Thursday, March 19, 2009

Wall Street Entitlement: Family edition

Great stuff on AIG’s disgraceful bonuses by people smarter than I... The TPM crew rips away here, here, here plus AIG's internal bonus docs. Jane Hamsher dismantles the “Blame Dodd” fib. Digby takes down Limbaugh & the GOP’s new “AIG Stimulus” mantra.

On Tuesday, Rush Limbaugh claimed Wall Street firms' “salaries are pretty small. They work on bonuses, via contract based on merit." This is where my father would say, "Does what you're saying to me, make sense to you?"

If the current AIG contracts specify compensation is to consist primarily of bonuses "based on merit", the bonuses wouldn't have been paid at all. Fer chrissakes the AIG & Merrill-types not only have done a spectacularly shit job but they've also completely cocked up the world economy! How can they possibly justify "merit" bonuses? Simple. Regardless of their companies' profitability, Masters of the Universe believe huge bonuses are their god-given right.

Case in point: I just got off the phone w/my 75-year old mother. Mom's income is largely dependent on her modest portfolio. Sadly, it's w/Merrill Lynch for the foreseeable future. (Due to the nature of her investments it's currently too complicated & costly to switch).

Last week Mom spoke with her Merrill "financial advisor." Her "advisor" was whining about the cost of putting her two kids thru private school. Mom chimed in, "You did recently received a big bonus." Advisor snapped back, "I deserved it!"

This financial advisor's sense of entitlement & her disconnect goes a long way towards explaining Tim Geithner's inaction, Larry Summers' "The government cannot just abrogate contracts" position & the Fed's inability to inform Obama about AIG's bonuses until the day before (WTF?!?).

It's bad enough stopping AIG, Merrill & BOA's bonuses didn't occur to any of them. But it's astonishing they failed to foresee the oh-so-predictable outrage to follow.


*Update: More TPM on potential fraud charges for AIG here & here.
**Edited slightly for clarity.