flynn23 wrote:
You want the best and brightest to be compensated, with really, no limit.

In this case I think what is frustrating is that we're not talking about "best" or "brightest" but "closest to the money." We have examples of performance bonuses being paid out by companies that are, for all intents and purposes, bankrupt. I'm all for profit sharing by successful companies, but paying it out when your company is bankrupt and being propped up by the federal government is nonsensical. There are no profits to share, so what, exactly, are you sharing? The argument that "we have to do this or we'll loose talented guys" is a non-starter in this environment. No one in the banking industry is on a hiring binge right now. The last thing anyone in any industry wants at this moment is to be on the street looking for work. Those words are a code for something else - something which becomes clear when you look at how AIG's bonuses are structured.

In the case of AIG we're not talking about profit sharing. These are retention bonuses that were negotiated last January when it ought to have been clear to those close to this disaster what was about to go down. These people demanded more money or they would simply walk away from the mess they had created. They've squirreled away enough money at this point that they don't have to work again for the rest of their lives. They clearly threatened, when the going got sour and it was clear that there weren't going to be profits for performance bonuses, that they were unwilling to work at their salary level, and a substitute bonus must be created - or they'd leave.

AIG was not afraid of loosing talent. They were afraid of loosing money. They had billions wrapped up in this stuff. It was about to explode. Their traders were the only people who understand all of it. If those traders left, it will be more difficult to unravel, and more money would be lost.

Imagine if you had a software developer working a piece of code that was extremely complicated, required daily maintenance, and cost billions every day if it broke. And the guy wanted to quit. The million you'd pay him not to quit would cost you less than what you'd loose while the next guy came up to speed on how to maintain the thing.

Basically, these people have gotten themselves into a position where they are responsible for billions of dollars, and they are blackmailing the management of AIG and the United States Government. We have to pay them millions or they will walk away, and we know that will cost us even more. Thats why the Treasury hems and haws about clawing back the bonuses but doesn't do anything effective. They know they're fucked. The banksters have a gun to their heads.

This isn't a case of rewarding talent. This is blackmail. And I don't think its illegal - I don't think prosecutions are coming unless evidence of book cooking comes to light. In this case these bonuses are intentionally disconnected from profits so there is no benefit to cooking the books.

It speaks to a more fundamental disconnect between our idealistic notions of talent and merit and the actual economy that we have, in that its not really about talent - its about what you control. Account executives are typically far better compensated than engineers, for example, not because what they are doing is objectively more important, but because they directly control access to revenue...

RE: Looting AIG

Each year since 1985, the editors of THE FUTURIST have selected the most thought-provoking ideas and forecasts appearing in the magazine to go into our annual Outlook report. Over the years, Outlook has spotlighted the emergence of such epochal developments as the Internet, virtual reality, and the end of the Cold War.

Here are the editors' top 10 forecasts from Outlook 2009:

Futurist Top Ten for 2009 and Beyond

Virtually from the first day Obama was inaugurated, right-wing polemicists have been alternatively accusing him of (a) radically reversing Bush/Cheney Terrorism policies, thereby ensuring that we're all about to be slaughtered by the Terrorists (see Cheney); and (b) fully embracing the Right's Terrorism approach, thereby vindicating the Bush administration's policies and exposing civil liberties criticisms of Bush as hysterical, disingenuous and wrong (see Lowry).

I've reached the point where I think much of what Greenwald writes is too shrill, but this one is worth looking at - if for no other reason than this clear inconsistency he observes in the right's search for a position on Obama's civil liberties policies. It says a lot about Obama - its still not possible to read where he stands on these issues.

I think the "enemy combatant" announcement WAS largely symbolic, as was the closing of gitmo, but reason these things are symbolic is that the problem has already been solved. At the outset the primary issue (in my mind) was the assertion that the US could seize any citizen at any time and hold them forever without explaining why. That idea finally died in Boumediene v. Bush. Clearly, if Bosnians in Gitmo can file a Habeas petition, Americans can too, and Gitmo is not a legal blackhole. Two birds - one stone - no more problem.

I certainly DO think the US government OUGHT to be able to detain actual terrorists, but there needs to be a process that determines that this is actually what they are doing. That process now exists. What arguments about this are left mostly amount to squabling over details - and while perhaps those details are important they do not represent the kind of basic civil liberties debate that was occuring in this country a few years ago.

Bush's legal theories about detention have been discredited. The left should declare victory and move on. It is better in any case to win these victories in court than to have a President merely declare that he won't bother to do something anymore - as the next administration can reverse that posture again.

Obama's "enemy combatant" policy: following a familiar pattern - Glenn Greenwald - Salon.com

In the first quarter of 2008, prior management took significant retention steps at AIG Financial Products. ... Some of these payments are coming due on March 15, and, quite frankly, AIG's hands are tied.

They knew the ship was sinking and the rats decided to leave unless millions more were paid to them - and so these millions were offered and now that the government has bailed out the company the millions must still be paid. Basically, they set up the system in advance so that it would continue to enrich them after it failed.

Outside counsel has advised that these are legal, binding obligations of AIG, and there are serious legal, as well as business, consequences for not paying.

Best argument yet for nationalization. Large government bailouts should, at least, require filing some kind of bankruptcy where a court can come in an make contracts void.

Looting AIG

They are known as the Wolfpak or simply “the boys.” They use fear and their fists to command respect in the surf along the North Shore of Oahu, a seven-mile stretch of some of the world’s most renowned waves. At the celebrated Banzai Pipeline, they determine which waves go to whom, and punish those who breach their code of respect for local residents and the waves.

On North Shore of Oahu, Enforcing Respect for Locals and the Waves - NYTimes.com

We are building a hacker space in Atlanta.

Want to help? Got time, money, or both?

www.FreesideAtlanta.org

Christian conservatives claimed victory and predicted it would send a message to biotech companies thinking of doing business in Georgia.

The bill was originally intended to restrict multiple births through invitro fertilization — inspired by the California “octuplet” mom. However, religious conservatives underestimated the reaction of couples who have had to cope with infertility... Five other Republicans joined Weber and the Democrat caucus to table S.B. 169, which forced Republicans into a 90-minute recess to rewrite the bill.

“We’re doing in five minutes things that ought to take a year and a half..." warned state Sen. Steve Thompson (D-Powder Springs).

Becker of GRTL: "it makes a statement."

Message received - loud and clear. Do not do business in Georgia as inevitably the legislature will cough up some poorly considered bill in an attempt to serve the limitless desires of one of their power hungry interest groups and trample on you in the process. I've seen this happen numerous times before in multiple contexts.

After nearly backing away from the issue, the Georgia Senate passes a ban to limit embryonic stem cell research | Political Insider

There have been a number of articles lately about people cutting costs by cancelling/cutting cable TV service.

This is an interesting discussion.

Cancel Cable TV

The analogue of the 1929 Wall Street crash is not the 2007 credit crunch, but the bursting of the New Economy bubble in 2000. The follies of the 1990s resembled those of the 1920s...

In 1937-38, markets and business leaders came to doubt the durability of the business foundations on which partial recovery from the Great Depression had been built. In 2007-08, markets and business leaders came to doubt the durability of the financial foundations that had supported consumption and asset price growth after the New Economy fiasco.

Our capacity to learn from the Great Depression is limited because we do not know how economies would have evolved after 1938 if politics had not supervened.

FT.com / Columnists / John Kay - Lessons from a 1930s rebound that petered out

The elites who run the US banking industry have had a great run of economic good fortune. They used this wealth to further strengthen their political power, both through donations to politicians of almost all stripes and more broadly through taking positions of formal and informal influence throughout the executive and legislative branches.

More here.

Our taxpayer money is ensuring their bonuses. We're making sure that companies, that banks survive. And eventually, of course, the economy will turn around. Things will get better. The banks will be worth a lot of money. And they will cash out. And we will be paying higher taxes, we and our children, will be paying higher taxes so those people could have those bonuses. That's not fair. It's not acceptable.

TPMCafe | Talking Points Memo | Geithner v. The American Oligarchs