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Going to End Badly????

So this anonymous character in today's AIG story in The Post says: "It's going to blow up...I have a horrible, horrible, horrible feeling that this is going to end badly."

First, that strikes me as one too many horribles. The bad news is getting tedious. I'm tired of stories with headlines like "Bleak Economy Going Into Death Spiral." Just once I'd like to see some good economic news, even if it means putting a happy spin on things. You know: "Laid-Off Workers Discover Joys Of Daytime TV."

But back to the quote from the anonymous person: Excuse me, I thought it had already ended badly. I thought the economy had tanked and the taxpayers had gotten stuck with a monster bill and the unemployment rate had reached levels not seen in a generation.

A couple of weeks ago I was making noises about how we've probably hit bottom, and the stock market rallied a bit -- I'm not saying that's a direct cause and effect, mind you, though the A-blog is surely a major driver of sentiment on Wall Street -- and I had been thinking that it was time to do triage and prepare for a better day. So I don't like it when these folks say the worst is yet to come. Particularly since my grasp of this issue is by the epidermis of my incisors.

The basic problem, alluded to in the Post story, is that the U.S. taxpayers now essentially own AIG, and AIG owns these toxic assets, and the crisis won't pass until we find a way to disentangle. And the people who know how to do that are the same folks currently being vilified.

This is a delicate task for Obama Administration: Managing outrage even while trying to purge the toxins. As a country our pain won't end until we pass the stone. But no one should expect the general public to be complacent about any of this. The eruption of outrage over AIG is understandable given our innate need for a satisfying narrative -- one in which bad things are caused by bad people, and the bad people get caught and punished. It offends our narrative sensibility when the problems are disproportionate to the number of villains.

By Joel Achenbach  |  March 17, 2009; 9:00 AM ET
 
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Comments

reposting...

http://dictionary.reference.com/browse/spiv

spiv
-noun British Informal. a petty criminal, esp. a black marketeer, racetrack tout [what is a tout?], or petty thief.

Origin:
1885–90; back formation from dial. spiving smart; perhaps akin to spiffy

Headline from the Daily Express:
LONDON 'SPIVS' BLAMED FOR GLOBAL MELTDOWN

http://www.express.co.uk/posts/view/89100/London-spivs-blamed-for-global-meltdown

An investigation carried out in the US has identified a team of London-based spivs, numbering just a few dozen who are largely responsible for the catastrophic losses.

Their Mayfair office has now been dubbed the “ground zero” of the ­economic crash.

The Serious Fraud Office [Is there a Light Fraud Office or Moderate Fraud Office?] has launched an investigation into the London losses [What about the American losses?]. A spokesman said: “Our investigation is ongoing.” [Aren't they all?]

Posted by: laloomis | March 17, 2009 11:15 AM | Report abuse

Yeah, it's all about narrative, isn't it? It's the same thirst for symmetry that fuels conspiracy theories. We assume great evil must be caused by great evil. (Please reference Mr. Weingarten's recent article for a salient counter example.)

But with AIG I also think there is an intense resentment over the notion that any human being is worthy of being paid that much money. I understand that whole "supply and demand" thing, but does market competition really apply here? Do the people who feel entitled to such huge salaries and bonuses really stand head and shoulders above the crowd?

I don't think so.

I don't think variation in human capability is large enough to justify such discrepancies in compensation. I think wages and bonuses have been driven up by implicit collusion.

I think the advocates of Free Market Forces have managed to shied themselves from those very forces.

Posted by: RD_Padouk | March 17, 2009 11:25 AM | Report abuse

RD has something there. Joel is right, we do want bad people who do bad things to be punished. The perception that they're not being punished leads to dangerous circumstances. However, these are also fed by a strong sentiment that none of those people, bad or good, should be paid millions of dollars in bonuses. This is particularly true of the people who did bad things.

I'm not speaking here of the paltry thousands which were spread among relatively unimportant actors within AIG. We're all talking about the individuals who receive a million or more, or close to it, apiece for, as far as we can tell, running the business and the global economy into the ground.

Again, there is a difference in how the term "bonus" is used. Corporations like AIG tend to use "bonus" to define what the rest of us would think of as compensation - that is, something agreed upon as part of base pay. Regular humans think of "bonus" as something extra, usually awarded for good performance if there are any profits at the end of the fiscal term. The AIG payments are simply not a "bonus" in this sense - they are neither paid out of profits nor given to those who did a good job. This exacerbates the outrage at such large payments being given at all.

Remember that old "slient majority"? Well, the silent majority is speaking now, and it isn't in support of big business and disproportionate compensation.

Posted by: Ivansmom | March 17, 2009 11:32 AM | Report abuse

Not to put lipstick on a pig (is that expression still allowed?) but sometimes periods of economic downturn can spur great intellectual innovation. It wouldn't surprise me if some of those unemployed individuals are, even now, contemplating the Next Big Thing.

(Which I hope does not involve pitchforks.)

Posted by: RD_Padouk | March 17, 2009 11:33 AM | Report abuse

As far as the "horrible, horrible, horrible" comment, check with QVC host Lisa Robertson, who tells viewers that (too) many pieces of jewelry are "amazing, amazing, amazing!" Note to Lisa, consider a Roget's Thesaurus. Seems to be a sign of the times to repeat the adjective ad nauseum.

David Brooks was rather upbeat today at the NYT.

In the cycle of American history of economic downsturns, I inadvertently left out the Panic of 1907 and family member James Stillman who actually loaned money to J.P. Morgan, whose activities helped to stop a run on the trusts.

http://en.wikipedia.org/wiki/Panic_of_1907
Morgan, Stillman and Baker's economic fingers also stretched overseas to Europe, as told in John Mason Hart's 2002 "Empire and Revolution: The Americans in Mexico since the Civil War."

Too oft I have heard from punditry recently that Obama ought to level with the American people and give them the true cost of near-future bailouts of banks--$2 trillion.

And Joel is now comparing America's pain to the pain associated with passing a kidney stone? Numbers are disproportionate indeed--which means more than just "narrative sensibilities" being offended. That's putting it lightly.

Posted by: laloomis | March 17, 2009 11:33 AM | Report abuse

I listen to a tech podcast that has instituted a drinking game where you have to take a shot for every story that contains the phrase "in these troubled economic times." I heard it on the local news the other day and almost reflexively looked for some alcohol to imbibe.

Posted by: yellojkt | March 17, 2009 11:35 AM | Report abuse

The first rule of getting out of a hole is to stop digging. Leaving the groundhogs in place because they know all the tricks isn't going to keep them from digging even deeper.

For crying out loud, their lack of understanding of the very instruments they invented is part of what got us here. I for one am not buying it, and it's not anger that keeps me from believing they 1. have to get the bonuses, or 2. should have anything to do with untangling the mess. Working with miscreants has taught me that motivation drives actions more than knowledge. Leaving knowledgeable people in place, with motivation to cover tracks and stay in place to commit the same atrocities again, seems to me to be more dangerous than replacing them.

Posted by: frostbitten1 | March 17, 2009 11:40 AM | Report abuse

Speaking of ending badly...

http://www.boston.com/news/nation/washington/articles/2009/03/17/senator_suggests_aig_execs_should_kill_themselves/

Yeah, responsible comment, that... *rolling my eyes*

Posted by: Scottynuke | March 17, 2009 11:44 AM | Report abuse

Could someone with an historical bent (yes, I'm one of those people -- an initial 'h' should be treated as silent when choosing an article to precede it) ... where was I?

Oh, yes: could someone of an historical bent remind us of the occurrence rate of depressions in American history? These days, we tend to treat the Great Depression as being the only American depression on record. This permits know-nothings and dogmatists to make the specious claim that nothing done by government in the past 70 years has had any salutary influence on the economy and we would all be better off with less regulation. However, my vague memory is that the 19th and early 20th centuries were marked by the occurrence of depressions with rather tedious regularity. Not mere recessions, but serious depressions, complete with large numbers of workers out pounding the pavement to get back to work, starving old people, businesses failing, currency devalued, and so forth. The fact that the past 70 years has seen several recessions, but no depressions (until now, possibly), seems to speak rather well for all those silly liberal policies of financial regulation and social justice that were enacted after the GD. Perhaps a little factual reinforcement might help to quiet the libertarian dogmatists -- or, at least, get them to take their barking dogmas somewhere where they'll be more appreciated.

Posted by: ScienceTim | March 17, 2009 11:45 AM | Report abuse

laloomis, I think Joel was not comparing the pain of "these troubled economic times" to the pain of passing a kidney stone (although my understanding is that it is a heck of a lot more painful than your comment implies). I believe that his analogy (not comparison) was with reference to the experience of needing to bear the pain of extraordinary difficulty before reaching a happy conclusion.

Posted by: ScienceTim | March 17, 2009 11:51 AM | Report abuse

The Florida legislature has been considering capping employee pay at $100,000, likely to cause an exodus of physicians and judges.

With AIG, there's some need to accommodate the financial industry's lavish compensation practices, including bonus-as-salary. I somehow doubt that an AIG where no one gets paid over, say, $100,000, would retain critical people. But where's the correct maximum? $800,000? $8 million?

Posted by: DaveoftheCoonties | March 17, 2009 11:52 AM | Report abuse

Exactly, frosti. We're dealing with miscreants here. If left in their current positions, they have every incentive to minimize their appearance of culpability for previous bad acts. It is in their interest to prevent others from taking their place, if only to further obscure their own wrongdoing and perhaps to continue wrongdoing. This is even more true if the miscreants are left in place and given large amounts of money.

As one of the financial community defenses has been that they didn't know these complicated instruments would have this result, I too fail to see why keeping the same clueless people in place is necessary to fix the problem. Let's throw in some clueless people who aren't proven miscreants.

I also like Mudge's point regarding the possible non-miscreants who received Bad "Bonuses". So they'll leave? Assuming we care (see paragraphs above) where will they go? Good luck to them.

Posted by: Ivansmom | March 17, 2009 11:56 AM | Report abuse

The working definition of 'outrageous salary' is usually double what ever you make. Unless you are Joe The Plumber.

Posted by: yellojkt | March 17, 2009 12:02 PM | Report abuse

I should have gone to actuarial school like the older brother of one of my high school friends recommended. Unlike the bar exam, the test is hard enough to keep out the riff-raff. ;-b

Posted by: yellojkt | March 17, 2009 12:06 PM | Report abuse

You know Teach For America will get many, many, many more applications than it has spots to fill this year. Why not Bank for America, or Financial Regulate for America?

Posted by: frostbitten1 | March 17, 2009 12:08 PM | Report abuse

I was checking out the odds to win the ncaa tournament in yesterdays USA today

UNC 4:1
Louisville 6:1
Pitt and Uconn 7:1
WV 60:1
Maryland 225:1
now it gets interesting
cornell 1 million:1
American 10 million:1
Morgan state 1 Billion:1
alabama state or morehead state(playin game) 1 trillion:1
east tennesee state 1 septillion:1
Radford 1 googol:1
Chattanooga 1 googolplex:1

I had to look up septillion and googol and googolplex up,almost worth it to drop 1 bit on one of those teams.

Let's just hope the national debt never reaches 1 septillion!!!

Posted by: greenwithenvy | March 17, 2009 12:15 PM | Report abuse

Hellebore! Give 'em all a dose of hellebore if its purgatives ye want, Joel! A nice, big bolus of hellebore and a Blue Pill. That'll clense 'em out right quick.

Tim, if you're looking for someone with a (ahem) historical bent, my sense of history is pretty much as bent as you're likely to find. In fact, I've been known to bend that bad boy ever' which way.

Be that as it may, I actually happen to know a good deal about the crashes/depressions of 1893 and 1907, since both had a lot to do with the Elco company, about which I write from time to time. The thing about the crashes, buibbles and depressions of the 19th and early 20th centuries is that there were no government agencies and mechanisms in place back then, much less a culture of expectation that somebody would come along and "fix" things. Basically back then, when "s" happened, it plain just went ahead and happened. And yes, J. P. Morgan not once but twice unilaterally saved the ciountry with his own two hands (metaphor). So it was basically Morgan or nobody.

The point is, those Lone Ranger conditions no longer apply today. So study the Crash of 1893 (beginning with the Reading Railroad collapse) as we might, there are no great lessons to be learned from it.

Posted by: curmudgeon-1 | March 17, 2009 12:20 PM | Report abuse

A little tune for the day:

http://www.youtube.com/watch?v=EADUQWKoVek

hat tip to The Fix for not making me find it again my own self

Posted by: frostbitten1 | March 17, 2009 12:27 PM | Report abuse

"The eruption of outrage over AIG is understandable given our innate need for a satisfying narrative -- one in which bad things are caused by bad people, and the bad people get caught and punished."

Less charitable people might say the outrage is interesting given the hypocrisy on display here. One might be able to fill a very small room in a recently-foreclosed house with all the Americans who have ever said, "No, really, you're paying me too much. Howsabout we give raises to some of the minimum-wagers in the organization instead?"

A big part of The American Dream is the idea that anyone can get successful or powerful or rich if only they are willing to work hard. There wasn't much of a fuss being made about corporate bonuses and employee appreciation events at expensive resorts when the Dow was at 14000. Certainly nobody in government was threatening to take back executive's bonuses.

Nearly everyone, it seems, wants more, more, more, and the system is geared to do that. When things go south - in part as a result of that very system - all of a sudden we're looking for someone else to blame.

Pogo knew who point the finger at.


(In an unrelated note, I just got the new Apple Wireless Keyboard, and it is sweeeeet.)

Posted by: byoolin1 | March 17, 2009 12:37 PM | Report abuse

I'm not sure either about letting those nice folks of the AIG Financial Wizardry & Legerdemain department in place. The clerk who is cooking the book is the first one in, the last one out and doesn't take vacation. He/she can't afford to have someone else looking at the books.

Posted by: shrieking_denizen | March 17, 2009 12:39 PM | Report abuse

Achenbaugh has it right. We want a narrative that exhibits fair play. Americans generally are accepting if the situation exhibits what is fair. It is a national value.
And there is nothing fair about the AIG use of bailout money for bonuses.
The level of incompetence by AIG that got the company into its financial crisis is exceeded only by its inability to be intelligent trustees of the money our government turned over to it. AIG's complete lack of simple good sense has jeopardized free enterprise to a greater extent than any liberal politician or social ideologue could possibly do. What possible rationale might the company offer for its blatant stupidity in using bailout money for personnel bonuses? If the "bonuses" were not really bonuses, then call them something else. How about "contractual compensation"?
But please, do not foist on the American people the idea that incompetence must legally be awarded to those responsible for the loss of retirement nest eggs, homes, and jobs as well as an increase in the national debt.
The use of the bailout money by AIG boarders on the pathologically arrogant.
After eight years of general public complacency over our country's participation in torture, incompetence with Katrina victims, and an economic policies that favored the rich, it is refreshing to see public outrage.
What is fair?
Not this!

Posted by: sarawaters | March 17, 2009 12:48 PM | Report abuse

Hmm. Apple's current wireless keyboard looks like the one they've been selling for at least a year. Actually fits on my cluttered desk.

The Financial Times has a full-page report "When papers fold". Looks as though non-profit ownership doesn't help--the Christian Science Monitor (online only) and the St. Petersburg Times are both having difficulties.

Posted by: DaveoftheCoonties | March 17, 2009 12:55 PM | Report abuse

DotC, I was hoping nobody would notice my poor sentence construction. The aforementioned AWK is new only to me.

Posted by: byoolin1 | March 17, 2009 1:05 PM | Report abuse

Sara Jane Olson, former SLA fugitive, is returning to MN after being paroled in CA. She'll be serving her supervised parole in St. Paul. T-Paw did the politically expedient thing, asking CA to keep her knowing that wouldn't happen.

In light of my previous comments this morning, and for the HLS types who monitor these social networking venues, I don't know Sara and I won't be asking her for any tips.

Posted by: frostbitten1 | March 17, 2009 1:06 PM | Report abuse

What byoolin said about scapegoating (in so many words)...

Posted by: Scottynuke | March 17, 2009 1:14 PM | Report abuse

"Particularly since my grasp of this issue is by the epidermis of my incisors."

So Joel's grasp is:
-excellent, because he has sunk his teeth into the matter, or
-nonexistent like the epidermis of an incisor, or
-strong like enamel but susceptible to decay, or
-decorative like cloisonné or Paris Hilton's shell, or...

I'm so confused.

Posted by: DNA_Girl | March 17, 2009 1:51 PM | Report abuse

However hard the details might be, the rational amonst us would say this:

Ok, we accept some of this greenopolooza of compensation qua bonus vehicle;

Ok, some really unctuous (read loathsome slimeball) people will be paid;

BUT, the level and volume, indeed the very self-serving justification scheme stinks to high heaven and the smoldering pile will burn like a tire-fire in a rubber salvage yard.

Is there not a way to say to these people:

The JIG IS UP.
Now, get busy, because we will enter on your permanent record how hard you worked to untangle these knots. Jail time or life-time bans on your financial bone fides may just ensue.

----
Can we make them wear scarlet letters of some sort or fio-hazard tattoos?

Posted by: CollegequaParkian | March 17, 2009 1:55 PM | Report abuse

And, as an AIG investor, I must say, "THIS DID END BADLY...for me. Right now. NADA, when I shoulda hadda little sump em for a rainy day."

I am lucky, though: young enough to keep working for say 30 or more years. And, two of three kidlings are educated.

But, still. Your bonus is a kick by a velvet jack-boot to me, on the chin.

Posted by: CollegequaParkian | March 17, 2009 2:00 PM | Report abuse

Seems to me there are basically three different miscreant types we're dealing with here. The first is the Bernie Madoff type, who is simply an out-and-out crook. Period. End of sentence, end of paragraph.
What he did exists entirely outside the rest of the economic crises, and since he'd been doing it for 10 years or more his crime basically had nothing to do with it (other than it helped expose him). So the "timing" of his crime is sorta coincidental and sorta not coincidental.

The second kind of miscreants were some of the bankers and mortgage people who knowing created situations that were high-risk and not technically illegal were at least stupid and unethical beyond what a reasonable person would agree to. For instance anyone and everyone who sold a house using "liar loans" and and no-credit loans loans, etc., simply in order to earn the commissions for themselves and/or their companies. Aligned qwith them are the people who packaged up these trash loans and then turned around and sold the packages to someone else. In my view the companies that bought these packages were idiots, but the people who sold them were crooks, because they knew they were selling trash. I'm not convinced the buyers understood that (if they understood, why did they buy trash?).

In this case, it isn't just "hindsight" that tells us these trash loans were no good; we didn't have to learn that after the fact. These kinds of loans and deals were, prima facie, acts that were both stupid and willful, and should have never happened. So it wasn't just that they got "caught," or the market turned sour on them. They were still improper even had the housing market bubbled right along.

The third category of miscreant are the difficult ones: the people at the top who either weren't paying attention, or deluding themselves, or holding faulty ideas (the bubble will never burst, being the main one). I don't know that they did anything "criminal," per se, but they did something we call "negligent." In most companies, it really doesn't matter if you did something willfully stupid, or just negligently stupid; you get canned in either case.

Posted by: curmudgeon-1 | March 17, 2009 2:04 PM | Report abuse

Is there any way to get the money back from those folks that received such bonuses? And I mean legally, not sending him some folks that break knees or hurt other sensitive parts? Of course, I get the feeling here that some folks wouldn't mind the other way.

Posted by: cmyth4u | March 17, 2009 2:13 PM | Report abuse

I remember when derivatives hit the big time in the financial community, and it's hard to imagine that people *knew* what havoc they would wreak. (And if someone did know, I believe it's possible s/he was greedy/sociopathic enough to let it ride.)

On the other hand, I believe there were many, many ethical issues brushed aside by the greedy, bit by bit until they transmogrified into the Bermuda Triangle. I'm sure more than one person's annual self-evaluation in anticipation of company review claimed s/he originated the possibility for exponential profit growth by including iffy mortgages in safe-rated securities, etc. There's a trail of e-mail and prospectuses that might well be almost impossible to track through the backups, but it's there.

I know not everyone thinks like me, but I can't imagine giving these people more money. I know they think they earned it (as did . . . Octomom), but in the financial services company where I work, we do mandatory ethics training several times a year. No excuses. There are hotlines and ethics officers' numbers and e-mail addresses where one can anonymously leave tips about violations. It's difficult to believe even larger institutions didn't have these requirements mandated by the SEC and their auditors. (Won't be surprised to see an auditing firm or two get hit hard by this soon).

sarawaters. Big Fan! I love how you called the police and *then* shot your husband in "Sleeping with the Enemy."

Yoki, take care. You are irreplaceable.

Posted by: -dbG- | March 17, 2009 2:15 PM | Report abuse

Maybe they should just write it all off, like this gentleman suggested
http://www.youtube.com/watch?v=rCZRqH7sRyA

Posted by: Jumper1 | March 17, 2009 2:16 PM | Report abuse

Mudge just said so much of this better than I.

Except, of course, he missed the Julia Roberts reference.

Posted by: -dbG- | March 17, 2009 2:18 PM | Report abuse

Mudge-that third category is why I liked Gretchen Morgenson's turn of phrase on Fresh Air yesterday. There is no such thing as a "perpetually appreciating asset."

The paper used to obscure it may be complicated, but the underlying fact is quite simple. For people whose job it was to manage an insurance company to lose sight of that is negligence-whether willful or stupid matters not, it was wrong.

Posted by: frostbitten1 | March 17, 2009 2:24 PM | Report abuse

I'm not talking about Madoff and similar guys at all. That's just crime.

I'm not even really talking about the "mortgage mess" guys who wrote the dubious mortgages, and the people who took them who should have known better.

At the AIG level, and the "finance" level, I'm really talking about the people who came up with the idea to slice & dice the dubious mortgages into ever smaller packages, then bundle those and sell them to third parties, and (in AIG's case) who insured the financial institutions who took these risks - essentially buying and selling an instrument based on nothing at worst. I'm also talking about the people who created similar "instruments" to conduct financial transactions where nobody actually knew at bottom what was being bought and sold, or how much any given instrument was worth. Even they, some of them, admit they didn't really understand what they were doing. Them be miscreants in my book, lawbreakers or no.

Posted by: Ivansmom | March 17, 2009 2:29 PM | Report abuse

Looking for scapegoats shouldn't stop if they have moved all their money offshore and are gloating about what they did.

You know what's weird, though, is people who keep saying we need to kill the ones who planned 9-11. We know the pilots did most of the "planning." Flying lessons, etc. And they are dead. And I'm not opposed to going after the ones who put people in contact with other people, and wrote checks, etc. That's murder conspiracy as well. In fact I'm extremely determined to get all those (explicative)s. My point is about needing scapegoats so badly that reality is twisted a certain amount.

I'm not so sure I buy the argument that the AIG people are the only ones who understand their deals. I'm pretty confident that 20-30 math and economics professors could figure it out as fast as almost anyone else, whether at AIG or elsewhere.

I still wait for indictments. I still wait for trading reregulation legislation.

Posted by: Jumper1 | March 17, 2009 2:29 PM | Report abuse

"...not sending in some folks that ....

sorry about that.

I've always thought the stock market was like a crap shoot or gambling, and this set of events hasn't changed my thoughts one bit. It just that one gets dressed up to play the stock market game, and with gambling, it's come as you are. Of course, at some of the gambling tables, one may get shot if caught cheating, and there is a serious risk of losing life and limb. And for gambling debts, there's always folks on the payroll that are versed in creating pain in new and innovative ways.

Posted by: cmyth4u | March 17, 2009 2:30 PM | Report abuse

Here's the other thing that bothers me. All along, there in fact *were* a small handful of people who were sounding alarms and issuing dire predictions, often either loudly, or at least as loudly as they were able (metaphorically speaking). And by and large no one listened to them.

We have a variety of fables and folk wisdom (or perhaps, folk foolishness) about this behavior.

First we have the Kitty Genovese murder in New York, where many of her neighbors heard it going on, but no one did anything about it.

We have the Little Boy Who Cried Wolf, and when a real wolf came along no one believed him.

And we have Chicken Little, who said the sky was falling.

Here's the problem: on any given day there is always SOMEONE, some lone person, who is standing out on the streetcorner trying to get our attention to warn us about some impending crisis or other: the End Is Near, Repent Now. Pick any hundred topics, and you can find 100 lone semi-crazed person who is out there issuing warnings about it. And 99 percent of them are nuts.

So how do you know who to listen to? And even if you listen, what can you do about it?

EVERYBODY knew there was a housing bubble. Jeez, even I knew it, and everyone knows I don't know bull diddly about economics.

Everybody also knew that all bubbles eventually pop. There were people out there TELLING us this housing bubble would pop one day.

No one listened. And no one in authority (and I mean more Wall Street than Washington, but yes, both) did anything about it. And I'm not even sure anyone person or institution *could* have done anything about it all. At some point the rolling snowball becomes an avalanche, and then things happen that just can't stopped. But you feel like an idiot telling people not to roll snowballs down hills, even when there's some crazoid at the bottom of the hill yelling avalanche warnings.

Posted by: curmudgeon-1 | March 17, 2009 2:32 PM | Report abuse

Almost forgot...

Yoki, you had a horrible day and evening at that place. I suspect I would have been screaming and crying. I hope you're feeling better today. Take care, and get some rest.

Posted by: cmyth4u | March 17, 2009 2:36 PM | Report abuse

Here's a good question: Just what is the worst case scenario? Does every bank in the country go belly up? Do government payroll checks bounce? Do grocery stores go cash only? When do the barbarian hordes start going door to door?

And back to the kit, a lot of those names getting second-hand AIG money sound like they reside in European countries only rich people know about.

Posted by: yellojkt | March 17, 2009 2:47 PM | Report abuse

I also think we may have to clean up our language here a bit. A "scapegoat" is someone who is being blamed in place of someone who is the "true" miscreant.

I don't think any of us are looking for scapegoats; we're just looking for the damned goats.

I agree entirely about the negligence question, Frosty. That's why I said they get canned either way.

When somebody makes a major, major mistake (especially repeated mistakes over a period of time), even if the person was well-intentioned, you still have to consider whether that person shoukld be given a second chance or not (sometimes yes, sometimes no), or whether that person should be fired/removed/transferred simply because they exhibited bad judgment.

I read the Post's excellent 3-parter on how the AIG mess happened, and it seems to me AIG's president, Hank Greenburg, really didn't have a good handle on what was going on. I don't think he was criminal in any wayu, but he clearly didn't have his hand on the tiller properly. Now, the people in his Financial Services division, or whatever it called, I think pretty clearly DID know what they were doing, and deserve a different and higher level of blame and criticism (and firing).

It isn't that they were "bad people," per se, or that they simply did bad things, or that they were greedy. The thing is, you could have taken any one of them, fired them, and replaced them with some other MBA, and still gotten the same result. This is because they operated inside of a micro-culture where they were doing what they (mistakenly) thought they were supposed to be doing. And they out-smarted themselves, woth terrible consequences.

I don't know how you solve that.

Posted by: curmudgeon-1 | March 17, 2009 2:50 PM | Report abuse

Thanks Cassandra. Fortunately, I'm not much of a screamer, more a slowly bang my head against the wall sort. This may in fact be a source of stress, I should practice screaming!

My cardiologist is now on the case, and I expect better treatment will ensue -- better in terms of medical outcomes, not 'special treatment' as it were.

yello, I'm not sure that's really fair. Most of those investment banks and reinsurers are global capital, as American as they are anything else. Just because an institution was founded in London or Berlin in the second-to-last century doesn't make it "European" today, anymore than most people who's last name is Schmidt or Goldberg wouldn't be considered American unto the ninth generation.

Posted by: Yoki | March 17, 2009 2:55 PM | Report abuse

FYI, a bunch of those bonus recipients don't even work at AIG anymore.
Free range goat barbecue anyone?

Posted by: DNA_Girl | March 17, 2009 3:01 PM | Report abuse

mudge,
Part of the problem was that AIG was selling highly volatile unregulated financial products as 'insurance' when they were no such thing. Lax regulation and a lassaiz-faire philosophy let the gypsies into the palace and the quants took over the place.

There is a fine line between commodities trading and insurance and it was muddied into indistinction a long time ago. These Young Turks tried to reinvent the market only to teach all of us why we do need rules and codes of conduct and guys in green eyeshades that are at least as smart as the Gordon Geckos.

AIG was selling a snake oil that not only didn't work, it killed the patient, his doctor and the entire village. There is culpability because stupidity should not be a defense.

Posted by: yellojkt | March 17, 2009 3:04 PM | Report abuse

Some new info from Cuomo:

http://voices.washingtonpost.com/economy-watch/2009/03/1_million_bonuses_for_at_least.html?hpid=topnews

Posted by: -dbG- | March 17, 2009 3:05 PM | Report abuse

I'm with Mudge right down the line. The problem has always been that as long as the good times are rolling, everyone wants on the bandwagon. And the longer the the good times go, the more folks get on and ignore those on the streetcorners yelling about how its all going to blow up. Thank god we didn't go down the Bush road and "improve" the Social Security system by tieing retirement to the stock market. You think people are upset now? The other problem seems to be, maybe primarily in the housing market, that many folks understood that we were in a bubble, but that even if the bubble broke, the values wouldn't go down much--it would be more like a plateau until the next bubble began to rise. We've lost at least 20% on the value of our manse in the past year. Hopefully, when retirement time comes in a couple more years things will have improved somewhat. But, OUCH!!

Posted by: ebtnut | March 17, 2009 3:06 PM | Report abuse

Yoki,
It's no xenphobic slur. It's a 30 Rock inside joke about privileged elites having access to information not available to the merely middle class. Said nameless European country is where Jack Donaghy vacations and he's lace-curtain Irish.

Posted by: yellojkt | March 17, 2009 3:10 PM | Report abuse

Ah. I still claim I have a sense of humour, you know. It's my lack of exposure to the full range of pop culture that impairs me.

Posted by: Yoki | March 17, 2009 3:11 PM | Report abuse

Part of the drive to privatize Social Security was a bid to funnel more cash into the Wall Street metaphorical Ponzi machine (as opposed to Madden et al's actual Ponzi schemes) and keep it afloat a little longer. All that money chasing too few stocks would have kept the market afloat a few more years until retirees tried to actually cash out. It is not coincidental that the baby boom turned 63 just as the market collapsed.

Posted by: yellojkt | March 17, 2009 3:14 PM | Report abuse

Me too Yoki. And I'm glad to hear that your doctor is now paying attention. I'm sorry to hear about yesterday's ordeal. Nothing to make you feel worse than sitting around a hospital wondering why you're there and whether anyone will notice.

So, DNA Girl, AIG's position is more or less, "We fired the no-good bastardages but we still have to give them a bunch of money?"

Posted by: Ivansmom | March 17, 2009 3:16 PM | Report abuse

I had it mixed up. It's a country Jerry Seinfeld knows about in:

Jerry: Jack, I was vacationing with my family in Europe, in a country only rich people know about --
Jack: Stenborgia?
Jerry: No, better. But I can't tell you.

Posted by: yellojkt | March 17, 2009 3:19 PM | Report abuse

byoolin1,
Apple's online store is hyping their keyboard as NEW! Which briefly made me wonder. What I'd like to see is a new mouse. The ball on the existing one gets dirty too easily.

NY Attorney General Cuomo's revelation of million-dollar bonuses by the dozen at AIG is pretty dismal. I suppose the mood in Congress will be to pull the plug on bailouts, all of them. Managers at GM and Chrysler must be cursing AIG today.

Posted by: DaveoftheCoonties | March 17, 2009 3:23 PM | Report abuse

Ivansmom,
I think the true AIG management position is: "Oh crap, just a few more days and we woulda all made out like bandits one last time, and let the majority owners deal with the fallout. What bad luck."

Posted by: DNA_Girl | March 17, 2009 3:28 PM | Report abuse

DotC,

Cursing AIG.... maybe, but more likely the line workers in Detroit who have done givebacks and then had to cut salaries to get the deals made there.

Flat out, the factory workers who are unionized have been blamed for all the ills that have beset their companies.

Funny how a guy like Cheney gets a free pass. Of course, it looks like that "free pass" can't take him to Canada or France.

Like with Bush, Cheney can easily get a free pass from the MSM on dozens of issues during their administration. History is not safe with a guy like Cheney around.

Posted by: russianthistle | March 17, 2009 3:30 PM | Report abuse

I can't even begin to imagine how effed up everything would be if Bush had actually gotten that scheme (Social Sec. privatization) passed! We didn't just dodge a bullet there, but a howitzer blast!

Posted by: BaileyReynolds | March 17, 2009 3:36 PM | Report abuse

Yet another inadvertent consequence of unfettered technology...

http://www.nytimes.com/2009/03/18/us/18juries.html

*shaking my head*

Posted by: Scottynuke | March 17, 2009 3:55 PM | Report abuse

And in the "sorta good news" department...

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/17/AR2009031701911.html

Posted by: Scottynuke | March 17, 2009 3:58 PM | Report abuse

Gosh, Scotty, you're not reading newspapers during working hours, are you?

Posted by: Yoki | March 17, 2009 4:08 PM | Report abuse

I'm reading Web sites, silly! :-)

Posted by: Scottynuke | March 17, 2009 4:11 PM | Report abuse

ZOMG! I've had the same insurance company since 1994, been happy with them, but recently got a few much cheaper quotes from other insurers for home/auto because, why not?

Everything's up for renewal right now, told my agency about the other quotes, and with slight changes in my policies, they're matching the much cheaper quotes for better coverage.

Imagine what might have happened if I'd had a security system other than the 2 dogz.

Boodlers, go check yours! (People who were already, like, actual adults, may have done this years ago).

Posted by: -dbG- | March 17, 2009 4:16 PM | Report abuse

We should all look at this
http://en.wikipedia.org/wiki/Cassandra
(someone who correctly warns, but is not believed - often confused with a "chicken little")

We probably won't be able to bandy the term around here without causing confusion, however.

Posted by: Jumper1 | March 17, 2009 4:16 PM | Report abuse

NY Review of Books has an essay by Amartya Sen ('98 Econ Nobel Prize) on
Capitalism beyond the crisis
http://www.nybooks.com/articles/22490

Posted by: DNA_Girl | March 17, 2009 4:27 PM | Report abuse

NPR just aired a very persuasive man who spoke in favor of letting furor about AIG bonuses die down. I.e., don't worry about 'em. Be grown up. Don't be an irrational mob.

dbG's 3:05 Cuomo link, which I think should be
http://voices.washingtonpost.com/economy-watch/2009/03/1_million_bonuses_for_at_least.html
pretty much nullifies any sympathy I was developing for his argument.

Posted by: Jumper1 | March 17, 2009 4:31 PM | Report abuse

I have USAA which is about the best insurance in the world. I do not price shop them, I just call and order coverage. I have car, life, and homeowners through them. I also parked my retirement plan rollover there. Not that it is doing better than anywhere else. We also have three credit cards, two car loans, and a HELOC from USAA. I've been pretty tempted to move my checking over as well.

If you are eligible (current or former military or family member of one), join them. They are the only financial institution I trust not to rob me blind.

Posted by: yellojkt | March 17, 2009 4:49 PM | Report abuse

Sounds good, yello, but I'm not sure I'd qualify since my dad passed away around 1955. This actually was the first time I've shopped around in 14 years.

I just read Cuomo's letter. Go, Cuomo, Go!

Posted by: -dbG- | March 17, 2009 5:09 PM | Report abuse

Although I didn’t hear the NPR analysis mentioned by Jumper1, I suspect I would agree with it. The whole discussion is like the folks on the Titanic arguing over whether the Captain should be paid for the trip. Some of the passengers are arguing that his pay for this trip should be taken away, or at least taxed at a 98% rate. Many of the passengers in steerage take this opportunity to argue that all Captains are overpaid. Some of the crew are refusing to help with the lifeboats, and are actually getting in the way, because they wanted a different captain for this cruise. It’s an interesting discussion, but there are bigger issues to be addressed.

I understand the importance of appearance in generating and maintaining consensus for action in a political system such as ours. But the info about the retention bonuses has been out for some time, at least the general level and purpose. Why are these suddenly “news” within a day of the announcement that some of the AIG money had been paid to foreign banks? I can think of two reasons:

1. It’s just a coincidence.
2. There’s an understanding at both AIG and the Treasury that tens of billions of dollars in payments to foreign banks is NOT going to go over well with either the public or much of Congress. The announcement and subsequent attention given to the bonuses is a distraction. (I’m not saying AIG and the Treasury overtly colluded in this. They didn’t have to – both of them would be motivated to do this for their own interests.)

Now, I’m quite a believer in coincidence. But in this case I think the audience is being manipulated. Everyone’s attention and indignation has been focused on the bonus payments which are a) relatively small and b) relatively easily resolved. In the mean time, those foreign payments (which would be REALLY HARD to resolve) have escaped much notice. I actually admire this, it’s very well done.

Posted by: Steve-2 | March 17, 2009 5:45 PM | Report abuse

Good advice on the insurance dbG.

I'm pretty sure I have some.

Posted by: RD_Padouk | March 17, 2009 6:05 PM | Report abuse

Yep. I asked my wife if I have life insurance, and she said, "Just as much as I could get without arousing suspicions."

Posted by: RD_Padouk | March 17, 2009 6:28 PM | Report abuse

*Snort*

Posted by: Yoki | March 17, 2009 6:30 PM | Report abuse

RD,
Never be worth more to your spouse dead than alive. The temptation is too great.

Posted by: yellojkt | March 17, 2009 6:37 PM | Report abuse

Hilarious, RD.

Now, how much could she get without getting questioned?

Me, I got $1000 whole life and $5000 term. My dad bought the whole life policy when I was a baby.

Posted by: slyness | March 17, 2009 6:37 PM | Report abuse

As I always tell Mr. F, my ticket in the SGLI (servicemembers group life insurance) sweepstakes is for a bigger jackpot than his in the FSGLI (family SGLI) pool, by 4 to 1.

Posted by: frostbitten1 | March 17, 2009 6:59 PM | Report abuse

Uh oh!

Posted by: Yoki | March 17, 2009 7:22 PM | Report abuse

Have a good evening, folks. There's always tomorrow, and perhaps better news. I'm tired and just feeling really crappy so it's going to be an early night for me.

I don't think any president has come to office with as many problems as President Obama has to face, except maybe Roosevelt. And on television news it's as if these problems just came out of thin air, and that's not true. There was an administration before this president was sworn in. President Obama's head will be white before next year at the rate this mess is coming to head. And by election time the Republicans will blame every sorry bit of this mess on President Obama.

And as for those governors refusing stimulus money, such as the, and I don't know what title to put here, in South Carolina, if they're trying to profess integerity, they've lost me. Perhaps if they had profess this honorable trait while Bush was in office, I could see their stance, but they were so quiet, not a sound from them while the Bush administration was spending money like a gambler at a black jack table in Las Vegas. And a drunk gambler at that.

No sir, let's call it what it is, plain old racism. Front, center, around the sides, in the back, everywhere one looks, it stinks to high Heaven, racism. All of sudden someone wants to ride the moral high horse because the White House isn't the same.

Posted by: cmyth4u | March 17, 2009 7:53 PM | Report abuse

Actually, frosti, I'm mildly surprised (not displeased, you understand!) that we don't hear about more younger enlisted folks being bumped off for the insurance money. That would pay off a heck of a lot better now than it would have when I first enlisted, lo those many years ago.

Posted by: bobsewell | March 17, 2009 7:57 PM | Report abuse

Cassandra - While there's no doubt that any number of folks are at various places along the racism scale as it affects their views of the President, somehow I don't think that Hillary Clinton would have had any easier a ride if she'd won the office.

Posted by: bobsewell | March 17, 2009 8:01 PM | Report abuse

Bob-re: your 7:57, alas many years bring at least one such attempt. In my observation many post deployment divorces that are blamed on "the war changed him/her so much" really would have happened anyway-but with the irritant away for a year and a chance at a big pay out, why not wait?

Cassandra-I agree with Bob. The reps have a lot of incentive to position themselves this way. They won't get any credit if all goes well, and they just might have a shot at "I told you so" later.

Posted by: frostbitten1 | March 17, 2009 8:12 PM | Report abuse

Cassandra, I'm not so sure it's a racism thing, or if it's party politics. First, I'm not sure how much pull governors had when it comes to the Bush Admin spending federal money...state v federal powers and what not. Next, I realize that turning down the $ is a southern/republican governors thing, but I thought it had to do with a not-wholly-funded mandate problem with unemployment issues....requiring them to expand their coverage beyond what the $ will pay for. I think it was Virginia (could have been either HoCo or MontCo MD, don't really remember -- age, ya know) who did the same thing with NCLB money a few years ago. I expect that the hooting-and-hollering was done for the cameras, and that the $ will be taken after all, but I think those governors who complained publicly will rue the day they did so, probably right around the time of the next campaign season (can't you just see their opponents' tv ads now).

For one or two of those governors, this is the only national attention they're likely to ever get, and being politicians, tv crews are like catnip...they can't help themselves.

Posted by: LostInThought | March 17, 2009 8:13 PM | Report abuse

Hey All (and Al) -- I've been sorta lurking, with no real time to participate. Exceptionally busy (about which I refuse to complain) and just simply outta breath. I'd rather b-tch about too much work than not enuf, dontcha know.

As for those governors who will not take the stimulus money, the money which would (if used properly, *ahem*) help the citizens in their respective states, I would hope that those fine citizens would throw them out of office the next go-round.

Ivansmom, I am wracked with exhaustion doing research (in anticipation of drafting a pleading due next Tuesday) on statutory construction pursuant to a letter to our client from a gummint agency (to remain unnamed for these purposes). We're working on the "arbitrary and capricious" (which I think are FABULOUS names for cats) standard to knock the agency on its very broad backside. It's kinda fun, but it's also very frustrating. The bar is (probably intentionally) very high, but we're gonna go at it anyway. And, yeah, I know what I'll be doing this weekend if I can't get more things done by the end of this week (which is looming).

I have lurked, I have blurted and now I'm done.

Enjoy the evening, wherever you might be.

Posted by: firsttimeblogger | March 17, 2009 8:13 PM | Report abuse

Gosh! "Arbitrary" and "Capricious" really ARE extraordinarily great names for cats, aren't they?

Posted by: bobsewell | March 17, 2009 8:24 PM | Report abuse

I think I'm Arbitrary. Or is that Piesces?
I know I'm not a Capricious, for sure.

-Wilbrodog

Posted by: Wilbrod_Gnome | March 17, 2009 8:33 PM | Report abuse

Perhaps as you say, it's not racism, but then I've never heard racism called racism. It's been my experience that racism is usually cited as some other imaginable ill, and can therefore be claimed as non-existent or not apply, in either case, denial big time.

Posted by: cmyth4u | March 17, 2009 8:41 PM | Report abuse

The frostcats do not approve of the accumulation of new cat names before there are new cats, but I'm saving Capricious for sure. (Arbitrary is good too, but it doesn't fit the frostfam cat naming conventions)

Posted by: frostbitten1 | March 17, 2009 8:42 PM | Report abuse

Racism is possible, maybe even probable, but it isn't necessary to explain the current situation. Childish partisanship is sufficient explanation. That is: the stance of these governors can be sufficiently understood by recognizing that they are stupid, without having to consider whether they also are evil.

Posted by: ScienceTim | March 17, 2009 9:09 PM | Report abuse

Catbitrary -- so true, with a soupcon on con to boot.

But the best name for a dog--besides the ones you already have -- could be this:

Leon Trosky: Leon for short. I like calling dogs by "real" names....


Posted by: CollegequaParkian | March 17, 2009 9:12 PM | Report abuse

SeaSea,

Leon Redbone, too: good name for a dog. I grew up with a huge Maine coon cat next door. That thing could take on a cougar and survive. Name?

Robert the Cat, aka BobCat.

Posted by: CollegequaParkian | March 17, 2009 9:17 PM | Report abuse

Racism, absolutely not. An increase in business taxes, yes, and future extensions of unemployment benefits. And a difference in party philosphy, yes--Perry, Sanford, Jindal and Barbour in the same camp. Racism, no. Too easy an excuse or rationale, Cassandra.

http://www.statesman.com/news/content/region/legislature/stories/03/13/0313texstimulus.html

Posted by: laloomis | March 17, 2009 9:21 PM | Report abuse

To pick up on ScienceTim's and Mudge's comments about earlier depressions, there have been many in America's history. The 1890s were a horrible time, but there was also a major depression starting in 1837 that lasted into the early 1840s and about half the banks in the U.S. closed. Unlike today, as Tim pointed out, that money was gone. There was no FDIC to insure accounts. That's quite a difference from today where less than a percent of banks have failed but they are all taken over and the depositors don't notice the difference. The bank closes on Friday and re-opens on Monday with all the money intact.

Whatever it is we are experiencing now, it is nothing like those earlier depressions. I posted a comment on somebody's Post chat several months ago that when we hear the comment about some economic indicator is "the worst since the Great Depression" it doesn't mean "same as the Great Depression." Yes, things are very bad and recovery will be slow, but it isn't the same as the 1930s.

Posted by: -pj- | March 17, 2009 9:49 PM | Report abuse

Cassandra, remember those who constantly claimed HRC was falling in the polls because of misogynist tendencies of the electorate, but refused to look at the issues at anything other than a superficial level? They were labeled Kooks. Nutcases. Man-haters. And their arguments were dismissed out of hand. I think it might be tempting for some to see racism whenever there's a gripe with the current Administration, but not only is it risky, it's not generally productive. Politics is business, and a cut-throat one at that. Barack's had a lifetime to hone his skills in staying on-point, not getting bogged down in the petty head-games. I'm sure it's a big part of why he won the election.

Also, if you look at pretty much every president (except Reagan -- a Miss Clairol girl, or L'Oreal, because he's worth it?), they age/grey-out pretty quickly.

http://www.mofopolitics.com/2009/01/25/video-rapid-aging-of-us-presidents-while-in-office/

Posted by: LostInThought | March 17, 2009 9:49 PM | Report abuse

Hi, just testing after changing my email here...

Leon Redbone is a good name for a dog, or Leon Russell...I remember David Letterman's dog Bob...

I like Japanese names for kitties - Michiko, Keiko, Neko (which means cat), Koneko (kitten). Also Ruby, Jade, Jasmine. My best cat was named Jaguar, but we called him Kit. Hey, Kit and Kaboodle - of course!

Posted by: seasea | March 17, 2009 9:58 PM | Report abuse

I think it is dangerous to claim to know what goes on in the mind of another. So I don't think one can claim for certain that racism is involved. Nor can one claim for certain that it isn't.

But as LiT and SciTim point out, why argue over a label? The policies of these governors seem indefensible enough regardless of motivation.

Posted by: RD_Padouk | March 17, 2009 10:00 PM | Report abuse

Oh, man. There's a WaPo front page headline that sends chills down my spine: "France, Germany Urge Discipline."

How come I'm seeing Bardot in a bustierre and thigh boots, and Dietrich with a whip?

Any time Germans start talking about discipline I get reeeeeeeeeeeeeellllleeeeeeeee nervous.

Posted by: Curmudgeon- | March 17, 2009 10:04 PM | Report abuse

I agree with Cassandra's point that the Republican governors who refuse stimulus money hurt the poorest citizens of their states. Unfortunately, at least in South Carolina, a large percentage of those citizens are African-American. Not all, but many. Politics as usual, regardless of the labels.

Posted by: slyness | March 17, 2009 10:09 PM | Report abuse

Speaking of labels, I went to Lenten study group this evening, and the leader had on an orange sweater. She said she figured out when she was 17 that she was Protestant Irish, so she always wears orange on St. Patrick's Day. Since I'm Irish from both sides of the Pale, she suggested an orange/green striped shirt would be appropriate.

I'd love to hear Mudge's recollections of the Battle of the Boyne. You were with William of Orange, weren't you, Mudge?

Posted by: slyness | March 17, 2009 10:16 PM | Report abuse

You know what name I like for a dog?

Fred.

Posted by: Yoki | March 17, 2009 10:26 PM | Report abuse

I had an orange skirt in high school that I sometimes wore on St Paddy's day. I am of Protestant Irish heritage, probably of the lowland Scots who were brought in to settle Northern Ireland, causing all the Troubles...My sympathies are much more with the Catholics, though. Now I usually forget to wear green. And this is the day my dear mum died, so I raise a glass to her. (I used to get really out of sorts around this date, took Mr seasea to point out to me why.)

Posted by: seasea | March 17, 2009 10:30 PM | Report abuse

Yoki, I like Fred or Ralph.

Thank heavens I'm back. My Mac had a fatal grey screen and I spent tonight at the Mac store getting a new hard drive and in perfect, close the barn door after the horse is stolen, an external hard drive. Now I have a very clean computer :-(

Posted by: badsneakers | March 17, 2009 10:32 PM | Report abuse

Cassandra, do you mean racism to the president or to those who would be HELPED by the money?

It seems to me that minorities & urban voters tend to go Democrat for a reason.

Those Republican governors refusing to take money to help their electorate are going to shoot themselves in the foot. They are NOT helping expand their base by refusing to take aid aimed to urban areas.

They are getting glory in their party, that's it-- and it will be cutting off their nose to spite their face.... unless the bailout plan fails, in which case they look righteously Republican.

I liked Ahnold saying he'd take all the money the other governors reject.


Posted by: Wilbrod_Gnome | March 17, 2009 10:36 PM | Report abuse

Yay, sneaks, you made it! I should back up my data too...we all should.

Posted by: seasea | March 17, 2009 10:37 PM | Report abuse

I always wanted a dog named Fred Derf, because then his name would be the same frontwards and backwards.

Posted by: frostbitten1 | March 17, 2009 10:45 PM | Report abuse

slyness, I never claimed to be the smartest candle in the chandelier, but I was smart enough to stay the hell away from anything to do with Ireland and Irish politics. Them's a lot of crazy people up there.

As it happens, exactly two days before the Boyne (which was July 12, 1690, IIRC), I was quite a distance away, being well south of there aboard one of Adm. Torrington's ships off Beachy Head. Torrington was then First Lord of the Admiralty, and I suppose not a half bad sailor, though a drunk and a wh0remonger of the first rank (he was inclined to take two or three severely grass-stained wenches, if ye get my drift, to sea with him, the swine).

Anyways, old Artie (his real name was Arthur Herbert, First Lord of Torrington, an' ain't that a pip?) was commandin this here Anglo-Dutch fleet up agin' the French (as usual), who was also up north messing about and landing troops in Ireland. But down where we was in the channel, we found ourselves outnumbered by the Frogs.

"Whadja think, Mudge," Artie asks me one day.

"Well, Yer Admiralship," I sez, "by my count ol' Comte Tourville [whose real name was Anne Hilarion de Tourville, swear ta gad] yonder has about 75 ships plus them 23 fireships, and you've only got these 56 ships includin' all them Dutchies [and they was always damn good seamen and fighters; we just needed twice as many of 'em]. And if yer inclined to be countin' gunbarrels, which I always recommend most highly, Yer Saltness, why then he's got 'bout 4,600 cannon, and we got maybe 4,150. So you wants me recommendation? I sez we turns tail and skedaddles, that's wot I sez. But it's yer fleet, yer excellentitude, so its yer call."

"Mudge," sez he, "yer always was a wise old coot. That's what we'll do." And then old Torrington goes and screws it all up. He writes a letter to London asking fer THEIR bloody opinion. Turns out King William -- still wet behind the ears after overthrowing James -- is up north getting ready for the Boyne, and his wife Queen Mary -- maybe you heard a her -- was in charge back at the castle. So she confers with her advisers (hah!) and they think Torrington's estimate of Annie Hilarious's strength (meaning MY estimate of Tourville's fleet) was exaggerated. (Idiots. All my life I've hadda deal with idiots. And don't I look like I know how to bloody count?) So Queen Mary orders Artie an' me and the Dutchies to attack the Frogs.

more

Posted by: Curmudgeon- | March 17, 2009 10:53 PM | Report abuse

Very good point, Wilbrod. I gotta feeling that's more where Cassandra was heading.

It's always messy when race (or religion, or whatever other random cultural marker) is easily conflated with lack of political power. Being powerless sucks!

Posted by: bobsewell | March 17, 2009 10:55 PM | Report abuse

hi boodle. hope all is well with everyone.

been out of town for about a week and without much internet access. trying to get caught up, but am so incredibly tired still.

i have no problem with a special punitive tax for the aig nitwits because they deserve it, but we sure have a lot of systemic issues that need attention.

Posted by: LALurker | March 17, 2009 11:06 PM | Report abuse

2

Well, Torrington gets a letter with the Queen's reply, and he turns white as a sheet. ""Ere, Mudge, read what Her Mum has t' say." So I reads 'Er Majesty's order to attack Miss Hilarious Comtey LaTour, and I snorts just like a Calgary barrister wrangler.

"Mudge," Torrington sez, "now I ain't got no choice. I can't refuse a direct order."

"No, yer Wretchedness, I guess not. To quote a writer fella and very learned cove I know, this looks like it might end badly. Well, I'll tell the lads to get ready, an' it's been nice knowin' ya."

So the next day is July 10, and we're off Beachy Head, just a couple a cables west of them White Cliffs of Dover, and right near where's old William the Conqueror came ashore when he whipped Harald at Hastings (and that's a story I'll need to save for another day). Torrington sends the old Dutchman, Cornelis Evertsen (nicknamed Little Cornelis the Devil by his men) and his 21 ships into the van (the lead, the front, the "point"). We're next up with the Red Squadron, and brining up the rear is Adm. Ralph Deleval witha mixed Anglo-Dutch Blue Squadron.

We're crusing along line abreast with the Frenchies and the weather gauge, and right after breakfast (Purina Gruel Chex) we launches the attack, sailing down on 'em. Thing is, we miscalculated a wee tad, and left Chateau-Renault's too far out front. So then Chatty-Rennie's squadrom cuts across Cornelis Evertsen's line and double back on the poor SOB. Oh, the Dutchies fought a fine battle up for'ard there, but they was horribly outnumbered and lost four or five ships and a lot more battered. Finally Cornelis has had enough, and he manages to disengage. Meanwhile, we'd been fighting Annie Hilarious all day long, and getting licked for our best efforts. And in the rear Ralph Deleval and his squadron are taking their lumps, too.

"This has been a long day, Mudge, and we're getting the snot kicked out of us. Got any bright ideas, Mudge?" Torrington asks me. So I stops loading the cannon I'm firing, wipes the sweat and soot off me brow, and takes a look around the channel.

"Winds' driving us westward," I sez. "Tell yer wot, yer First Lordness, let's put on the brakes."

"Huh?" he sez.

"Order our fleet to drop anchor sudden-like," I sez. And suddenly he catches on. So we runs up the signal flags and soon as Bob's yer uncle we're all dropping our anchors. And the Frenchies who have been kicking our tails all day ain't paying attention, being cocky and over-confidant (hard to believe, ain't it?). And so the wind keeps on pushing them down the channel toward Mexico, and there we are, upwind, out of range, and safe at anchor. And the French got no way to sail back directly upwind at us.

more

Posted by: Curmudgeon- | March 17, 2009 11:31 PM | Report abuse

Ben Bernanke doing a television appearance from his hometown of Dillon SC (not a pocket of affluence) has to be something of a rebuke to the state's Republican politicians. I take it that Bernanke's old high school will be left to continue rotting.

I was too easy on AIG. Steven Pearlstein's indignation is truly righteous.

Posted by: DaveoftheCoonties | March 17, 2009 11:35 PM | Report abuse

3

"Mudge," Torrington sez, "you saved all our bacon this day, old son."

So we spend the few remaining hours of daylight repairing and reorganizing and doing what we can to get fixed up in case the wind shifts and we find ourselves enfrogulated once more. We'd been fighting for eight hours until the wind and tide took the French down the channel. Long about 2 bells that night (that's 9 p.m. for you lubbers) the tide turns, and we ups anchor and heads eastward for the Thames, though we had to burn 8 Dutch and one English badly battered ships to keep them from falling into French mits. And of course the Comte Tourville and his fleet pursued us, but ionce again he made a mistake, and had his ships pursue in line of battle. That meant they could only go as fast as their slowest ship. And meanwhile we wuz haulin' derrierre, as well we might.

So yes, we took a major licking and the French thought they owned the channel for a little while. And of course when we got back to London poor Arthur is in a heap o' trouble. They chucked him in the Tower of London and then they court-martialed him, of course, but he was acquitted, cuz he was ordered to attack despite his own best judgment, and it was the Queen's bright idea. So justice prevailed, even though Arthur found himself out of a job as First Lord of the Admiralty, and good riddance to it, too, methinks. What saved everyone's bacon was that William won the Battle of the Boyne, and also the French navy had failed to plan any follow-up to the Battle of Beachy head, so they got nothing out of their hard-won victory. When William found out Torrington was acquitted he was Royally Furious, had a hissy, and went all apologetic to the Dutch, blaming Torrington and making him the scapegoat (talk about being on kit!).

Torrington, for his part, went back to the House of Lords, but Billy Orange was still so pi$$ed he wouldn't seat him.

As for me, well, I had accrued a fair bit of shore leave, and you all know how I am about taverns and serving wenches.

So, slyness, that's why and how I missed the Battle of the Boyne. And I have no regrets whatsoever about it, neither.

Posted by: Curmudgeon- | March 17, 2009 11:51 PM | Report abuse

I correctly explained the bright, white, spectacular end of Sunday evening's Shuttle plume:

http://www.sun-sentinel.com/news/florida/sfl-flbcloud0317sbmar17,0,1009723.story

The Sun-Sentinel also has photos.

Posted by: DaveoftheCoonties | March 17, 2009 11:52 PM | Report abuse

Both Lou Dobbs and Anderson Cooper reporting on CNN tonight about AIG campaign contributions for 2008. Who recived the most dough-ray-mi? None other than the Democratic head of the Senate Banking Commmittee, Connecticut Senator Chris Dodd. After Dodd's involvement with Countrywide, will this newest revelation impact Dodd's political fortunes in the Nutmegger State? Washington Post's Chris Cillizza has been reporting very recently at his blog, The Fix, about Dodd's fall and slight rise in the polls.

Who follows Dodd quite closely in terms of dollar amount in receiving funds for the 2008 election run from AIG? Why, none other than Barack Obama, according to CNN.

http://washingtontimes.com/weblogs/back-story/2009/Mar/17/dodd-reaped-campaign-cash-from-aig/

Democratic Banking Committee Chairman Chris Dodd is the chief beneficiary of campaign cash from American Interational Group, AIG, the insurance firm at the center of public outrage for handing out lavish bonuses.

Dodd has received more campaign donations from AIG's political action committee and employees than any other lawmaker. Records made available by the Center for Responsive Politics show Dodd received $280,238 of the more than $4 million AIG has spent trying to influence Washington this decade.

LL: Ali Velshi was reporting on Anderson Cooper's first hour tonight that CNN was reporting about the AIG bonuses on Jan. 28. Apparently, so were other news organizations. Here's the AP story reported on Jan. 27:

http://www.talkingpointsmemo.com/news/2009/01/aig_will_still_pay_swaps_team_retention_bonuses.php

More from the Washington Times article:

Fox Business reported Dodd inserted language into the bill to place restrictions on any bonuses given by companies being assisted by the goverment that were handed out after February 11. Therefore, the "Dodd Amendment" would have effectively protected the bonuses AIG handed out to their executives since the bonuses were doled out before that date. ABC News similarly reported "Dodd's measure explicitly exempted bonuses agreed to prior to the passage of the stimulus bill."

Posted by: laloomis | March 18, 2009 12:03 AM | Report abuse

'mudge, you rawk. I love these stories. You know?

Posted by: Yoki | March 18, 2009 12:08 AM | Report abuse

Good evening, all.

Been too busy for the past couple of days to weigh in on some of these topics.

I won't rehash my comments from yesterday about what I think re. government money leaving the country.

I'd Boodled some time back about executive pay and bonuses (which as folks point out here, are the accepted vehicles for executive compensation, despite the inflammatory nature of those words at this time) and the idea that unless the Government stipulated exactly how that money should be used as part of the terms of the bailouts/loans/whatever (as earmarks, I would think...), it seems to me that compensation for all employees is part of terms of deal. If the employment contracts are still valid and call for folks to be paid, then I suppose that part of the cost of that company continuing to do buisness is to adhere to the repsonsibilites and commitments of the company in accordance with the law. I think that if there's cause to terminate the contracts or to modify the compensation then that's one thing (and I, for one, cannot claim to have intimate knowledge of those contracts one way or another, and if someone in here does, I'd love to hear about it), but just because people don't like them (for whatever reasons) or that the global and national economic situations have changed significantly during the run of the contract does not mean that the corporation no longer has to honor them.

I could go on, but I'm going to sleep.

But before I go, I think there are good reasons and bad reasons for state politicians to accept or turn down some or all of the stimulus package money (such as the terms of the deals), but I don't see how racism plays into the decisions at this point. And if governors were seeking to harm any given group of people, I think they probably wouldn't do it with press conferences and in front of TV cameras with the whole nation watching and recorded for posterity.

But that's just me.

G'night, all.

bc

Posted by: -bc- | March 18, 2009 12:21 AM | Report abuse

I see that Media Matters has all the truly fine points about the Dodd amendment--and corrects other sources such as Fox, Druge, Limbaugh:

http://mediamatters.org/items/200903170026?f=h_latest

Indeed, Dodd's amendment as introduced directed the Treasury secretary to require each Troubled Asset Relief Program (TARP) recipient to "meet appropriate standards for executive compensation and corporate governance": "a prohibition on such TARP recipient paying or accruing any bonus, retention award, or incentive compensation during the period that the obligation is outstanding to at least the 25 most highly-compensated employees, or such higher number as the Secretary may determine is in the public interest with respect to any TARP recipient."

The Senate adopted Dodd's amendment by voice vote. Subsequently, the conference committee assigned to work out the differences between the Senate version of the recovery bill and the House version -- which did not contain such a limitation on executive compensation -- included Dodd's amendment "with several modifications" in its version of the bill. Among those modifications, the bill adopted by the conference committee included the following language:

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

Posted by: laloomis | March 18, 2009 12:22 AM | Report abuse

evening all
Finally got to see the stars tonight,so I guess we may see the sun tomorrow.Calling for the 70's here.I can't wait.

Had a nice st Paddy's day,although I worked,I don't even think my bosses noticed the green I was wearing.

heard 3 rocking tunes on the way home
Lazy- Deep Purple
Statesboro Blues- ABB
walkin by myself- Gary Moore

Posted by: greenwithenvy | March 18, 2009 12:24 AM | Report abuse

*blushing as I crawl off to me hammock in the 'tween decks*

Posted by: Curmudgeon- | March 18, 2009 12:38 AM | Report abuse

stay up with this...I'd bet it's from the Fillmore East.

http://video.google.com/videoplay?docid=201145426325320696&ei=3HrASY7JBp7OqwK9icDcCw&q=allman+brothers&hl=en

Posted by: -jack- | March 18, 2009 12:41 AM | Report abuse

Yoki's right, Mudge, you rawk! I knew you'd have a great story and you did. I can understand how you weren't unhappy not to be with Billy Orange - not one of our more successful monarchs, he was...

Morning all (Al too!). Looks like it going to be another nice day in the Carolinas. I've got lots to do, so I'll go ahead and get started on it all.

Posted by: slyness | March 18, 2009 7:04 AM | Report abuse

God loves us so much more than we can imagine through Him that died for all, Jesus Christ.

Good morning, good morning, friends. Most of the population in those states (Southern)are African-Americans, and the poorest of the poor, so denying stimulus money has to be aimed at them and their plight. Why? Perhaps for some of the reasons mentioned in the above comments, but at the heart I still believe it to be race. And I'm sticking with my original point, I've lived here all my life, and I've yet to hear racism called racism. And I'm not calling anyone "evil", because if I went that far, I would most certainly throw myself in that pot.

We're human, we have failings, we have shortness, we're not perfect. Admitting this is the first part of healing. If we deny racism, how in the heck are we going to work on it.

Last week I went in a store to make a purchase, and there wasn't anyone in the store up front. Not a customer anywhere. The cashier was standing behind the cash register, yet when I came in and went to the aisle to get what I wanted to buy, he moved from there and went to some items beside the aisle where I'm standing. I was looking at the price of the item I wanted to buy, trying to decide if I should go farther, because it was a little expensive. And the clerk was pretending to arrange something. Finally, I picked up the item, and started to the check out, and this guy moves too. He rings it up and I pay. I leave the store, but not before telling him that I did not come in his store to steal anything. Although I'm aware people steal stuff, I was going to pay for what I bought. He tried to explain, I left without hearing the explanation. Bad me.

I'm not the oldest living person in the world, yet I have some age on me, and I've yet to understand why it is that people think African-Americans don't know what racism is, when we are the object of this hate. At some point, one does get it. And not everyone is racist, and that my friends is the beauty that one holds on to for dear life. That is the jewel that one treasures and keep.

Mudge, Slyness, Scotty, Martooni, and all, have a great day. *waving*

Yoki, I hope you're on the mend, dear heart. God bless and keep you. And each and everyone here.

Posted by: cmyth4u | March 18, 2009 7:09 AM | Report abuse

bc

These are the children(the ones that get in front of the tv cameras) of men that used to lynch us, and then dare us to call it a lynching. Oh, he just jumped out of the tree with a rope around his neck. duh. I'm not surprised at anything humanity does, and really, no one should be. We read the paper, we see the evening news. Ninety percent of that stuff we see and read is not good stuff. And sometimes these awful things are done by people that look like us. I'm not saying everyone is bad, because everyone is not bad, there are good people in this world, yet we have some that are not. Why would a man after being caught in a men's bathroom trying to entice another man, call a news conference?

I'm not elevating anyone for sainthood or demonsville, just trying to express a fact.

Posted by: cmyth4u | March 18, 2009 7:25 AM | Report abuse

I agree a bit with you on this one Cassandra. Talking about future political impact of this does not stop the immediate problems from getting worse for poor people in S.C. I hope those politicians change their minds, and fast.

Posted by: Jumper1 | March 18, 2009 7:52 AM | Report abuse

*Happy-Hump-Day-for-all Grover waves* :-)

Posted by: Scottynuke | March 18, 2009 7:56 AM | Report abuse

'morning all. Love is in the air. The double digit temperature (10-11C/50-52F) of the past couple of days have convinced the male cardinals that Spring is upon us. They were singing their heart out this morning.

I won't wade in the racism debate but I wll note the contempt these governors show of their poorest citizen.

165 millions is 0.1% of the 170 billion bailout already spent. I'm incensed too but somehow we will collectively have to chill out. Hundreds of billions are still needed to bail out AIG. The real (hundred of billions) question is: should AIG be bailed out?

Good story Mudge, I enjoyed reading it last night but I was too tired to comment. We are in the busy season at work and our own modest stimulus plan (new garage door, new roof on the garage, new door in the kitchen, some carpentry work around the house...) is keeping me busy.
Which is good, Idleness being the Mother of all Vices.

Posted by: shrieking_denizen | March 18, 2009 8:26 AM | Report abuse

One of the interesting themes I am picking up with regards to the recession is the notion that good things can come out of hard times.

While this might be delusional thinking at its best, I like to think that, in the long run, all of this will be beneficial to civilization as a whole.

Of course, that's also what some historians say about the Black Plague of the 1300s.

Posted by: RD_Padouk | March 18, 2009 8:26 AM | Report abuse

sd - great point. Tyranny of the Salient.

I don't think the government has any choice but to bail out AIG. AIG is an insurance firm. True, they are an insurance firm who assumed there would never be anything much to insure, but still, the primary victim of their collapse would be those who were insured.

Posted by: RD_Padouk | March 18, 2009 8:31 AM | Report abuse

Here's a novel idea:

Reminding people that Dunkin' Donuts sells...

Wait for it...

DONUTS!!

http://www.google.com/hostednews/ap/article/ALeqM5g6ZlLIzis_THo_Q0DjnX3AR_rwJgD9709FB80

*L*

Posted by: Scottynuke | March 18, 2009 8:59 AM | Report abuse

I came up with a good analogy last night. Or I thought it was good at the time. Part of the value of insurance is to spread the risk. Well, all these CDS issuers and buyers all bought insurance and then parked all their cars on the same bridge during a hurricane, left the keys in the car and headed for the pay phone to call in their loss.

The analogy made a lot more sense to me last night.

Posted by: yellojkt | March 18, 2009 9:01 AM | Report abuse

Pay phone? Showing your age YJ. Let me guess...you use tin foil to cover leftovers.

Posted by: LostInThought | March 18, 2009 9:17 AM | Report abuse

Uh, maybe the hurricane had knocked out all the cell phone towers.

I just so happen to have two remaining slices of apple pie covered with aluminum foil.

Last night my son and I broke into the extra chocolate pie I had made. It was our snack before watching Big Bang Theory together. I so miss Nerd Night with him.

Posted by: yellojkt | March 18, 2009 9:24 AM | Report abuse

bc, shriek --

Ruth agrees with you.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/17/AR2009031702940.html

I do, too.

Posted by: Scottynuke | March 18, 2009 9:26 AM | Report abuse

Verizon, at least, did well in the 2004 hurricanes. Then again, Frances and Jeanne were not exactly catastrophic, and Charley had a remarkably narrow swath--like a knife cut from Captiva to Orlando.

Posted by: DaveoftheCoonties | March 18, 2009 9:34 AM | Report abuse

I think Ruth needs to read Pearlstein, frankly. This nonsense about how sacred contracts are is crap. Lots of people revise, renegotiate, amend and otherwise change contracts all the time. Yes, I agree AIG needs to be bailed out, but this bonus business isn't a part of that.

And here's something that occurred to me last night: the argument is made that bonuses need to be paid to the very AIG execs who got us into this mess because the derivitives trading they did is/was so utterly complex that *only* they can now undo and dismantle it all.

So tell me this: if the problem is soooooo complex that only a handful of the perps themselves understand it...how do we know they are properly undoing it? If nobody can understand it but them, how do we monitor their alleged progress? How do we know they aren't coming to work and holding rubber-band battles and laughing all day long at the Treasury? Are they actually busting their asses to unravel their own messes, just as they once busted their asses to create them?

Put yourself in their shoes: you're getting paid a couple million bucks to show up every morning and do...what? And who's watching you? (Cuz the person watching you is also one of the miscreants.) And if you don't *perform, what are they gonna do, fire you (and break your contract)?

No. And the fact that bonuses were paid to 11 employees who have already left the company totally belies the entire "retention-of-key-employees" argument.

Posted by: curmudgeon-1 | March 18, 2009 9:44 AM | Report abuse

The chairman of AIG is on the HIll today. I hope the q&a leads to a better understanding of how and why it's so important to pay gazillions to the folks that cooked up the CDS debacle. Eleven former employees that recieved $1M in retention bonuses are no longer with the company. That would seem to counter the arguement that big bucks are needed to keep good people on board. This article makes the case that the learning curve on WS is lagging behind reality:

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/17/AR2009031703022.html?hpid=topnews

Posted by: -jack- | March 18, 2009 9:46 AM | Report abuse

There's an echo in here.

Posted by: yellojkt | March 18, 2009 9:50 AM | Report abuse

Anyone catch Indiana Senator Evan Bayh's announcemnt on Morning Joe this a.m. that he is going to form a group of 12-15 moderate or Blue Dog Democrats within the U.S. Senate?

Huffington Post seems to be out ahead of the story a bit:

http://www.huffingtonpost.com/robert-l-borosage/time-to-dog-the-dogs_b_176110.html

Now Evan Bayh, the Ken doll handsome Senator from Indiana, has joined with Tom Carper of Delaware and Blanche Lincoln to organize the equivalent of a Blue Dog group in the Senate. Bayh objects to early reports that described them as working to obstruct the president's reforms and water down his budget, arguing "we're not a counterweight to anybody. We're not here to obstruct anything. We're here to help get to 60 votes," referencing the threshold that's needed to overcome filibusters.

http://en.wikipedia.org/wiki/Blue_Dog_Democrats

"Blue Dog Democrat" is derived from the term "Yellow Dog Democrat." Former Texas Democratic Rep. Pete Geren is credited for coining the term, explaining that the members had been "choked blue" by "extreme" Democrats from the left.[3] The term is also a reference to the "Blue Dog" paintings of Cajun artist George Rodrigue of Lafayette, Louisiana. The original members of the coalition would regularly meet in the offices of Louisiana representatives Billy Tauzin and Jimmy Hayes, both of whom had Rodrigue's paintings on their walls. Tauzin and Hayes later switched to the Republican Party. The Blue Dog Coalition was formed in 1994 during the 104th Congress to give more conservative members from the Democratic party a unified voice.

Posted by: laloomis | March 18, 2009 9:51 AM | Report abuse

Good morning, all.

Thanks for pointing that Marcus piece out, Scottynuke.

It seems to me that in bad times people go looking for someone to blame for whatever they perceive to be "the problems," for reasons things are happening, based on their relative perspective.

It's true that contracts can be renegotiated between parties that are amenable to it.

Still, the rule of law stands, and we don't have a very good recent track record with Presidents who decide that the Adminsitration's ends justify sidestepping the law in the name of expeditiousness.

bc

Posted by: -bc- | March 18, 2009 9:52 AM | Report abuse

Vice versa, 'Mudge.

Red-faced and waving pitchforks is great for dealing with a big pile of hay and hungry horses.

For dealing with an attempt to extricate a lot of companies out of a very difficult mess, while still providing some value to the public and not scaring off other companies that might help repair the damage? Not so much.

Posted by: Scottynuke | March 18, 2009 9:53 AM | Report abuse

While I'm ranting, I had to re-sign in with WaPo.com both yesterday AND again today. I'm getting a little sick of this.

Posted by: curmudgeon-1 | March 18, 2009 9:54 AM | Report abuse

Mudge. sounds like you're saying anarchy is the way to go. Toss the rule of law right on out the window. That's rational.

Contracts get renegotiated by only one side? Even though that's not negotiation...cool...let's go with that. You're a contract employee, right? That employment contract of yours...let's switch that from $100,000 per year to $10,000. Retroactively. I mean really...who knows if you're editing or boodling. Don't want to give it back? Cool, we'll just tax the crap out of it. Don't like it? Quit.

Use of the word perps shows your bias. Very broad-brush. And it can't be undone...no spinning the world the other way. The best that can be done is to go from here.

Posted by: LostInThought | March 18, 2009 9:58 AM | Report abuse

I'm not following exactly what AIG is doing right now to salvage their position and get themselves (and us) out of this mess of their making. They sold the CDSs. Are they honoring them or not? At face value? Are they writing new ones to replace the old ones? Are they buying back ones they've already issued?

It seems that right now they are just acting like a claims adjuster and writing blank checks to any bank that comes up and files a claim. You don't need to be a quant to do that. They need to hire the guys that Michael Moore interviewed in Sicko where SOP is to reject every claim and where down the client until they walk away frustrated. Or die. Whichever comes first.

The first rule is always go after the guy with the deep pockets and with Uncle Sam owning 80% of the business, I know who pocket is getting picked. And a serious problem is the whole Citi/Goldman/Lehman/Treasury revolving door where the relationships are a little too cozy.

Let's put Ralph Nader in charge of the bailout and see how well the fatcats fare.

Posted by: yellojkt | March 18, 2009 10:00 AM | Report abuse

Aw, c'mon, Scotty and bc. Red faces and waving pitchforks is *exactly* what's needed to get the attention of people like Ed Liddy, Geithner, and anybody else who is doing "business as usual." You got a better idea how to get their attention? Because the calm reasonable approach you guys are advocating simply has not worked.

bc, you say that in "bad times people go looking for someone to blame." You make it sound like all this was just some unfortunate turn of events that just "happened" without human cause, and that we simply "perceive" there is a problem "based on our perspective."

Yer effing-A right I "perceive" there is a "problem from my perspective," and yes, we damn well *do* know exactly who to blame, and I have no problem whatsoever pointing fingers. You guys sound like anger isn't a rational, appropriate response to what's going on. And you sound like you're willing to just go along with whatever bailout terms come down the pike without protest.

Well, not me. The bonus situation at AIG is simply wrong, wrong, wrong, and I'm not rolling over about it. Pearstein had it right.

Posted by: curmudgeon-1 | March 18, 2009 10:06 AM | Report abuse

Sacred contracts? Even Republicans in Connecticut are scrambling--along with the Connecticut AG Blumenthal, Democrat and former Washington Post reporter--to undo the Connecticut Wage Act. Is a bonus a wage?: a question that must be grappled with...

http://www.courant.com/news/local/hc-aig-bonus-block-0318.artmar18,0,178354.story

The embattled insurance giant, which has received about $170 billion in federal bailout money, has said it is legally bound to pay the bonuses because of a provision in the Connecticut Wage Act. Many of those receiving the bonuses work for AIG's financial products unit in Wilton [Conn.]. ...

But in a document released to The Courant through McKinney [state Senate Republican leader from Fairfield, Conn.], the company said it had been advised by outside attorneys that "a breach of the retention plan would subject it to claims for not only the contractually owed payments, but also penalties and fees under the Connecticut Wage Act."

"The Wage Act provides for the recovery of double damages and attorneys' fees when wages are improperly withheld and the employer's refusal to pay wages lacks a good-faith basis," the company's five-page document said. "In addition, individual managers who decide to withhold wages that are due are individually liable for violation of the Wage Act."

Too bad CNBC/MSNBC's Erin Burnett wasn't given a bit more airtime on Monday to explain the details. Of course, check out Chris Cillizza's The Fix blog this morning where he tackles the critical question of who within the Obama administration knew what about the AIG bonuses and when. Perahps someone in Costa Mesa will bravely raise the question at this week's town hall with Obama?


Posted by: laloomis | March 18, 2009 10:07 AM | Report abuse

No, 'Mudge, it's not a case of rolling over, it's a case of not jerking your knee so effin' hard you end up having to pull a Weingarten.

Posted by: Scottynuke | March 18, 2009 10:12 AM | Report abuse

SCC: ...wear down the client...

My homonym problem is only getting worse.

Posted by: yellojkt | March 18, 2009 10:13 AM | Report abuse

Torches:

http://www.rockpapershotgun.com/images/dec08/mob.jpg

Pitchforks:

http://www.trygve.com/pitchfork.jpg

Public dissatisfaction/mob action:

http://farm1.static.flickr.com/176/450382623_8ec38093bc.jpg

Posted by: laloomis | March 18, 2009 10:15 AM | Report abuse

I was wondering who are the remaining major stockholders of AIG (besides us, the new owners). And how they are managing to stay very well invisible right now. Is Hank Greenberg still a big owner along with the Starr Foundation? What part are they playing? Are the board members of Starr still cozily overlapped with AIG? I wish some real reporters could ferret out some of this.

Posted by: Jumper1 | March 18, 2009 10:22 AM | Report abuse

Interesting discussion about contracts. Yes, they're important as building blocks of the social contract which holds the country together. No, they're not sacred. Yes, we want to discourage unilateral, retroactive revision of contracts. I don't really think that's what we're talking about with the AIG "bonus" problem. [I continue to put "bonus" in quotes to remind us all that these are not bonuses as we think of them, but a contractually set portion of regular compensation.]

AIG entered into a contract with the US gummint, by extension the taxpayers, to take a large amount of money (billions and billions...). In return AIG promised not to fail, as failure would mean default on its obligations to its customers and, in the worst case, the collapse of several financial institutions with a global reach. The AIG/gummint/taxpayer contract was made under circumstances in which negotiators and commenters from the gummint and taxpayers expressed anger at overreaching, disproportionate compensation, and general disregard for the country's economic welfare. Arguably implicit in the terms of that contract was the notion that disproportionate forms of compensation would not be paid using money from that contract. Were those terms explicit? No. Should they have been? Probably. Would AIG have taken the money (made the contract) with those terms? Apparently, yes, as they're even now asking for more.

The problem is that AIG had outstanding employment contracts with people, including former employees, which specified "bonus" payments. AIG, in a particularly stark example of cluelessness, chose to honor those contractual provisions. What would have happened had they not? Well, perhaps the employees and former employees would have sued. Perhaps not. In any case, it wouldn't have brought down the company (any farther than it already is). Morevoer, that really isn't, or shouldn't have been, the gummint's problem.

As far as anyone can tell, pretty much everything AIG is currently spending derives at least in part from gummint money. Thus, the assumption, so far uncontroverted, is that the bonuses were paid in part with gummint money. AIG chose to honor an express employment contract provision rather than an implied gummint contract provision. This was no doubt defensible on purely technical legal grounds. Was it defensible as a matter of equity? I don't think so. Was it smart, as a matter of biting the hand that shovels money your way? Evidently not.

Posted by: Ivansmom | March 18, 2009 10:26 AM | Report abuse

Scotty,
Which is why we need congressional hearings and show trials and maybe a kangaroo court or two. Let's get some people under the hot lights and make them squirm. Make the guy with the $3.7M direct deposit explain what he does all day to justify that salary.

We may be barking up the wrong tree. I bet all the rats have already left the ship and the guys that got left behind weren't the ones with the hand on the tiller (or in the till).

In 'God Bless You, Mr. Rosewater' (which is very high on my re-read list), the advice is given to always be in the room when large amounts of money changed hands to catch the crumbs.

In the mortgage bond industry it seems that the actual underlying assets spent so much time being passed around hot potato style that the entire loaf became crumbs in a way that makes Jesus with the loaves and fishes seem like an under achiever. Only in this case everybody is going away hungry.

Posted by: yellojkt | March 18, 2009 10:29 AM | Report abuse

One other observation about the AIG/gummint/taxpayer contract: it, like the other financial bailout contracts, was not initially negotiated by the current administration. Speculation about who in this Administration knew about what and when verges on clueless. Of course, there's a lot of that to go around in this mess.

Posted by: Ivansmom | March 18, 2009 10:31 AM | Report abuse

Thanks to Mudge for my tasty Purina Gruel Chex this morning. Yum.

Posted by: Ivansmom | March 18, 2009 10:32 AM | Report abuse

And I post my rather blasphemous metaphor just as a new kit goes up.

Posted by: yellojkt | March 18, 2009 10:32 AM | Report abuse

New Kit!

Posted by: Yoki | March 18, 2009 10:48 AM | Report abuse

Mudge, all I'm suggesting is that you and I are not Economic experts or experts in the law or executive compensation.

I do have some first-hand knowledge and perspective on some of these matters - as do you - and I'm just telling you what I think.

Personally, I believe in relativity, and the idea that the same events and situations look different to different people. Isn't it fair to suggest that the economy and - for example - the AIG situation may look different to you, to me, to Cassandra, Perlistein, and Marcus? To everyone?

I don't think anyone can know exactly what caused Humpty Dumpty to fall off the wall (hey, maybe he *was* pushed, but can ya prove it?), or what all the King's Horses and all the King's Men can do about it.

Clean up the mess (omlets, anyone?), and try to come up with a better situation than an egg on a wall.

This economy and the AIG situation didn't "just happen." Lots of things need to change, and quickly. People in charge of some companies should be relieved of their duties and contracts not renewed. Regulation should be added to financial transcations, and limits set where appropriate. A revamp of the systems are in order, and are in fact underway. I'm all for it.

But I'm wary of the torch and pitchfork scene. Make me think of mob psychologies, lynch mobs, etc.

And, as I pointed out a few days back, that some could draw a line of relationships between WWI, the Great Depression, demagoguery, Hitler, Mussolini, Stalin, and WWII.

But again, that's just me.

bc

Posted by: -bc- | March 18, 2009 10:54 AM | Report abuse

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