BRING BACK THE STOCKS!
I am as disgusted and angry as any American over the AIG bonuses given to a bunch of executives whose performance has been so catastrophically bad that in a just and moral society, they would have been in the stocks rather than laughing all the way to the bank with what amounts to our money. (Actually, it’s our children’s money, but who’s counting?)
It really is too bad we no longer put violators of the moral order in stocks. The Puritans certainly had the right idea, according to Wikpedia:
Public stocks were typically positioned in the most public place available, as public humiliation was a critical aspect of such punishment. Typically, a person condemned to the stocks was subjected to a variety of abuses, ranging from having refuse thrown at them, paddling, and tickling, to whipping of the unprotected feet - bastinado.
I’m sure you can see the efficacy of putting all of these bank big shots in the stocks. That way, we can all have a crack at them. We might even consider taking the show on the road, as it were, and go from city to city, town to town, with executives from AIG, Morgan Stanley, Citigroup, Bank of America, and all the other bail out blue noses whose stupidity and utter disregard of good business practices (limiting risk) got us in this mess. Imagine some of the AIG execs in Central Park with people lined up to throw rotten fruit at them, jeer them, scream at them, perhaps even tickle their feet. Or a few Bank of America execs with their head and feet locked in the stocks set upon the Commons in Boston.
How cathartic would that be? We really wouldn’t hurt them - too much. Mostly, they would be royally humiliated and we, the people, would have the satisfaction of taking out our frustrations and anger on some of the perpetrators of this economic mess we find ourselves in.
But really, why stop at the bank execs? Why focus our anger solely at these rich, mostly white, mostly male goofs? Personally, I’d like to see a few others as fodder for some rotten tomato throwing. We might want to include some Treasury Department bureaucrats who apparently think that not knowing where $300 billion in TARP money has been spent is anything to get very excited about.
NRO’s David Freddoso recounts a hearing last week that featured Neel Kashkari, interim assistant treasury secretary for financial stability, who more or less shrugged his shoulders and said “I dunno” when angry, confused congressmen asked him some very uncomfortable questions about how the TARP money was being spent:
Rep. Jim Jordan (R., Ohio), the conservative ranking member of the subcommittee, noted that the Treasury had sold Congress and the American people on the $700 billion TARP bill last year by insisting that it was absolutely necessary to purchase toxic mortgage-based assets from key institutions.
But with $300 billion of TARP out the door already, Jordan asked, “Am I correct in saying that not one mortgage-backed security has been purchased?”
“Yes, sir,” said Kashkari. The program for purchasing MBSs, he explained, is still being developed. Treasury has so far spent $300 billion to treat the symptoms of the problem and prevent a complete collapse.
In their questioning, some members revealed an ignorance of the subject matter, but in many cases they still had a point. One by one, they called for increased government micromanagement of TARP-aided businesses. Reps. Dennis Kucinich (D., Ohio) and Dan Burton (R., Ind.) joined in outrage over the fact that Citigroup was sill doing overseas business, despite the bailout. “How does [an $8] billion dollar financing deal to Dubai ease the liquidity crisis in the U.S.A.?” Kucinich asked, referring to one of the loans Citi has made since taking $45 billion in government funds.
Must — or should — Citi stop conducting international business as a condition of its bailout? It seems unreasonable, especially if the foreign business is an integral part of the company’s normal operations. But if the TARP money is supposed to be aiding domestic liquidity, Kucinich and Burton still have a point. Should Citi and Bank of America (which provided $7 billion in financing for the China Construction Bank Company) and JPMorgan (which invested $1 billion in an Indian venture) be taking billions from TARP, then making new loans abroad?
It’s a good question and Kashkari gave the standard, free market response:
“With investments in almost 500 institutions, and hundreds more in the pipeline, we must ensure that our investments are targeted at stabilizing the economy, but we must also take great care not to try to micromanage recipient institutions. However well-intended, government officials are not positioned to make better commercial decisions than lenders in our communities.”
The problem, as Freddoso points out, is that these institutions are hardly operating in a free market environment. As conservatives have been saying for months, if the banks accept government money, they lose freedom of action and in effect, become tools of the state. The problem is that bank executives still think they are operating in a capitalist society. How rude the shock to AIG when the country went bonkers over what they see as the normal business practice of giving out end of the year bonuses? The bank execs are still operating under the old rules - B.A. (Before Obama).
Perhaps then, Mr. Kashkari doesn’t belong in the stocks. Maybe we could dress him up as a clown and put him in a dunk tank, three throws for a dollar.
But my main candidates for the stock treatment must go to those posturing, nauseating, hypocritical Members of Congress whose own ethics problems make them poor candidates to rail against the excesses of bank executives. Barney Frank will apparently hold hearings on the bonus issue. This should be excellent political theater as one of the Congressional questioners - Maxine Waters - has her own problems with protecting executives at banks that got bail out money.
Putting Waters and Frank in the stocks may be too good for them. Perhaps we can pillory the liberal Democrats as a warning to other lawmakers that being a hypocrite actually can cost you.
There is no shortage of potential candidates for the stocks in this business. How about the CNBC cheerleaders who rah-rahed the economy even when it was tanking? And there are a few Obama White House figures - press secretary Robert Gibbs comes to mind - who I personally would love to give a healthy thwack across the soles of his feet with a two by four.
And the President?
Joining a wave of public anger, President Barack Obama blistered insurance giant AIG for “recklessness and greed” Monday and pledged to try to block it from handing its executives $165 million in bonuses after taking billions in federal bailout money. “How do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama asked. “This isn’t just a matter of dollars and cents. It’s about our fundamental values.”
Tom Maguire responds:
It’s about our fundamental values? Which ones? Surely not “a deal is a deal.” These bonuses have been quietly kicked around for a while ($55 million was paid on this plan in December - did everyone at Treasury forget?), so I guess the fundamental value in play with Obama is “When the crowd stands up and boos its time to stand up and boo.” Yeah, that’s leadership.
IF WE’RE STUPID ENOUGH TO TAKE OBAMA SERIOUSLY WE ARE STUPID ENOUGH TO TAKE THIS SERIOUSLY:
Maguire has a point. The question must be “Who is minding the store?” more than whether AIG should have given these bonuses in the first place. The company showed lousy PR sense and a tone deafness with regard to how this action would appear to taxpayers. But they are no more or less guilty than the rest of the bankers who took us down this path to economic meltdown. And besides, the $165 million in bonuses represents about .001 percent of the bail out money received by AIG so far.
And what about the president’s analysis that what happened was the result of “recklessness and greed?” Is the government now to dictate what is “acceptable risk” and what is “reckless?” Is the desire to make a lot of money now to be criminalized? And by deflecting attention away from his administration’s failings by focusing on the AIG bonuses, is the Obama administration starting a pogrom against capitalists to keep public anger focused on “big business” and “the rich” and not on the lack of a plan to deal with the financial problems that worsen by the week?
The Washington Post thinks this will cost Obama political capital. I’m not so sure. I think this entire issue has been a godsend for Obama in that it redirects the focus from his administration’s incompetence in dealing with this crisis to something the average voter can understand - rich people getting richer at taxpayer expense. With Republicans jumping on the AIG bashing bandwagon, the issue becomes a bi-partisan free for all that makes people forget that Obama has not named any top Treasury officials for his administration yet, that he has not come up with a plan to stabilize the banks (despite promising 6 weeks ago that a plan was already developed), that his Treasury Secretary is a bust, that his economic team is not on the same page when it comes to analyzing the strength of the economy, and that his press secretary continues to amaze all of us with his utter lack of candor and confused - even ignorant - explanations for Obama’s non-actions on the economy.
Yes, it’s a shame we’ve abandoned using the stocks to publicly humiliate and chastize violators of the moral order. But judging by how some Congressmen and Administration officials have been demogouging the AIG bonus issue, ’tis a pity we’ve also forgotten about the grand old American tradition of tar and feathering.
http://cannonfire.blogspot.com/2008/11/when-winds-of-finance-schiff.html
Comment by the Fly-Man — 3/17/2009 @ 8:41 am
Here’s what I came away from this post with:
1. Democrats are stupid hypocrite losers.
2. Republicans are decent folk with tough problems.
3. Bankers are among the smartest human beings on the planet because while failing at capitalism, they manage to win big at banking socialism and we should all respect that.
I love the fact that banker bonuses are tied to nothing. Destroy the bank and economy? Here’s your bonus. Oh, wait, you mean the bank can’t afford the bonus? Well, we’ll just hold the federal government hostage till they pay up. Then once we get our bounuses, we’ll quit.
Nothing like free taxpayer dollars. Financial terrorism. It’s the new American way.
1. True
2. Wha? Who? WTF? Get your glasses fixed.
3. All that after I recommended putting them in the stocks and throwing rotten fruit at them?
You really are an idiot, aren’t you?
ed.
Comment by Chuck Tucson — 3/17/2009 @ 9:52 am
The bonuses were actually written into law by Sen. Dodd. The outrage over bonuses given by a private company to private employees is none of our business — except for the fact that they received government money, which they never should have received.
Comment by Sal — 3/17/2009 @ 10:32 am
So the Republicans — Bush and Paulson — who actually demanded the TARP funds, and demanded this complete lack of accountability because gosh there was just no time — they don’t make the list. No, Maxine Waters is responsible.
Yeah. We’re going to buy that.
I like the idea of public stocks. So here’s a thought: let’s put Phil Gramm in there and Alan Greenspan and President Bush and Hank Paulson. Absolutely some Democrats, too, but your list, Rick, is utter partisan b.s.
Comment by michael reynolds — 3/17/2009 @ 10:32 am
So the Republicans — Bush and Paulson — who actually demanded the TARP funds, and demanded this complete lack of accountability because gosh there was just no time — they don’t make the list. No, Maxine Waters is responsible.
Yeah. We’re going to buy that.
I like the idea of public stocks. So here’s a thought: let’s put Phil Gramm in there and Alan Greenspan and President Bush and Hank Paulson. Absolutely some Democrats, too, but your list, Rick, is utter partisan b.s.
Comment by michael reynolds — 3/17/2009 @ 10:32 am
The bonuses make me angry on two levels. The first is the obvious one. They shouldn’t have happened. The second is a political one, in that it exposes how utterly reckless the Obama Administration has been in forking over these bailouts with fews strings attached. I believe this president had his “Iraq/Katrina” combo in the first month of his Administration.
As noted above, the Bush Administration started down this road. Yet it was on its way out. So that gives no one a pass who has expanded this psychotic policy.
The Frank hearing will be a study in cognitive dissonance, true enough, but perhaps enough crap will splatter so that the guilty will be smeared with shit on both sides of the table.
Comment by jackson1234 — 3/17/2009 @ 10:49 am
Society has changed since the time of the Puritans, anyone locked into stocks in this day and age risks a lot more than just public humiliation.
Bonuses don’t bother me. Would I take a retroactive pay cut as a condition of a government bailout? It would be a grave concern to me if my pay had been previously negotiated and agreed upon and I did the work. And I wouldn’t appreciate everyone and their mother telling me, not how THEY could have done better than I did, but just, “You suck!”
That they didn’t prevent the economy from collapsing is hardly their fault, if you ask me.
Didn’t realize protectionism could be applied to banks too … interesting. It would be helpful if we knew what percent of banks’ income is from overseas business.
Comment by DoorHold — 3/17/2009 @ 11:02 am
On the one hand, bonuses are generally given out for reaching sales goals, productivity or profit improvements, or similar achievements. So one has to wonder how these goals could have been met in a company that needed two multi billion dollar bailouts to survive.
On the other hand, AIG is a huge company with more than 10,000 employees. It is conceivable that the part of this company that invested in or insured sub prime mortgages is suffering very large losses, while at the same time, some executives in it’s auto, home, and life insurnace divisions may have, in fact, achieved the sales goals set for them in 2008, and deserve their promised bonuses.
Since the US government is now an 80% owner of AIG, it certainly has the right to ask for an explanation, although it does not have the right to alter contracts between employer and employee that were created before they had a stake in the company.
And apparently Chris Dodd made sure that it couldn’t, when he wrote an amendment attached to the AIG bailout that specifically exempted executive bonuses from any compensation limits imposed the government. Now, he is trying to rewrite that clause after the fact.
Comment by Bob — 3/17/2009 @ 11:13 am
Yup- the bonuses are quite crappy, however, I find it at least tolerable compared to the $3.6 trillion dollar spending spree debt that Obama is about to stick us all with! “Line by Line” scrutiny? Really? Seems Obama has short term memory loss! “Transparency”? Really? Did he mean it would be ‘transparent AFTER he rushes the spending spree bills through before anyone has a chance to complain about the myriad waste spending?
Did ya hear the one about the Southern Gov that wants to refuse accepting a couple of billion from the ’stimulus’? The dems are so furious that they are about to launch an all out character assassination campaign on air against the good Gov. for refusing to accept government $$. Swell huh? Great idea- let’s punish those who want to actually show an odicum of fiscal responsibility with OUR $$!
Comment by CottShop — 3/17/2009 @ 11:22 am
The whole piece felt like sarcasm. As in, this is how capitalism works, so stop moaning and get over it American Public.
The banking executives are heroes of the American dream, which is to make money. It will be hilarious watching them get paid, because it’s in their contracts. All while watching the incompetent government sit and flounder as the growing lower class whines endlessly about the rich getting richer.
Comment by Chuck Tucson — 3/17/2009 @ 11:38 am
Wow, re-reading the piece more carefully a second time and I see the sarcasm. Sorry, Rick, for missing it the first time.
Brilliant, just brilliant.
Comment by Sal — 3/17/2009 @ 12:57 pm
Rick,
Excellent analysis. If we could only get a Republican President and Congress our problems will be solved.
We should start with a repeal of the 22nd amendment. If presidential term limits was not an issue we could still have Bush and Cheney, and we would not be in this mess.
We could then focus our energy on getting more Republican in the Executive Branch. Who was that guy who worked so close with Abromoff? We could start by getting him back. What about that Terry Schiavo Pro Life guy? I think his name is Frist. Is he still in Congress? If not, the conservative movers and shakers need to get on the phone. We need him back.
Thanks Rick. You do a great job of pointing out the obvious that (for some reason) others can’t see. If we can get Republicans running the Executive and Legislative branches of government, then both capitalism and America will be fixed.
Bravo!!
Where do I say that? Why do idiots like you insist on puttingt words in my mouth? Is it that you can’t read the ones that are in front of your fucking face? Must be. Too damn fucking stupid to read the words as they are written and instead, subsitutute what you think I should have written or just any old bullshit at all.
I did not say, imply, wish for, hope for, intimate, or hint at the idea that Republicans could do a better job in either the executive or legislative branches. Only someone with the mind of a two year old would have come away after reading that piece thinking that this is what I was saying, what I was advocating.
Grow up or get out.
ed.
Comment by bsjones — 3/17/2009 @ 2:32 pm
I think you’re right about it being a godsend to divert attention from what he’s up to.
Since AIG exec’s gave millions to Dems, it shows how willing he is to lose their donations since he evidently feels the entire economy is his anyway to do with as he wishes.
Comment by cedarhill — 3/17/2009 @ 2:43 pm
Senator Dodd didn’t write those bonuses into law. Thats rightwing spin, someone show me the PROOF. Theres enough blame to go around for this mess, lies about Dodd don’t help anything. I say let AIG fail, or be broken up.
Comment by Joe — 3/17/2009 @ 7:56 pm
Does anyone here wonder why it was the gop was voted out of power? If Obama fails his party will get a whipping in 2010 and Caribou Barbie will be president in 2012. But for right now we Democrats control everything and we will govern the way we see fit. Obama isn’t to blame for AIG’s blunders, that was laid on his lap. Bush left us in a mess, so the gop can either help right the country or stfu.
Comment by Joe — 3/17/2009 @ 8:05 pm
I’d give everything I own to see O’Dumbo in stocks with Barney Frank and Dodd flanking him. Then you could start with the real criminals in the democrat party.
Joe said a mouthful of BS. O’Dumbo and his criminal secretary of the treasury have been working on the bailout since the middle of last year. They set it up and the democrat controlled congress passed it. GWB was guilty of requesting a large package but wised up and only let half of it out. O’Dumbo requested the other half. Chris Dodd put the protection of the criminals getting the bonus money for destroying the country in the bill. Remember the 1,000+ pages no one read and all democrats voted for, just add three traitors from the senate republicans and you have the targets for the first major lynching party to come soon.
Comment by Scrapiron — 3/17/2009 @ 10:27 pm
I sometimes wonder if we really understand who is running the show. Democrats this, Republicans that; however, in the end both of them are massively outgunned by the financial elite. Yes, I believe still, they just didn’t change the outwards appearance fast enough. In the meantime, we the people are busy fussing and fighting of whose to blame while they move their assets elsewhere. Yes well who is to blame? Unfortunately, in my experience human nature is easily corruptible, not necessarily in a direct way; me as likely as you, Republicans as likely as Democrats. You can’t really trace it back to one event and when Liberals say it’s because we went to bed with the devil they are right and when we say our country lost the moral compass because of moral relativism due to liberal ‘diversity’ we are right too.
Perhaps though, something good will come out of it all, a needed catharsis, a readjustment of values a comeback of (virtual?) stocks.
Comment by funny man — 3/17/2009 @ 11:10 pm
As it turns out, these were retention bonuses.
Last year, AIG seeing it was in dire straits due to it’s sub prime mortgage involvement, began divesting and reorganizing sections of it’s business to save money. Part of these changes involved the loss of many executive level positions.
In order to make the reorganization happen as smoothly as possible, some of these execs were asked to stay on and use their experience and knowledge of the inner workings of these departments to guide the process. Knowing they would lose their jobs when it was all done, AIG offered them these bonuses to keep them from just walking out.
That said, I love the idea of the stocks for punishment for a whole range of crimes. I suspect that day after day of public humiliation would do wonders for the recidivism rate.
Comment by Bob — 3/18/2009 @ 9:40 am
Bob, you seem to be the only one posting here (including our host) who is intersted in sorting out the facts of the AIG bonuses before criticizing them.
As far as Dodd is concerned, I don’t know if he wrote the amendment exempting bonuses, but he sure passed the bill on to the Senate and voted on it. Obama signed it. Did no one read it? Typical of our society today, no one is responsible for their own actions.
And the stocks for immoral behavior… that sounds like a truly “shovel ready” project that could be immediately assimilated into our Dear Leader’s stimulus package. The trouble is, how do we make them “green” and are these jobs that Americans will do? We are gonna need lots of ‘em.
Comment by cdor — 3/18/2009 @ 10:21 am
[[Does anyone here wonder why it was the gop was voted out of power? ]]
Nope- The American people have lost hteir sense of pride- plain and simple- We were ocne a nation of ‘do it yourselfers’, but have slowly but surely devolved into a nation of ‘Gimme what I Deserve! Now!” We as a nation wanted our mommy, and Obama promissed to be our Mommy- paying off our debts, giving us free healthcare, making sure noone bullies us etc etc etc. This appealed to our sense of entitlement, and THAT is why the GOP lost- America wanted their mommy, and they were willing to sacrifice hteir core values in order to secure this ’security’!
The GOP is just fine, and it’s my belief that America will wake up, realize they have been duped, and get back to hte basics that instilled a sense of pride and accomplishment- EVERY socialist society goes htrough this sense of entitlement, then when hte money runs out, and it becomes clear the system is broken, there is always a swing back to core values- I just hope it doesn’t take too long for us to realize just how devestating such income redistribution really is, and hopefully the next GOP candidate will REALLY stress just how important self respect and self accomplishment really are! This is what was missing in the elections- a sensible voice that outlined just how devestating that selling our souls for the sake of a quick buck really is. We NEED a voice i nthe wilderness to snap us out of our ‘utopian comma’ and even to shame us back into reality so that WE- the people, start taking care of ourselves the way WE the people are supposed to- not with our hands outstretched hoping to pick the pockets of ‘the rich’, but with our faces to the wind, our hands to the plow, breaking the ground we’ve let go to waste once again.
Comment by CottShop — 3/18/2009 @ 11:31 am
This AIG bonus thing is a distraction to keep the citizenry from asking where the really big money went.
Comment by Chuck Tucson — 3/18/2009 @ 2:15 pm
Chuck is right. The AIG bonuses are lunch money in the grand scheme of things. But it’s OUR lunch money now, so we have a right to be concerned.
And Funny Man is right.
The oil barons and world bankers have been running the show since 1913. Obama may have had high hopes for his own plans while running for office, but he is singing their tune now. Next step - a one world currency. You have heard it mentioned already , but come April and the next G8 meeting, this will be proposed as the solution to the world’s economic problems. Why do you think he has been such a doomsayer until the press (who hasn’t a clue) called him on it. They need the world to think that nothing can solve this economic crisis, not even the wonderful porkulis package, until the world bankers step in and offer their survival plan.
The world is about to undergo a dramatic change if they get their way. I’m not sure what can be done to stop it. And I’m not sure it needs to be stopped. But I would sure like to have the time consider it more. Right now my head is spinning with the speed at which things are happening, and like the rest of us, I have my daily life to be concerned about and have not had the chance to analyze the possible consequences thoroughly. The only thing that might stand in the financial elite’s way is the Supreme Court. We’ll see how they handle the Congress and Obama’s attempt to impose a 95% tax on the AIG exec’s bonuses. If they crumble under that, America as we know it today, and the constitution, are pretty much in tatters.
Then again, I could just be some crazy conspiracy theorist
Bob
Comment by Bob — 3/18/2009 @ 8:47 pm
Chuck- bingo- it really is chump change compared to the pork in the ’stimulus’ bills. Yeah, $165 million is nothing to sneeze at, but then again, these are corporate execs who ‘earned’ that money, while the ’stimulus’ bill is simply taking money from one pocket- ours, and depositing it in the other pocket, the governments. Reading the statements by the AIG chief today, the company apparently is trying to cut losses, bolster profits, and pay the loans back, but hits isn’t going to happen overnight. I’m no fan of AIG, but they are at least trying in my opinion, and While the execs probably should forego their bonuses hits year, or at least take a cut, at least they are working and ‘earning’ while they are trying to pay back the loan- our gov simply wants to pilfer money without doing any work (Unless you call scheming to steal bonuses and people’s money through higher taxes, ‘work’).
I’d personally rather see the execs keep at least some of their bonuses, and be held to higher standards for performance to give them the incentive to do the absolute best they can for the company during hits downturn for their company then to see them give back a psaltery $165 million and be bitter and not work as hard as a result, but the government is eying that $165 million as though it were their last coins in the piggy bank, and they mistakenly think this ’show’ of ‘force’ will appease the country and make it look as though they are proactively ‘watching out for us’ all while robbing us of hundreds of billions of dollars to fund pet projects. Insanity Squared!
Comment by CottShop — 3/19/2009 @ 10:00 am
Who gave them the money in the first place. Put Harry Reid in the stocks
Comment by Bob — 3/21/2009 @ 11:24 pm