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Post Prints Blatantly Untrue Statement About AIG's Use of Taxpayer Dollars
In an article about how AIG is making large payments to its top executives, the Washington Post included the statement from AIG spokesman Nicholas Ashooh, that "this is not taxpayers' money they are going to run away with."
It would have been helpful to tell readers that Mr. Ashooh's statement is not true. AIG has already borrowed more than $100 billion from taxpayers. The more money that it pays to its executives in various forms, the less it will have to pay back. This is the case even if it has segregated some portion of its assets for deferred compensation since it will have to replenish this pool more quickly if it spends more of it presently.
Many Post readers may wrongly believe Mr. Ashooh's claim and not realize that they are paying for AIG's generous deferred compensation packages.
--Dean Baker
COMMENTS (11)
The Post has tumbled to the "different dollars" argument to support excessive executive compensation.
But Dean, the real issue here is our ineffective Congress.
If one Committee were to subpoena several of the executives who have done paid so well with bailout money and ask those executives, in public and in front of the TV cameras, to justify their compensation, the foolishness of Mr. Ashooh's argument would be so clearly demonstrated that it would not be repeated in public.
If that same Committee were to subpoena the board of AIG and its CEO and CFO on the following day and ask those folks to explain, in public and in front of TV cameras, just why they felt it appropriate to use the taxpayers money for such compensation, excessive executive compensation at AIG would no longer be an issue.
The Post is just reporting on business as usual inside the Beltway.
Posted by: Ron Alley | November 15, 2008 4:05 AM
Ron Alley's, point is perfect. Of course Ed Liddy (a prominent Republican) would not want the government to inflect such a socialistic viewpoint upon the annual "cake-eating" blood rite of his mid and upper managerial fat layers. The position of Mr. Ashooh is typical masturbatory book keeping semantics.
It's not like banks make business's, and people for that matter, extend themselves to ridiculous lengths personally and publicly on several levels in order to get financing. If we are there financiers, then this would in NO WAY be an unreasonable request. Further stipulations and accountability must be put in place, if this is to continue.
This makes me throw up in my mouth when I see this type of financial legitimization.
At least everyone's job at AIG is safe! http://www.reuters.com/article/mergersNews/idUSWEN135220070927
OOPS!
Doesn't make sense?
Keep in mind, these are the same people that call a 3% tax increase socialism.
This is worse than loaning money to a junky.
Insurance is nothing but a legalized protection racket to begin with.
Posted by: Pat Dundon | November 15, 2008 5:48 AM
Isn't money fungible?
Posted by: Shag from Brookline | November 15, 2008 7:16 AM
"The more money that it pays to its executives in various forms, the less it will have to pay back."
Can someone explicate this sentence and suggest possible remedies?
Posted by: Rich | November 15, 2008 9:06 AM
Rich:
I think Dr. Baker means the more money AIG pays to its executives "the less money it will have WITH WHICH to pay back the taxpayers."
Posted by: Ethan | November 15, 2008 11:31 AM
Congress isn't 'ineffective.'
It's doing exactly as it has been instructed to do.
Led by...The President-elect!
Posted by: woody | November 15, 2008 11:37 AM
U got robbed. They are dividing up the loot. U don't get any back. Why cry about which robber gets a bigger cut than the other thieves. If it bothers U which thief gets more than the others then I suggest U put up some sort of struggle the next time U get robbed.
Posted by: Mike Meyer | November 15, 2008 11:52 AM
These folks don't seem to realize that they're on welfare and being on welfare means short rations--no bagels in the break room, no junkets to Hawaii, and no bonuses for the people who brought this on us. They seem to think they are doing us a favor by taking our money and passing it out to themselves.
Posted by: PeonInChief | November 15, 2008 12:29 PM
Obviously they have an emergency secret stash of money that they hadn't told anyone about. That's the pile of money they're using for this.
Posted by: Worried Dad | November 16, 2008 3:27 AM
Check out the terrific Flash animation titled Social Media Guns on AIG, produced by VizEdu.
http://vizedu.com/2008/11/social-media-guns-on-aig/
thanks
Posted by: Monika | November 17, 2008 1:07 AM
what in the heck IS aig, anyway?
i read they were founded in shanghai back in the opium days, have spooky connections, etc.
insurance & re-insurance - why would anyone need *re* insurance?
why do insurers have to be insured?
seems like everything circles around & it always comes down to: the peons pay, the bosses walk away.
Posted by: hb | November 17, 2008 6:04 PM