Tuesday, March 17, 2009

All AIG, all the time

After hearing the news that some AIG employees will collectively receive $165 million in bonuses this year, Senator Charles Grassley (R-Selfrighteousland) leapt into action by charging the nearest microphone and suggesting that those employees "follow the Japanese example" and either "resign or commit suicide." After a comment like that, Senator, I think we may need to press the Reset button on our Japanese relationship.

The Obama administration, desperate to deflect attention from its rudderless economic ship, affects great outrage at the bonus plan. By the way, bonuses that are contractual obligations entered into before this February 11 are exempted from the Troubled Asset Relief Program's limitations on employee bonuses. In case anyone was wondering, T.A.R.P. was approved by both houses of Congress, and continues to be administered through Timothy Geithner's Treasury Department. I can't think of a group of people less believable when they profess shock, surprise, and outrage at the exemption.

Getting to the bonuses themselves, the numbers are slippery in the extreme. The Associated Press reports that, separate from this round of bonuses, 400 AIG employees have already received $55 million in bonuses. That comes to $137,500 per employee. AP also reports that 50 "top executives" will receive bonuses of about $224,000 each, but doesn't reveal the number of employees who will split the remaining $155 million. A distribution of bonuses last year paid $112 million to over 6400 employees, for an average bonus of under $18,000.

It boggles the mind to think that, in America, a legislator advocates the death penalty for those receiving bonuses that average as little as $18,000. Senator Grassley, maybe you should follow the Japanese example. By that, of course, I mean go to Disneyland, take a lot of photos, then go home.

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