses. They should have seen the writing on the wall earlier last year when their company was in meltdown mode the 1st time and re-budgeted their family entitlements for the year. Boo hoo, where is my violin. Don't go into how the janitors will suffer because they were also going to get a bonus. Give me a break.

[Anonymous]

Completely agree with 10: 46 PP. The bigger picture in all of this is that we Americans need to rethink our idea of entitlement and what we deserve. The mentality that "I work so hard to earn my bonus by screwing others out of money, and becuase of that hard work I DESERVE my 5 million dollar home, and 4 more vacations homes, etc, etc." is completely out of line. Not saying that all business practices are unethical or unjust, but the fact remains that bloated salaries and bloated egos have now depleted our economy, and the global economy as well. Call me socialist, but I think it's wrong that 95% of US wealth is owned by 5% of the US population.

[Anonymous]

There is no doubt it is outrageous. But do you want the government going around voiding contracts that is due -quite frankly- to pure populist rage? These are private contracts entered into between private citizens. However wrong, bone-headed, etc. that they are. I'm just not sure I am comfortable with this.

And, I agree with PP is that our current distribution of wealth is not good. But, the torch and pitchforks response to this aspect of the economy/bailout is very troubling to me.

[Anonymous]

I thought this was a good piece in the Post. Pearlstein has been terrific in his columns throughout this mess (whether you agree with him or not -and I don't always- his articles have had lots of good information and frank perspectives).

Let's Put Down the Pitchforks

By Steven Pearlstein
Friday, March 20, 2009; Page D01

We're angry. We're frustrated. We feel cheated and abused. We're not going to take it anymore.

But then again, we don't have much choice, do we? Sure, we can demand that a few more heads roll on Wall Street, or at the Treasury, or that a few hundred million are clawed back from financiers who never deserved it. But the reality is that no matter what we do now, tens of trillions of dollars in wealth have been lost. All that's left is simply an elaborate exercise in settling up the accounts.

At the end of the day, the thing to get outraged about is not the $440 million in bonuses at AIG or the $10 million that Citigroup is spending to redesign its shrunken executive suite. These may seem like princely sums, but they are almost insignificant compared with the real outrage: the hundreds of billion dollars of taxpayer funds that have been put at risk to keep AIG and Citi from failing and taking the whole financial system down with them. Let's keep our attention on the elephant rather than the pimples on its behind.

I realize that collective expressions of public anger can serve a useful purpose. At times like these, it feels good and is a way for a political system to let off some steam before a more dangerous explosion occurs. More importantly, it builds political momentum for sweeping reform of the regulatory apparatus while scaring the bejeezus out of people on Wall Street, who will now think long and hard the next time they get the urge to take excessive risks with other people's money.

But there's a danger in letting this outrage get to the point that it undermines the effort to contain the financial crisis. And with Congress now rushing to pass legislation taxing away the bonuses of every banker at every bank or financial institution that takes government money, that point seems to have been reached.


A few things to keep in mind.

First, as I've said in the past, this isn't about fairness. There's nothing remotely fair about using taxpayer money to rescue a free-market financial system from the mistakes of the financiers. But the reality is that we can punish the bankers or we can save the banking system, but we can't do both at the same time.

Nor is it fair, as The Great Santelli has declared on CNBC, that homeowners who have paid their bills and have been careful not to take on too much credit are now being asked to provide relief to homeowners who have not. Unfortunately, the price of righteous indignation is a wave of foreclosures, a further decline in home values and billions of dollars of additional loan losses at banks that are already on government life support. Given the financial and economic hits they have already taken, that's a price that most "innocent" homeowners and taxpayers would probably prefer not to pay.

During a financial crisis, fairness is a luxury we cannot afford. During the 1930s, bankers and financiers lost everything, but the outcome -- a decade-long depression -- was hardly fair to the ordinary American. The key question is not whether something is fair, but whether it helps get us through this mess faster and at a lower cost.

At the moment, the Treasury is working (and working and working) on ways to entice private capital back into the banking and shadow-banking system by offering government financing and guarantees against losses. Every dollar of private capital that can be attracted back into the system is a dollar that the Treasury won't have to borrow or the Federal Reserve won't have to print. And only with the return of private capital will the government be able to get back the rescue money it has committed.

But how eager do you think private equity and hedge funds will be to invest those billions of dollars if they fear that their participation will subject them to front-page accusations, congressional inquiries and public outrage over how much they might be paying for bonuses or employee travel or office decoration? Will they participate if they think that Congress, in a moment of populist pique, will try to tax back their profits if they earn more than originally expected?

As the financiers see it, there's a big difference between the government that sets tough terms for participation in its financial rescue programs and a government that is a fickle and unreliable partner, that tries to micromanage their businesses and changes the rules of the game with every zig and zag of public opinion. That may be an exaggerated view, but it is the financiers' view and one we need to be mindful of, since at this point we need their money and cooperation as much as they need ours.

A final point on outrage: We need to save some of it for ourselves. While it was Wall Street that got rich by peddling new ways for Americans to live beyond their means, the decision to do so was ours. It was we who ran up the credit card bills, we who drew down the equity in our homes and we who refused to tax ourselves for the government services we demanded. Wall Street bankers may have been the pushers, but it was we Americans who became addicted to the easy credit.

[Anonymous]

Anonymous wrote:The very people from the very unit that tanked their company and the rest of the US & world economy were slated to receive these bonuses. They should have seen the writing on the wall earlier last year when their company was in meltdown mode the 1st time and re-budgeted their family entitlements for the year. Boo hoo, where is my violin. Don't go into how the janitors will suffer because they were also going to get a bonus. Give me a break.

Maybe you should stick to the violin and leave the commenting to those who actually know the facts. (No one in this thread but you mentioned the janitors.) The top 7 executives have declined their bonuses so we are talking about the folks in the middle. Most of the AIG employees you mention that "tanked the company" are no longer with AIG. Rather, we are talking about bonuses to the employees who are trying to save AIG. Did you know they have already reduced the derivative-based business that sank the company from about 85 billion to less than 20 billion? So you are completely wrong but since you don't care about family budgets please send all your earnings to the federal government as a gift to reduce our debt. So, to be clear, using small words so you will understand, these bonuses are going to people trying to save the company so as to save all the companies that rely on AIG to insure them. Believe me, you want to make sure these folks get paid because without them AIG will tank TARP or no TARP and that would surely plunge our economy further into recession/depression - and then all our families' budgets would be even more effected.

[Anonymous]

Anonymous wrote:Completely agree with 10: 46 PP. The bigger picture in all of this is that we Americans need to rethink our idea of entitlement and what we deserve. The mentality that "I work so hard to earn my bonus by screwing others out of money, and becuase of that hard work I DESERVE my 5 million dollar home, and 4 more vacations homes, etc, etc." is completely out of line. Not saying that all business practices are unethical or unjust, but the fact remains that bloated salaries and bloated egos have now depleted our economy, and the global economy as well. Call me socialist, but I think it's wrong that 95% of US wealth is owned by 5% of the US population.

OK - you are a socialist... How about this - instead of worrying about how to get a slice of someone else's pie why don't you make your own pie. The faulty logic of your assumptions is that the American economy is one pie. If someone has a larger slice it is because they have made someone else's slice smaller. Rather, I see the American economy as an economy of opportunity where each individual has a chance to make his own pie.

That is why soooooooo many immigrants have come here over the years - the opportunity to make their own destiny. That is the American dream. Of course not everyone succeeds but at least here at this time still you are not shackled by the restrictions found in many other nations (particularly the ones that are socialist or socialist leaning.)

[Anonymous]

If you missed the boat and did not sieze the opportunity when the getting was good, then you weren't trying or looking hard enough.

Even I, with no college education, who grew up moving sometimes up to 3xs in a year due to eviction and now have a dad who lives on the streets of DC homeless figured out how to get a piece of the pie. The commonly held notion of the liberal intelligista that some people have NO OPPORTUNITY is complete bullshit. Maybe they feel some sort of guilt that mom and dad paid for 6 years at Georgetown..I don't know.

Difference between those who missed the boat and me is that I did not wait on someone to pull me up, I went out and figured out how to work hard. I would look at rich people walking by me on a daily basis and say to myself, "that is going to be me" and I figured out how to do it. I did not get "lucky" nor did I benefit from being part of an upper or even middle class peer group. It's called working smart and showing drive and competence.

[Anonymous]

I reserve the right to be outraged by both.