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Bailout Bonuses might have been tuition money or business loans and grants


The NYT   and our venerable blog host both agree this morning that the AIG billion dollar bailout bonuses that they're doling out to the architects of the economic collapse has gotten "The People" in a furor.

And for good reason.  If some of these dollar figures are true,  we are watching "stimulus" money going right back into the same hands that created the problem in the first place. And those sleazy brokers will either tuck those millions away, far removed from anything resembling "economic stimulus" and into their off-shore accounts where they won't pay taxes, or they will head for Dubai to lounge in the sunshine along with their pals from Halliburton.

And there is no doubt what the public is thinking. The subject changes from one person to another,  but the essence of our complaints remain similar.

How many parents facing rising tuition for their children might have preferred that money was going to colleges and universities to offset those increases? 

How many more would rather see those funds going to small business as "survival grants" or small business loans, which would immediately effect the economy with that mystic thing called "stimulus".

Instead of paying these broken brokers for greedily enabling the devolution of our economic foundations,  we should be putting every "red" cent (did they always know we would be spending a deficit?) into actual economic stimulation.  But allowing these thieves to simply pass it along to their pernicious and completely culpable  "Brotherhood of Brokers" is obscene and profane, to anyone but members of that economic animal house.

It is no wonder the MSM AND the blogs are in agreement (thus far) on this issue,  usually when that occurs, the public tends to benefit.

But I suspect these greedy rich will prove their ill-gained supremacy in this matter, and like Marie Antoinette tossing cake to the rabble, they will make some token gesture to quiet public criticism.

This time, they may just be too late for their crumbs to satiate the public anger.  Their arrogant assumption of entitlement in the face of universal decline can only lead to some sort of guillotine, if not one of iron, it might very well be one of political power.  If the Republicans do not reign in "Bush's Base" of no-bid book-cooking millionaires and billionaires, they may see their party's mysterious missing head lopped off on a chopping block.

But, considering all the talk that there's no real "leader" in the Republican party, maybe that guillotine has dropped.  They are headless already.

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JEP - I don't even think Dubai is an option for the MOFO's considering Dubai is going through their own economic crisis. Not unless they plan on relocating to the ME and setting up their own kingdom there. We the people would certainly welcome their leaving. Good riddance. Or, since AIG stresses that the bonuses were contractually promised, the guys getting the 100K or more disbursements could simply elect to not collect until things are better. Unlikely, but it would be an apt olive branch to the American people.

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Maybe the lower echelons of the Broker Brotherhood would not have the resources to actually relocate (Dubai was just one option, I'm sure there's room for them in Antigua)but when you consider the incredible numbers some of them are getting for selling those swaps (they were paid to make the sale, not to make a profit, which might be a key to regulation; require profit before bonuses), some of them will be in a position to take our bailout bonuses and head for greener pastures.

You say good riddance, and I would agree, except that they still have uplinks in Antigua, and it is likely they will still be gaming the system, as long as we refuse to enforce existing laws or make new ones to that effect.
That "thought" that just came to me as I was writing, that bonuses should be tied to profits, not sales volume, is certainly something to consider.

I've been in advertising and sales in numerous capacities, and I don;t ever remember getting paid for writing paper, until that paper produced a profit. Maybe the banking industry is differ3ent, but I would guess it has more to do with the evolution of that Fellowship of Greed, the Brotherhood of Brokers, the "you scratch my back, I'll scratch yours" creed that permeates Wall Street.

If not for these brokers-turned-CEO's and then enabling their trading floor fratbro's with easy bonuses for bad business, it is unlikely this would ever have occurred.

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Honestly, JEP, it really boggles the mind to think that companies would still not realize the ire of the public!

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I think the companies do realize the ire of the public but are secure in knowing there are no consequences for their actions.

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That's why I think the names of all who took bonuses should be published. For all to see! If they're proud to take a bonus, let's all see their names!

People are tired of a "corporate" citizen that is a bad citizen.

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I don't know what the term corporate citizen really means anymore, do you?

Go on the AIG website and it says:

"AIG’s ongoing efforts to be an outstanding corporate citizen and PROMOTE RESPONSIBLE AND SUSTAINABLE BUSINESS PRACTICES are essential to our long-term business objective of creating value for our shareholders and serving the interests of our clients. "

The hypocrisy is infinite, as is the bailout money it is receiving.

TheraP, if they publish a list of those who took bonuses, what then?

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I'm against corporate "personhood" myself. Our system is out of whack!

As for what publishing the names would do, I think it would recover a lot of money. Many people would repay or refuse the bonus - to get off the list!

It's extortion. To demand a gift in order to stay at a job. Good riddance if the thieves leave the job!

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I agree with TheraP.
(hey, that rhymes, regular TPM Haiku!)

If corporate "personage" had the same obligations as it does entitlements, it might not be so egregious, but as usual, they want the benefits without the responsibility.

But just the thought that a corporation could have the rights of an individual has always made the Jefferson in me cringe.

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"all who took bonuses"
...and all who TAKE bonuses. Much of this has yet to happen, so there's both past and future disclosure we might want to see.

Curious how anyone who goes bankrupt (haven't had the pleasure) gets listed in the local paper, it seems reasonable that these bailout beneficiaries should suffer the same exposure.

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I keep thinking more deeply about that bonus based on profits v. bonus based on sales volume, and the more I consider the simple facts, the more it seems to be the very origin of the collapse in the first place.

It only makes sense that brokers, unleashed in a jungle where results are based on sales not profit, would game the system to the extreme.

Those brokers, instructed to write paper with ballooning payments as fast as they could, weren't scrutinizing the incomes or the repayment ability of their customers because it might have prevented the sale. As the inevitable interest rate jumped at readjustment, and the bankruptcies and foreclosures rose, this descent into recession and potential depression was just as inevitable.

One can only assume there is are at least a few very wealthy, terminally greedy "winners" who sold those portfolios with full knowledge that the assets behind them were overvalued and the mortgagers were short, at best, or insolvent at worst.

Thus, the last mortgagee became a victim right along with the mortgagers.

Had those brokers who first sold the mortgages been required to justify their work to receive their bonuses, this would never have occurred.

And the only people who enabled those brokers to sell those instruments were the CEO's and the boards above them.

Which leads me to wonder whether those book-cookers knew exactly what they were doing, and were, as usual, looking for short term gains regardless of the consequences for the longer term.

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Which also suggests that these bailout bonuses are really hush money, to keep those brokers from snitching on their CEO enablers...

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The two posts should be one!

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This post begat the other, you can see the thought pop up here, and after consideration, got reposted separately.

I have thus revised my theory about the Economic Animal House and the fratboy angle on why these brokers are so important to the DEO's and their toady boards.

That fraternity of brokers may well have helped establish the lawlessness in Wall Street, but these guys know but one loyalty, and that is to themselves. So while they may have enabled their broker brothers to join the frat, they are not honorable enough to extend that fellowship to protecting anyone else under these circumstances.

The bailout bonuses are hush money, plain and simple.

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Welcome news from Obama - Money quote (literally!):

I've asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole.

http://www.talkingpointsmemo.com/news/2009/03/excerpt_of_the_presidents_remarks_today_-_as_prepa.php

That was fast!

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Maybe that list of bonus recipients would be a great place to start any investigation into the economic collapse?

Might be some of them would be wise to avoid taking the money, but like a little primate caught in a Myanmar monkey trap*, these guys would rather grab he cash hiding in the coconut, so they can't pull their hand out of the hole.

Every broker who gets one of those bonuses has effectively grabbed for the peanut in that monkey trap.

*http://www.ghinsberg.com/1m5/the-burmese-monkey-trap.html

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We gave billions of dollars, with no strings and no oversight involved, to the same people that caused the global economic meltdown.

We don't have the right to act shocked at the result. A leopard does not change its spots. If we expected a different result then we are the living embodiment of insanity.

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"We don't have the right to act shocked at the result."

Speak for yourself. "WE" is a mighty big word.

WE (The People) have the right to investigate ANYTHING we damn well please, if they want to plead the 5th, let them. But no one is going to say no to this Congress the way Rove did to the 110th.

That list of Bonus Brothers is a great place to start. If they are innocent, they have nothing to fear.

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$200 million in bonuses to brokers can be converted into:

20 brand new schools at $10,000,000 each
or
200 homeless shelters at $1,000,000 each
or
400 community gardens at $500,000 each
or
5000 teachers at $40,000 a year each
or
10,000 2.5 kw wind turbines at $20,000 ea
or
20,000 student jobs at $10,000 each

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JEP07

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