.
That is why lawyers are known to be scum.

darktood on March 18, 2009 at 6:42 AM

Then they might as well be useful scum.

Am I the only one that see’s that obama and congress are raping the american tax payer at every turn?

We cannot let them do that to the AIG weenies because then they can turn around and do it to ALL OF US!!!!

You don’t need a spammy link to do it.
sethstorm on March 17, 2009 at 10:59 PM

that wasn’t intended to be one – I’m not sure how that particular link was posted

These problems were expected and I assure you there’s going to be more, thats why they said ‘oh I didnt have time to read anything’ but we had to sign it since the country was crumbling. Hell they even have the Kremlin fooled. Sit back now and watch our market repair itself because I think they have run out of things to screw it up with. Well, there’s the military cuts coming, but we’ll see.
Seems like Billy C. x10 as far as being ‘asleep at the switch’ is concerned. AND maybe OBL is still out there….maybe. Vote these jokers the hell out, they sure are showing how much they deserve it and hopefully America won’t have another 9/11 in the meantime. FLicking teabags isnt going to fix this. VOTE these jokers OUT!

There’s nothing to be done?

Goodness.

Does AIG think the American public is a bunch of rubes?

A legion of lawyers makes its living challenging such contracts, under a variety of legal theories, including fraud.

Walk into any civil courthouse across the country and just watch.

There is also no shortage of theories from financial analysts on how to give AIG leverage to renegotiate those contracts, including making the AIG business unit that cut those bad deals into a separate company and threatening to put it into bankruptcy and end its obligation to pay the bonuses.

In short, there’s plenty that can be done to stop payment on those bonuses or radically slash them.
- Chicago Sun-Times

Doctor Zero on March 17, 2009 at 11:51 PM

I know, that scared me too. Once we resort to use of force, we are no different from any police state. It is a road to ruin.

Doctor Zero on March 17, 2009 at 11:46 PM

Thanks for your comment, Doctor Zero. Maybe we should start our own blog j/k :-)

I agree with your line of reasoning, you are absolutely correct that we cannot keep borrowing from our future to service the present. However, what if we did not bail out the banks? Undoubtedly, that would have resulted in significantly worse Libor spreads which would have continued for a very long time. Beyond a certain period of time, it could potentially result in a depression. Would that not result in the following?

(1) loss in productivity for a generation (those who are at the peak of their intellectual prowess would be going around looking for ways to pay their mortgage/rent)

(2) death of multiple companies which are smaller players in the market, yet create outstanding products (like AMD does in a semiconductor market dominated by Intel)

(3) create a generation that would be terrified to invest (our grandparents’ generation comes to mind)

So, while a lot of impacts may not be directly quantifiable, there are good reasons to prevent a depression from happening, even if it looks like a losing proposition on face value. It goes against my instincts and my philosophy, too, but I think it is a reasonable risk. Please feel free to opine otherwise.

Force is force whether it be by gun or practicality.

sethstorm on March 17, 2009 at 5:40 PM

That’s the single most Orwellian thing I’ve heard since Orwell died. Practicality is “force?” That’s the logic of totalitarianism, no different than the hard socialist idea that “freedom” means every citizen must be free from hunger and thirst, so the assets of working people must be seized by dictatorial force and used to provide food and housing to those who don’t work. “Freedom is slavery.” What a chilling line of reasoning.

But the trillion that you say was damaged, does not really disappear, right? Say the trillion that was used to bail out all the banks, really paid for the CDS’-es they promised, and finally were forced to pay back as the foreclosures hit the market. In effect, they are paying for the homes given to unworthy customers (for whatever reason). So, in effect, it is ensuring that these homeowners keep spending, which will help re-trigger the economy. I am not convinced you made an analytical case that this trillion is going into a black hole.

peter_griffin on March 17, 2009 at 5:04 PM

It would be more accurate to say this trillion dollars is being pulled out of a black hole – it’s deficit spending being extracted from future generations, who have no ability to defend themselves or agree to these spending programs. (Wouldn’t massive deficit spending therefore qualify as “taxation without representation?”)

Not only will every one of those trillion dollars cost more than one dollar to deliver, due to the cost of servicing the debt, but it will produce less than one dollar worth of value, because it is money being reallocated by political demands instead of market logic. Propping up failed banks and auto companies involves imposing government power on the economy to force it to do the opposite of what it wants to do, although in the case of the banks, it was largely government pressure that forced them to make the poor decisions that led to their downfall.

Consider the plight of the auto companies. Put simply, they have a ludicrous business model that causes them to lose money on every car they build, because their union labor costs them far more than it’s worth in terms of value. To use a number I’ve heard kicked around, something like $2000.00 is lost on every Ford and GM vehicle due to inflated labor costs. The obvious free market solutions would be (1) renegotiate labor contracts to reduce cost to realistic levels, (2) charge more for the cars to make the company profitable, or (3) go out of business because the business model is unsustainable, freeing up the mass of Ford and GM customers to be snapped up in a competitive market battle by other car companies. The government works with the labor unions to make option 1 impossible, and it just pumped hundreds of billions of dollars into these companies to forestall option 3 – which irrationally diverts market forces by pumping money from outside the market, seized from taxpayers and their children, into failed enterprises. This is not only immoral and unfair to the taxpayers, it is also unfair to the other auto companies, which are denied their chance to grab the sizable market share that would be released by the failure of Ford and GM.

Option 2 would be the most logical and obvious course of action – raise the price of the cars to cover the bloated labor costs. Of course, if the auto makers did that, their sales would decline sharply because they would not be competitive with the companies that are already eating their lunch. Few car buyers would cheerfully fork over an extra $2000 to keep the lavish benefits of union workers flowing. In fact, almost none of them would, especially if the purpose of the $2000 price increase was made clear to them (a “Union Benefits Surcharge” line item on the sticker.) The government bailout therefore relieves the actual auto buyers of the responsibility for paying that $2000 per car, and disperses it among taxpayers and future taxpayers – invalidating their freedom of choice by forcing them to buy a little piece of a Ford no matter what car they choose to drive. It is a horribly unfair and inefficient system, bleeding away the value of each dollar as it is routed through Washington and re-directed by politicians.

The flow of money in a free market passes from consumers to businesses, who become consumers. Money passed through the government loses its value because the government adds no value, beyond the minimal services it should be performing – but aside from national defense, rarely performs well, or even bothers to perform at all. The fatcat executive or investor who buys a yacht did something to earn that money – he returned some value to the system, and if he doesn’t return sufficient value for his salary and bonuses, the system will eventually reject him. When Barney Frank buys a yacht, he uses gigantic amounts of money he did absolutely nothing to earn – even ignoring the massive damage he did to the economy, his activities create no market value, beyond a minimal, justifiable regulatory role for which he should earn a minimal compensation. As we know, most of Barney Frank’s millions are pure graft – political payoffs from wealthy friends who are essentially purchasing power from outside the free market, and using it to distort the market. And, unlike the fat cat executive who will be expelled by the system if he keeps making stupid mistakes, Barney Frank will never suffer any personal losses as the consequences of his failure. As we have seen, his influence on the markets is at least as likely to increase as diminish, even after doing an amount of economic damage that would have made Hitlers’ top generals drool with envy. He’s Senator-for-Life from a state that will never vote him out of office.

No system can survive and prosper when it is controlled by agencies that exist outside its feedback loop. When cars replaced horses, the buggy whip industry died off. In fascist America 2009, if the buggy whip makers were wise enough to purchase political influence with the Obama Administration, they would never be allowed to die off – there would be billion dollar subsidies for buggy whips. Money seized and spent by the government is wealth lost, because it is no longer available for the free market to distribute efficiently, according to market forces.

Given that the Government owns 80% of AIG, maybe they should force a board meeting and vote on new members. AIG made no promises not to do what has just happened, and the Government can only close the barn door after the cows have all run out.

Again, we need to leave the ex post facto laws and bills of attainder to the Democrats — the Republicans should stay well away.

HIGH IMPACT – Thanks to our stimulus spending bill search engine, we discovered that Obama granted AIG a free legal pass to give high bonuses because of the following stipulation in Obama’s stimulus bill he personally orchestrated and signed into law:

From page H1412 of the Final Stimulus Bill, “SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE:

“(iii) The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a writte employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.”

This amendment provides an exception for contractually obligated bonuses agreed on before Feb. 11, 2009, which exempts the very AIG bonuses Obama is condemning every single chance he gets. The amendment is in the final version and is law.

Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org — According to the Wall Street Journal, Sen. Dodd placed this section into the final stimulus bill, making him responsible, along with Obama, for AIG receiving these bonuses.

http://www.butasforme.com/2009/03/17/obamas-stimulus-bill-explicitly-grants-aig-the-legal-right-to-hand-out-bonuses/

FDIC tells good bank to be more risky

xiao_en on March 17, 2009 at 10:45 PM

You don’t need a spammy link to do it.

sethstorm on March 17, 2009 at 10:47 PM

That’s why I made it a point to not listen to any populist journalist at all. They are taking the easy way out – trying to tap populist sentiments without doing the hard legwork that journalists need to do to get *actual* information. Anyone can express an opinion, but it takes hard work and discipline to get to facts, specially when there are parties trying to shield them.

peter_griffin on March 17, 2009 at 6:50 PM

Dobbs and Cafferty at least haven’t advocated some of the things that the extremists at Fox advocate.

That’s why I am a lot more inclined to give them the proverbial time of day and watch them instead.

FDIC tells good bank to be more risky

肖恩

You’re painting with too broad of a brush. You must be a RINO yourself.

fogw on March 17, 2009 at 9:48 AM

I see you posit nothing constructive. No points or facts to refute me you just offer your opinion and call me a RINO as if that suddenly makes you right. You dismiss any idea that does not fit your comfortable view of the world. You are what’s wrong with the republican party my friend. You heard it here first.