President Obama has taken a very strong stance against the abusive nature of the AIG Executives and their willingness to take advantage of the US Taxpayers.
The buck stops with me, Mr. Obama said. And my goal is to make sure that we never put ourselves in this kind of position again.
You can definitely see that anyone that is following the AIG story is very impressed with the Presidents posture on the events and it will be interesting how the events to come unfold.
This money doesnt belong to A.I.G., said Representative Steve Israel, Democrat of New York. It belongs to the American taxpayer and we are going to get it back.
I doubt many of people would disagree with this statement. As a result of the upheaval, the congress is asking for the recipients of the most recent bonuses to pay back half, and apparently there are a number of them that are volunteering to give back 100% of their bonuses which I am really pleased to see.
That being said, the honor system will not likely work to the entire executive group, since they were the ones that put AIG in the position it is in now. Congress is taking Mr. Obamas direction to heart by heading to the House to prepare a plan to tax the people that did receive the bonuses and did not return them to the point that they may as well have given it back in the first place.
So far, the names of the AIG Executives have not been released as Mr. Liddy feels a responsibility to protect them for the moment as there have been graphic death threats to them and the last thing we need is for this to turn into a hit list. While I expressly agree that the AIG Executives should give the bonuses back, we can not go around killing them over this.
While the AIG did take advantage of the situation, there actions were not blocked by the people that put the package together in the first place. We need to formulate a plan to fix this and ensure it does not happen again.
When I look over the problems we find ourselves in currently I can not help but expect that the deal was funded in too much of a rush without the proper provisions to compensate for the rushed manner the bailout was entered into. Normally when a Corporation goes for a loan there are several underwriting criteria that must be met prior to funding. Since the US Government is now in the Commercial Loan business they need to be sure to have the appropriate structures in place when underwriting these loans to protect their and our interests. There is a high likelihood that there will be more bailouts in the future and the correct foundation needs to be set out now. We have already seen what has happened to the sub-prime mortgage business and this is very much a sub-prime loan.
