As many know, the administration was, among others, not happy with the language. They wanted some modifications to it. They came to us, our staff, and asked for changes, and the changes at the time did not seem that obnoxious or onerous.
Sen. Christopher Dodd • On adding a provision to the stimulus bill allowing AIG to give out massive bonuses to its employees. He was asked to make these changes by the Treasury, which seems to have a lot of power over legislation considering they’re not legislators. Dodd wants to tax the bonuses, BTW. • source
We have to continue managing our business as a business – taking account of the cold realities of competition.
AIG CEO Edward Liddy • On why they have to give out the bonuses. Essentially, as was suggested yesterday in this editorial, AIG needs to give out the bonuses to retain their employees. He’s telling this to congress right now, by the way. • source
Tearing up contracts could set a bad precedent.Obama and large swaths of the government (and large numbers of taxpayers) don’t like having to pay $165 million in bonuses, but it may just be in their best long-term interest to bite the bullet, argues Andrew Ross Sorkin. “If you think this economy is a mess now,” Sorkin argues, “imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right.” Oh boy. source
Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay.
Barack Obama • On the bonuses AIG is about to pay its investors. The outrage is heating up by the day, as you might guess; Obama wants his treasury secretary to pursue “every legal avenue” to prevent the bonuses from coming out. • source
We’ve seen some progress in the financial markets, absolutely. But until we get that stabilized and working normally, we’re not going to see recovery.
Federal Reserve chairman Ben Bernanke • On the recession and the biggest problem – the clogged up credit and financial markets. Bernanke said that if things ease up, the recession could end this year. Also, he was on “60 Minutes” last night, where he mentioned he’s “slammed the phone more than a few times on discussing AIG.” • source
Good for him! He’s a cool guy. Frank, a Democrat, said he’ll look into taking the roughly $1 billion in bonuses, which the company says it’s legally obligated to give out, away from the company. “We need to find out whether these bonuses are legally recoverable,” Frank said. AIG Financial Products is receiving half of the bonuses – they’re the part of the company that made the credit default swaps that screwed up the economy. source