A.I.G. to Pay $100 Million in Bonuses After Huge Bailout

AIG bonuses are a new storm cloud over Treasury boss Giethner...
continued finger pointing! This update of 2-18-2009...

news.yahoo.com...

WASHINGTON – If not distancing itself from Treasury Secretary Timothy Geithner, the White House is placing firmly on his shoulders responsibility for how the government handled the $165 million in bonuses paid to about 400 executives and traders at American International Group Inc.

AIG’s defenders are saying there were contracts that needed to be honored. The argument goes that AIG is too big to fail. The word “bonus” has a different meaning on Wall Street as compared to Main Street.

For most of us, bonuses only come when the company is profitable, if they come at all. On Wall Street, bonuses are really payments that have been deferred until the end of the year.

Wall Street may have worked that way to this point. Those days need to end. Doing it their way got us here. It’s clear Congress, the Bush administration and the Obama administration weren’t able to help the financial companies without offering billions in free money.

The solution isn’t retroactive taxing. Adding strings or trying to claw back money after the fact is too late. Those options aren’t feasible and probably aren’t legal. Just let AIG fail. No more bailouts. Send the company to bankruptcy court and let the judge do what’s necessary to either reorganize or liquidate the business. The process is already in place. Just use it.