I totally agree, What group of individuals gave AIG the power to reach into your pocket? And today we will see that same group point the fingers and lead the lynch mob.

I know that you all want to really make all the parties look bad trying to hold them accountable and also to get revenge if not the money back but have you all forgotten that our "creditors", the Chinese are watching and how weak we look as a credit risk to them? Increase the risk and the interest rate goes up too!

Bill45 is right. The senates own Christopher Dodd wrote the provision into the bail out that they would honor all the bonuses. Our represetatives signed off and approved of this, then Obama signed it. Their outrage is false and is a "show" in front of the American people designed to make us think they care. They wrote the bailout plan and approved of it. Dodd was the number 1 recipient of AIG campaign donations and Obama was second on their list, both to the tune of about $100,000 each. Our represetatives have sold out the American people. They approved the billions to bail out this failed enterprise. They should be allowed to go bankrupt. I ask why are they taking our money and giving it to a compnay that engages in risky business practices, practices that would bankrupt them under normal circumstances. That's the way it's supposed to work. You make reckless bets, you lose. Follow the campaign money and maybe you can understand why they are being bailed out. It's sicker than sick and then they have the audacity to to grandstand on TV as if they are concerned. If they wouldn't have bailed them out and basically tossed them our money unconditionally, then none of this would have happened. They should be outraged at themselves and we should be outraged that our represetatives are selling us down a sewage filled river.  

I think this bonus situation is just a smokescreen for the real issue, but I don't know what that issue is yet.

I have a very bad feeling that many people in DC have connections with AIG, and it's going to get nasty, fast.

Yes, and we keep re-electing them! So the real culprit is in the mirror! Suckers!

Exactly! I blame Congress, back in 2000 when Clinton was still in office he signed the Commodity Futures Modernization Act that relaxed restrictions for risky betting like credit default swaps. There was an amendment that would have prevented it but once lobbyist heard about it they made sure to get rid of it.

Greg, the real issue is that Congress does not want the American people to DEMAND an in investigation into how they created this mess many years ago. Once upon a time a major investigation was done with Watergate; I'd say this debacle ranks as something deserving the same kind of investigation but no one is suggesting it because too many career incompetents will find themselves voted out next time around.

I did not approve of Grassleys call for AIG to take the Japenese approach for accepting bonuses. I do however think the American people should call for a modern type of Japenese approach for Congress. We need to take the sword and cut Congress right out of office, an opportunity we will have starting in 2010. We have to be accountable for all our money, how we earn it, when we file taxes yet we don't demand accountibility from those that take our money. Wake up America, we have every right to know where it is going.

No more rushing bills through, line item vetoes, and term limits are needed in this country.

Right!!

They questioned the car about everything; what their business plan was, would they be able to stay in business, etc. ALL FOR $30 BILLION APIECE. But when it comes to $160 BILLION+++ they didn't ask questions....I guess they were afraid to.

Congress as well as the treasury secretary are to blame. Specifically, read the tarp and bailout legislation, the treasury secretary has full control. Paulson and Geitner both knew that these payouts were in there and if they didn't they should have. Does anybody in Washington read the legislation that they vote on. If they did then they should be looking in the mirror!

The reason AIG was bailed out in the first place, was because all the federal pensions are guaranteed through AIG.

Now we all know the real reason the government said AIG was too big to fail.

Congress is ultimately at fault because they should have never passed the bill to give AIG money in the first place. Bill Clinton and Alan Greenspan got the whole mess started in the first place. See paragraphs are from an MSNBC article yesterday about AIG.

In fact, it was a law approved by Congress in 2000 that allowed companies to place tens of trillions of dollars of these risky credit default swap bets.

After the 1998 collapse of Long Term Capital Management, a giant hedge fund that pioneered the use of derivatives, the Fed engineered a rescue to prevent the unwinding of risky bets from spreading to the larger financial system. That brought for tighter regulation of derivatives, including a push for greater derivatives regulation at the Commodity Futures Trading Commission, led by a former Wall Street attorney named Brooksley Born.

But strong opposition to the proposal from then-Fed Chairman Alan Greenspan and senior Clinton administration officials sank the idea. On Dec. 21, 2000, President Clinton signed into law the Commodity Futures Modernization Act, which further eased restrictions on derivatives like credit default swaps.

Congress wrote the stimulus bill that specifically allowed this to happen. Obama voted for the bill as did Chris Dodd.

I am afraid that the entire discussion about bonusses is a red herring that deflects attention away from the money that really matters; the $80 BILLION that was paid out to a bunch of wall street gamblers by AIG.

I would like to know how much of the $80 BILLION money went to banks that had simply placed speculative bets without being party to the original transactions and why their credit default swaps did not simply lapse or were voided.

If some of the $80 BILLION was paid to cover toxic assets, these assets were never toxic in the first place! Are the banks double dipping? who is in charge of checking that? Forget the $160 million in bonuses, that is chickenfeed compared to the MUCH larger fraud that is going on!

ONE PERSON in particular. CHRISTOPHER DODD! Who do you think the sleazeball was that added the amendment to the stimulis bill? And now he's SHOCKED? Oh God, 900 comedians out of work but he still makes jokes. I ain't laughing.

No one party is to blame here, I believe AIG holds our Congressmen's pensions and both parties benefit from it. WE THE PEOPLE want the truth and fix his thing and after we have recovered, JUST FOLLOW THE MONEY.

The whole mess is largely the democratic congress's fault. It is interesting that this was not a choice of the liberal media's survey.

Congress wasn't listed because it is run by the democrats along with this news network.

Wrong. The rules passed by Congress that allowed much of this mess to occur with AIG was passed in 2000 which was largely a Republican Congress. Democrats didn't take a slight majority until 2006. Check the facts again.

Where was the democratic congress when AIG paid over $60 billion of their bailout money to European banks that were in trouble. Congress was supposed to be watching how this bailout money was being used since it is the taxpayers money that they are using.

Don't get me wrong. I am not a republican or democrat. I am an independent and therefore, I can see clearly who is to blame and when, because I have no loyalty to either party, only to this country.

Fannie Mae just reported that they are giving big bonuses to their top four executives, and Freddie Mac is planning to to the same. Now they will probably ask for more bailout money.

The fact is there is enough blame to go around for everyone. I think folks on both sides of the aisle are involved here. However, without question, the Bush administration and Paulson were the primary parties who gave something like $38 billion to AIG as a loan from the Federal Reserve back at the end of 2008. It was not part of the TARP money passed this year. The money given out in 2008 was specifically questioned by members of Congress and the American people as to how the money would be regulated and accounted for. Bush wanted Paulson to have 100% control of the money with no oversight from anyone else!! Paulson asked fro complete control of the money as well. When people began to ask about controlling the misuse of these funds and the potential for paying out of bonuses and buying corporate jets etc., it was the Bush administration who said in so many words, "...we can't tell them how to spend the money; the government can't do that." Obama has never voiced that line of reasoning nor has he promoted any such measures along those lines. I can't believe people are conveniently forgetting this about the final days of the Bush nightmare.

$85 billion AIG bailout initiated in September of 2008 before the current admin took office. To some of you, I'm just sayin'.... more than one responsible party here...

The nightmare is only beginning. ACORN is participating in the census bureau counting next year even though they had conducted voter fraud. And now Nancy Pelosi is telling immigrants that for the Immigration Service to conduct raids to deport illegal aliens is un-American. The illegals get free health care, free education, etc., but Americans and LEGAL aliens don't get those priviledges. That is what is un-American. Try going down to Mexico to get free healthcare and see what happens. Our deficit would be paid off in no time at all if we stop giving freebies to illegals. Not to mention they populate the majority of prisons.

The election of 2010 can't come soon enough! goodbye CONGRESS

SuzyQ - for someone who claims NOT to be a Republican you are looking very red around the edges. Also, the issues you raised here are completely off topic to this discussion. Anyway, you can rest easy now. I just heard President Obama say in California that it's time to move past all this petty bickering and fault finding. He said he will take the blame for AIG so that should make everyone looking to get a free punch in on him very happy.

Really, this poll is poor. Congress needs to be on the list. They are by far more responsible than anyone else. A close 2nd would be Geitner and Dodd. I would not be in agreement with many in naming Bush or Obama- there are too many way more responsible and with a much more direct hand in the whole mess than either President

Congress is definitly thinking ahead. Put all the dirt on the carpet now, walk on it for two years, and by 2010 you will have all foregotten about it. It happens every day.

Wil123 makes a very good point...."In fact, it was a law approved by Congress in 2000 that allowed companies to place tens of trillions of dollars of these risky credit default swap bets.....That brought for tighter regulation of derivatives........But strong opposition to the proposal from then-Fed Chairman Alan Greenspan and senior Clinton administration officials sank the idea. On Dec. 21, 2000, President Clinton signed into law the Commodity Futures Modernization Act, which further eased restrictions on derivatives like credit default swaps."

I would love to know what research was done at this time in relation to relaxing restrictions and regulations. Did *anyone* in the decision tree think this through and come to the conclusion that relaxing the rules and regulations had (and still has) the potential to collapse the entire global financial system? Perhaps someone with access to the archives can check this out. Took eight years to come very very close to this. Most of us will be paying for it for a very very long time. Almost looks like the financial community has a razor sharp agenda which has been playing out for years and years with a legislative tweak here and another there.

You got it right! Congress has been careless with US money and now the world's money and they've been so for 30 years. We are simply ungoverned. The middle class is now the missing class thanks to Congress! Hold their feet to the fire or we will never recover. Stop the pork and stop balancing federal discretionary spending against Social Security and Medicare surpluses. We are spending our own retirement funds and the average American doesn't even know it. The average American trusts Congress and the US Government to GOVERN WISELY, 30 years ago, that would have been REASONABLE. No longer. We need to restore governance, ethical, healthy governance (By the way, I love free enterprise, but not the kind that permits the unprecedented Wall Street fraud and associated theft of our money and the world's money that has gone on.)

I am so sad for all of us, Americans are so trusting. This is a great nation, let's restore it to great nation status. The world needs for us to do so.

Dems had things in the original bill to stop these very bonuses - the lobbiests and their Republican counterparts in the congress removed them. Now those same Republicans (yes, they are some of the few still there) are yelling the loudest and blaming Obama.

Well, it looks like the Dems - led by Barney - is going to make a concerted effort to get this money back.

I think these people are crooks and should all be fired and bonuses taken away, but let's all keep this in logical perspective - do you know that these bonuses only account for about 1% of the money these people were given? If someone loans you $100 dollars to go buy food and you spend $1 on a pack of gum, do they tell you that you should go "commit suicide"? Prosecute them to the fullest extent of the law if they don't return the cash, but enough finger pointing - just get it done.

teach-646943 — do you have a source for this?

teach I think you are off the mark here blaming the republicans. They after all were practically eliminated from any discussion on the bailout.

teach-In the TARP bill not 1 Republican voted for it because there wasn't any provision for oversight along with other oversight issues.  The Dems own this 100%.

Teach - Get your facts straight. The tarp and bailout legislation clearly states the treasury secretary has full control over this. Paulson and Geitner own this. They knew those bonuses were there and did nothing and if they didn't they should have. The Dems have been running the Senate and the House for over 2 years. They own this and all the other massive spending that is going on. Your great, great grandchildren will not have this debt paid off that the Dems are racking up. This certainly is change we can believe in. By the way Barney Frank is a joke. I believe he said a year and a half ago that Freddie and Fannie had no financial problems. Maybe he should have been paying attention to their financial balance sheets instead of what was under their sheets.

Teach you are a kool-aid drinking moron who probably things Keith Olberman is a quality journalist!

Name me one republican besides Spector and the two Blue Dogs from Maine that actually signed on to this bill. Dodd pulled the stipulation at the last minute so AIG can receive their bonus.

teach you need to go back to school and learn a few things. The democrats are "incharge" of house and congress, so why blame the republicans., like obama, because you can? Vote somemore morons into Washington. Thats what they ALL are now, they have no clue what is going on. Cant wait to see the situation in 4 years!!!!

Teach - you really know how to get attention. Just make up a bunch of lies claiming the dems did something right. Which they never have

Teach,

You are so very wrong about that. I assume you are a teacher or previous one. I used to work with teachers and I found that just about all of them would vote for Charles Manson if he ran for president rather than go against their party. In other words you believe that everything wrong is the republicans fault and anything that goes right is due to democrats. What a fish bowl you live in.

It was Dodd who put the stipulation in the stimulus signed in FEB that agreed to pay out those bonuses....read the news....it is everywhere.

C'mon JM. You know that the idiot electorate is just going to re-elect the dumbasses again and again and again. The American people have themselves to blame. As a nation, we have lost our way. Take a look at the idiots we put in Congress and in the White House. Sad. Pathetic really.

Teach, I think I know you. Your the one who has the OBAMA/BIDEN sticker right above your RAINBOW COALITION sticker. Do you teach at Berkley? Go have a bowl of rainbow utopia jello and fire up another big one. Then get your facts straight. LOL

But Congress is preforming. Just watch the ACT they put on for you today. Bonuses for performance.

The Congress should definitely be on the list. Why aren't they? Because they voted to let it happen, starting with Dodd that inserted the clause that bonuses enacted before Feb 2009 should be paid. Did anyone hear about it before the bill was passed; heck no, because nobody had time to read the dang thing before it went flying through.

Even as the company was failing, who received contributions from AIG: Dodd, 100, 000+, Obama, 100,000, McCain, 50,000, Clinton, 35,000; anyone see a pattern here?

When some people voted for change, they didn't realize the change really needed to be the Congress. Pelosi, Frank, Reid, etc, that's where the change was needed. Ask why there has been no investigation into what led us into this mess, the housing debacle being the place to start. The Repubs started asking questions about Fannie and Freddie in 2000 but Frank and others keep saying all was well. Neither side of the aisle pushed for answers, pushed for an investigation, they all dropped the ball. Why? Because career polititions have no fear in losing their jobs as long as they pretend to show outrage at what is happening. As long as they know they can keep getting away with just raising taxes to cover their a$$es, they will continue as they have in the past.

Don't tell me you are actually implying that not one single republican recieved one cent in campaign contributions from AIG? And how could anyone blame Obama for this mess? He hasn't even been in office for two months yet, and Liddy was put there by the BUSH administration, and it was Ben Bernanke, a BUSH appointee, that said that AIG was too big to fail!!! And all you righties screaming about your grandchildren paying for this mess, what about the WAR that Bush started that they are going to have to pay for? And the largest budget deficit that Bush and the Republicans wracked up during their "leadership" that your grandchildren are going to have to pay for? It was the republicans de-regulating everything left and right that allowed these kinds of excesses to continue un-checked.

I guess Dodd has nothing to do with this. It was Dodd, A DEMOCRAT, that pushed for the measure in the Stimulous bill that allowed the bonus money to be paid. STOP BLAMING BUSH FOR A BILL THAT NO ONE READ, INCLUDING THIS JACKASS WE HAVE IN THE OFFICE NOW.

koodos to you lh8libs. I could not have said it better myself.

lefty - you sure have your facts.............screwed up.

Blame Obama? Well he voted for the like when he was (briefly) in Congress.

He and his Treasury Secretary and allowed it on their watch.

Bush's deficit? The one created over 6 years of Repub Congress and 2 years of Dem Congress? You mean the one that Obama is on his way to tripling within a few months? That one?

Deregulation? You mean where Chris Dodd, Charley Rangel, Barney Frank, and the like stay in bed with these clowns from AIG, Fannie Mae, Freddie Mac, Countrywide, etc, ad nauseum? That deregulation?

Those are the facts.

Leftykitty, take off your rose colored glasses.

I have McCain listed in the top 4 to receive contributions. I also clearly state that both sides of the aisle let down everyone in this country.

As for what is happening with bonuses, it was Dodd that had his name on the bill for bonuses to be paid if contracts were in place before Feb 2009. Well, DUH, what did you think would happen, AIG gets their bonuses. Who was the top receiver in AIG contributions...... DODD! Who was second, O'Bama! The writer of the bill and the signer of the package that nobody had time to read.

You can not keep going back and blaming Bush. Bush was not the conservative many believed he should have been but he's not the watchdog now. He's not signing, O'bama is. This was signed on his watch. O'bama, along with the likes of Pelosi, Reid, and the biggest of them all, Franks have waited 2 years to enact every spending increase and tax increase you are seeing or going to see in the very near future.

Ask yourself, who is in control of Congress NOW. Your answer will tell you why there have been no calls for a BIG investigation into this whole matter. The Dems, especially those I've named already will be out of a job if the truth came out.

This all goes to what we the people have ignored for decades: the relaxation of anti-trust laws and enforcement in our country. Govt. agencies responsible for approving mergers and buyouts have allowed monopolies to thrive, giving us all fewer options on fewer quality products and services. AIG is a prime example of what happens when we allow one outfit to gather all our eggs in one basket. As are Comcast, AT&T, pharmaceuticals, power and gas conglomerates, etc. If AIG's assets had been properly spread out over many companies rather than one, competition would have compromised extensive extravagant bonuses, though honesty within each enterprise is a company management issue and stock holder responsibility.

This excuse that retention bonuses are necessary to attract and keep good help is a crock that I constantly see proffered on annual company meeting ballots. And stockholders continue to fall for it; had the bonuses been in the form of stock options only, there would be some justice - the bums at AIG would have suffered along with the stockholders (and taxpayers) like me and the brokerage houses they suckered.

To blame the Obama administration for this fiasco is nuts. The bailout came down under George's watch and a congress where republicans had more power than they do now - both parties hold responsibility for not amending the first bailouts with strict conditions. It was common sense to the rest of us, but the rush to get funds into the crumbling mortgage industry left room for politicians to make hasty, ill-conceived legislation.

Leftykitten-

kudos. Ever wonder why republican commentary in these forums is so venomous?

Did I say Dodd had nothing to do with it? I re-read my post and I couldn't find it in there. Don't infer what was not implied.

I am a democrat (obviously), and I didn't want the stimulus bill to go through either. Why should they privatize the gains, but socialize the losses? I don't get to pass on my overdrafts fees to my neighbors. And I never believed any of that garbage that AIG, Freedy Mac, or Fannie May were "too big to fail." If we want a free market so bad, then we have to live with the fallout that its abuses might produce. I was dissappointed that the Democrats voted for the stimulus package. But I don't remember reading single story about a republican who wanted more oversight. Instead, all the republicans did was hem and haw over the "earmarks" and government spending.

But, if you care at all about what really happened, it was the Federal Reserve Board who first decided to bail out AIG back on September 16, 2008. This first $85 billion was given to them way before the stimulus package you are complaining about with its lack of oversight ever had its finishing touches. This was several weeks before the man you call a jackass was elected.

In case your interested, this is a about who is trying to accomplish what before this stimulus bill was passed. Granted, the article is short and sweet without much detail, but in it, you will read about how democratic leaders were trying to insert more oversight into the bill. Also in there is John Boehner calling the bill a boondoggle (thanks for your input John, that really helps make sure AIG execs don't abuse the system).

Also, if you are interested, you can go to which is the US government's website that tracks TARP money. I don't remember seeing that much transparency with the Bush administration, so there is some change you can believe in.

is a link to an article dated Feb 4, 2009, listing what republicans deemed as wasteful in the stimulus bill. Note that AIG bailouts, executive bonuses, and lack of oversight are not on the list.

"To blame the Obama administration for this fiasco is nuts. The bailout came down under George's watch and a congress where republicans had more power than they do now - both parties hold responsibility for not amending the first bailouts with strict conditions. It was common sense to the rest of us, but the rush to get funds into the crumbling mortgage industry left room for politicians to make hasty, ill-conceived legislation."

1/2 Canadain,

If you feel that the Repubs caused all this when they were in power then why aren't the Dems calling for an investigation? They have the power now and have in Congress for the last 2 years. The Dems know who will be at the top of the list for letting this happen and Barney Frank will be at the very top of the list right next to Dodd and Reid. I do agree that both parties are responsibile because the Repubs did not stand up and put a stop to this either tho they would have been hard pressed to get any media to listen to them.

O.k. all politicians are criminals, dammitcrats are like pickpockets who pass the take off and scream discrimination when accused. o.k. got that part, reactalotpublicans are like what?

thugs in the alley that beat you over the head and take everything you have because you weren't born with enough money to afford a limo and bodyguard?

I'm sorry, but a performance bonus is based on just that. Contractually, if you didn't perform, and these people - top to bottom - did not, then there should be a contractual "out" of having to pay. Yes, this is just the top of this "crap pie" we've all had to swallow, and much more needs to be done.

I think you are missing the fact that we (US Taxpayers) own 80% of AIG. Does this not make us the owners? If yes then we should be able to dictate the terms of compensation for PERFORMANCE and RETENTION. All bonuses should be reversed if necessary in court.

Why was Congress not listed as a choice. Not the Administartion, just Congress.

Washington (CNN) – Democratic leaders scrambling to strip AIG executives of bonuses are having a hard time answering a key question - why didn't Congress act to prevent the bonuses in the first place?

"There's always more we can do, and hindsight is 20/20," was all Senate Majority Leader Harry Reid would say Tuesday.

But the reality is that when lawmakers did move to prevent bonuses in the stimulus bill last month, they actually made an exception for pre-existing contracts, effectively exempting AIG.

Senate Banking Committee Chairman Chris Dodd, D-Connecticut, who originally proposed the executive compensation provision, did not include the exemption clause, which said new rules "shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before Feb. 11, 2009."

In an interview with CNN, Dodd denied inserting that exemption at the 11th hour, and insisted he doesn't know how it got there.

AMEN!! On Feb 11, Chris Dodd APPROVED these very bonuses. Where is he now? These are contractual payments agreed to a year ago. Many (if not all) of these people agreed to a lower salary with the promise that they would be rewarded with a bonus for staying the entire year. If this contract is honored, only to have the government take it back with a "special tax", we are one goose step closer to communism.

Oh you mean when obama was a senator

they are all in this together, dont get hung up with titles of dems or reps. They sleep together and cobntinue to screw the people because they could care less about you and me. DEMAND TERM LIMITS NOW!!!!!!!!!!!!

That is incorrect, the money for these bonuses just went through a matter of weeks ago on Obama's watch. This was not from the initial bailout but from further funds that Geithner approved and pushed Dodd to leave available. Ultimately this comes back to Geithner, but that leaves the whole thing at Obama's feet since he placed the crook at Treasury to start with. You can't put the fox in charge of the henhouse and then wash your hands of the results...even though Obama will try his best.

AMEN to that!!!

Thank you Val. All of the AIG failing business started when Bush was in the White Hosue. Obama has only been in office 2 months.

From the AIG regulating stooges: "One way or another, we're going to try to figure out how to get these resources back." --Sen. Chris Dodd (D-CT), who only a month ago made sure that these particular bonuses were exempt from regulation in the stimulus bill; Dodd is also the recipient of the most campaign cash from AIG ($103,000 in 2008) ++ "If you don't return it on your own, we will do it for you." --Sen. Chuck Schumer (D-NY) on Congress' possible plan to take back AIG bonuses with a tax ++ "Maybe it's time to fire some people." --Rep. Barney Frank (D-MA) on AIG, though we could have sworn he was talking about Congress

The obama democrats

Sean -

No. See tvan post - it is correct.

Here. Here. Obama readily admits when he needs to make an improvement and does just that. I think that some Republicans saw that and are uniting to right this wrong. I concur with some of the repubs on this site that repubs and dems were to blame with Bush's stimulus and also some dems. Nobody is perfect and at least the voice of the people was heard and this wrong is being righted quickly. I like how most of the senators used their powers to subpoena the names, let them know that the money would be returned, either by a reduction in future payments and possibly letting them go under. Liddy is not stupid. He knows that and tried to get them to cough up half. It is as Cuomo said, too little, too late. At this point, they need to give the money back and if people walk, let them walk. As the senators, repub and dems said, they are not the only ones that can do this work. Let another company take over insurance and pension and declare this company dead on Liddy's watch for a legacy if any more slipups without quick and sincere cleanup. If Repubs and dems work together like this, and stop trying to show each other up at the wrong time then it will be better for the country in the long run. It's like our country is a lifeboat full of holes and dems and repubs are in charge of scooping out the water in the boat but they would prefer to argue about the scooping technique or oneup each other far too much. Ultimately, the ship will go under if they don't put aside the differences for a few years until the boat is patched up at least. Respect the captain. If the shoe were on the other foot, would Obama help McCain. I think he has proven that he would by offering an olive branch to republicans in his cabinet and even putting his previous opponents in positions. He is not responsible is they don't want to accept. All he can do is offer. We all know that, he has tried. You can't hold him accountable for them not accepting or constantly diving on every possible thing that they can insult. We have to rise above that or our ship will sink. the time to bring that crap out is in 4 years. at least give him a chance. Bush (and crew, not just bush) had 8 years of reckless "decisions". Give this admistration achance. I bet the stocks go up as a result of our reps, dems and repubs showing their moxy and not putting up with the B.S. there will be a lot fo time with all the issues facing the U.S. for them to put aside their differences for the good of the country. Then in an election year, the american people can decide if we think things are better. Helping out for regular people who have paid taxes for 20 years would free up money for them to buy things which in turn stimulate the economy. Give them 50% of their gross salary from the previous year! Bail out main street. Dont let them go under, like we want to save the banks. If people have lost good jobs, laid off, the government could help by giving them 80% of their salary as they train for a new career, or/and look for a new job comparable to 80% of their salary. This benefit is cut if they don't accept the new job offered or if they will not go to school to get retrained. it's not welfare if they paid into the system all this time. If it's too much of a strain for some to do the bonus for regular people, make the mortgage companies drop the rate to 3% across the board. People WILL buy houses or refinace. They will only buy the houses from the people who did not sell too high and they would refinance or close with the people who had the cheapest closet costs. That would allow people to have more money with a smaller payment. if they can try to save AIG and get pi%sed off enough for them to make the money, go ahead and make the mortgage companies do that for ONE year and see how fast we get out of this mess.

Here is WHY

From the AIG regulating stooges: "One way or another, we're going to try to figure out how to get these resources back." --Sen. Chris Dodd (D-CT), who only a month ago made sure that these particular bonuses were exempt from regulation in the stimulus bill; Dodd is also the recipient of the most campaign cash from AIG ($103,000 in 2008) ++ "If you don't return it on your own, we will do it for you." --Sen. Chuck Schumer (D-NY) on Congress' possible plan to take back AIG bonuses with a tax ++ "Maybe it's time to fire some people." --Rep. Barney Frank (D-MA) on AIG, though we could have sworn he was talking about Congress

AIG is 100% responsible. This is a no-brainer. Yes, we need their staff to untangle this mess, but they are the ones who created it. Insisting on bonuses to repair the damage they did was blackmail, pure and simple, and created every single one of the issues that followed. Honestly, it is hard to understand where this sense of entitlement comes from.

Here is the answer to your question:

Congress set up TARP last fall so that they and the Federal Reserve could respond quickly to the growing crisis. AIG is actually quite sound, but needed bailout money several times because of their financial investment insurance division. Here is why:

AIG's other insurance divisions are regulated. They can't insure things and not be able to cover claims that might happen. That is why they work.

But AIG set up a division to insure these financial instruments that investors were buying in the stock market. The insurance is called Credit Default Swaps (CDS). The financial instruments they insured are packages of loans called Collateralized Debt Obligations (CDOs). This seemed like a great idea, because people who would have hesitated about the risk involved in buying the CDOs just bought insurance to cover themselves if things went south and there was a brisk market in all of this.

This new division was not regulated. About ten years ago, a woman named Brooksley Born who was a member of the Federal Reserve board saw this as a serious problem and tried very hard to get them regulated. But the other members of the board did not let her do that and she ended up quitting. This is not an issue of good guys and bad guys. The board members were all trying to act responsibly.

The AIG execs started to insure many, many more financial instruments than they could cover so they could collect the premiums. Their potential obligation is something along the lines of $62 trillion.

Why is this our problem? Well, first, many private mortgage companies, like Countrywide, started making illegal mortgages to people who would not be able to repay them. You might hear some blame an act of Congress called the Community Reinvestment Act for this problem, but there is no evidence to support that. It was all just a lot of plain greed on the part of mortgage lenders, and mostly just culpability on the part of borrowers. The lenders practices were predatory and dishonest, as well as illegal.

They sold these bad mortgages to financial investment firms who bundled them up into these CDOs with a lot of perfectly reliable debt and sold the packages around the world.

When the subprime mortgage defaults started (when the first ARM adjustment kicked in) the default rate on mortgages climbed slightly. This caused the value of the CDOs to drop and AIG had to cover the losses. They struggled to do that. More subprimes defaulted and soon it became evident there was a problem there, although our actual default rate was never higher than 5% at that time.

They acted like little time bombs or viruses in the CDOs. No one could say how much bad debt was out there, or how much they held. The value of CDOs started to drop quickly. The drop pulled the entire market down, starting on September 18th, and it became clear that AIG could not cover their obligations as insurers.

Back to the $62 trillion. Governments and economies all over the globe bought these things. Why? Because they believe in the value of the American dollar. But the American dollar is not backed by gold. All of the gold in our treasury is encumbered. It is backed by faith and faith alone. The faith is based on the transparency and trustworthiness of our financial system.

If we are not transparent and trustworthy, the value of our dollar will plummet. We will default on our debt to other countries, because we will need many, many more dollars to cover our payments (currency exchange rate will be unfavorable). If we default, hyperinflation and also global depression will happen, because so many economies are invested in our market and they will crash, too.

AIG needs to untangle this mess, and separate out the bad and the good debt. That is why we need these people, still. But this bonus thing is essentially financial blackmail, and I think that some members of Congress knew that legally,m they could pull the bonuses but practically, if they did these people with the knowledge we need were going to walk out. They should be held responsible for their actions and for dealing with this, but we can't MAKE them do that. And $168 million in bonuses is the lesser of two evils, the second being global depression. It is better to pay the money and recover. Remember, our default rate is still below 10% and our employment is still higher than 90%.

It is not news that these bonuses were coming. The media picked up on it, though, and pushed it into the headlines. This seemed odd to me, because they seemed to wait until after the process had moved forward and it would be much harder to rectify. The first headlines I saw tried to tie this to President Obama, but in my opinion that is very misleading. This is the TARP money, the legislation was proposed by Bush and Paulson and negotiated with Congress before President Obama took office. He had a say about it, but not the level of control and supervision as the people who were actually responsible had.His accountability lies in the legislation he proposes. He has exercised options around TARP, for example, helping mortgage holders directly instead of AIG, especially the mortgage holders who hold AAA loans and are being unfairly dragged down by the crisis.

Justathought --

Your "thoughts" seem very informed. What is the solution?

TERM LIMITS, you do one term and a new person gets elected. This way ther is no time for them to fatten their wallets. DEMAND TERM LIMITS now

comments calling for limited terms I whole heartedly agree with! On top of that our so called senator's should not get free anything (health coverage) for life!! C'mon, no other job in this country offer's perks like that unless you put in 20yrs plus and even then it's not a quarantee!? One term and they and their families are set for life and next to impossible to get out of office even when on their death beds..... what about the men and women serving in some of the most dangerous jobs in this country?? Firefighters, EMT's, Police and our Military put them selves in harms way to protect our way of life. Fighting for the rights of ignorant people to be able to speak freely, vote and reproduce all the while complaining that their life sucks. You want to complain about the War you were all misled into believing had a legitamit reason?? Fine, that's your right as a U.S Citizen and indeed you have been misled...by a wicked and biased media!! I've never seen such a one sided one minded media mass and it makes me just thankful that that type of media wasn't available during WWII. Today's media would have emboldened Hitler and divided this Country to the point of implosion and who know's what the outcome would have been. So, it's the Media's Fault...and our's for swallowing the B.S being spoon fed to us!

Good for you!

sorry to hear about that. Helping out for regular people who have paid taxes for 20 years would free up money for them to buy things which in turn stimulate the economy. Give them 50% of their gross salary from the previous year! Bail out main street. Dont let them go under, like we want to save the banks. If people have lost good jobs, laid off, the government could help by giving them 80% of their salary as they train for a new career, or/and look for a new job comparable to 80% of their salary. This benefit is cut if they don't accept the new job offered or if they will not go to school to get retrained. it's not welfare if they paid into the system all this time. If it's too much of a strain for some to do the bonus for regular people, make the mortgage companies drop the rate to 3% across the board. People WILL buy houses or refinace. They will only buy the houses from the people who did not sell too high and they would refinance or close with the people who had the cheapest closet costs. That would allow people to have more money with a smaller payment. if they can try to save AIG and get pi%sed off enough for them to make the money, go ahead and make the mortgage companies do that for ONE year and see how fast we get out of this mess.

Incorrect!!! This was approved by Geithner and Obama, it did NOT happen under the Bush administration. The uninformed head-burying of the Obama faithful truly is staggering at times.

Sorry tvan, but these contracts date back to last year and so does the bailout money given to AIG. Most amazing is that 11 people who left the company still got bonuses. I guess "retention" bonuses mean nothing to these bozos. Those who got the bonuses and really want their company to succeed, should come out of the woodwork and do the right thing by giving the bonuses back -- contract or no contract.

Congress should get a lot of the blame for this for lack of oversight. Those receiving bailout money should be able to account for every dollar received. If they say they are using some of it to buy office supplies, they should be able to account for how many filing cabinets. How much money went to paying bills, how much for meeting, consultants, etc. Seems as though the bailout amount was just picked out of the air.

Disgusting on all fronts!

yeh, I'm really tired of the pointing fingers game. It's ridicules for the so-called leaders of this country to always be whining "It's not my fault, we inherited this". We are not impressed by your ability to tattle tale. Obama was a senator for the last 4 years. While, it may not be his fault, he isn't exactly a by-stander. Congress needs to grow a pair and start walkin' the walk... cause I'm tired of the talk.

I just saw this on theartofposible blog...

"Overall, bailout supporters received an average of 54 percent more in campaign contributions from banks and securities than bailout opponents over the last five years. The disparity also held true if you look at individual parties. In fact, the 140 Democrats who voted for the bailout received almost twice as much money from banks and securities as the 95 Democrats who voted against it. (The difference was closer to 50 percent for Republicans."

Congress can't be trusted. Taxpayer dollars being used to pay off old campaign debts and buy votes! I just pray that they stay away from our health care!