Should AIG Employees be allowed to keep their Bonuses?
There are many people who are horrified by the large bonuses that AIG is about to pay some its employees after taking billions of dollars from taxpayers. There are quite a few people in faltered insurance giant AIG who are supposed to receive bonuses in excess of $100,000. This has made the American taxpayers very angry. Why should we as taxpayers be required to bail out a company that made countless mistakes and lost billions of dollars? After all, was it not these same people who placed all kinds of bets in the derivatives markets and lost. However, a big dilemma is at hand. Some of these people had probably already signed agreements with AIG to receive these bonuses. Is it correct for the government to step in and redo these contracts? Are contracts not the root of capitalism?
The government has made it clear that it will do anything they can to get the money back from AIG bonus recipients. Congressmen have even gone so far as saying that they will tax the bonuses 100%. However, the government should not just single out AIG employees. They should also go after Merrill Lynch bonus recipients as well.
Quite frankly, I think that the government does not have the right to stop these bonuses 100%. Perhaps, there are sales people who actually earned these bonuses because of sales revenue that they generated. Not every individual is responsible for the down turn of the company. There are other factors that have caused the collapse of AIG. The fall of Lehman Brothers was certainly something that effected AIG. AIG was forced to pay credit default swaps related to Lehman’s fall.
The bottom line is that there needs to be more regulations to keep financial markets in line. Deregulation, unfortunately, has not worked very well. Rules and regulations need to be set so that this financial crisis never happens again.
There are many people who are horrified by the large bonuses that AIG is about to pay some its employees after taking billions of dollars from taxpayers. There are quite a few people in faltered insurance giant AIG who are supposed to receive bonuses in excess of $100,000. This has made the American taxpayers very angry. Why should we as taxpayers be required to bail out a company that made countless mistakes and lost billions of dollars? After all, was it not these same people who placed all kinds of bets in the derivatives markets and lost. However, a big dilemma is at hand. Some of these people had probably already signed agreements with AIG to receive these bonuses. Is it correct for the government to step in and redo these contracts? Are contracts not the root of capitalism?
The government has made it clear that it will do anything they can to get the money back from AIG bonus recipients. Congressmen have even gone so far as saying that they will tax the bonuses 100%. However, the government should not just single out AIG employees. They should also go after Merrill Lynch bonus recipients as well.
Quite frankly, I think that the government does not have the right to stop these bonuses 100%. Perhaps, there are sales people who actually earned these bonuses because of sales revenue that they generated. Not every individual is responsible for the down turn of the company. There are other factors that have caused the collapse of AIG. The fall of Lehman Brothers was certainly something that effected AIG. AIG was forced to pay credit default swaps related to Lehman’s fall.
The bottom line is that there needs to be more regulations to keep financial markets in line. Deregulation, unfortunately, has not worked very well. Rules and regulations need to be set so that this financial crisis never happens again.
Labels: AIG, deregulation, Lehman Brothers, Merrill Lynch
Credit Card / Financial news blog post by Todd Holliday at 7:19 PM 