Does anyone else feel like we’re all getting AIG’d? Lately, it seems like every time Uncle Sam opens his wallet to help out some struggling member of the family, that member of the family forgets to say thank-you. Or, worse yet, it’s like catching a trusted friend or relative stealing from you to go out and get high.
For 1,400 employees of a Chillicothe paper mill, there couldn’t be a worse time to become caught up in an international trade fight.
The plant on S. Paint Street generates $338 million in annual sales of carbonless paper, a sizable chunk of which is bought by Mexican customers.
But just a couple of months after the economic slump sparked layoffs of about 50 people there, a new threat has emerged: a 10 percent tariff slapped on imports of U.S. carbonless paper by the government of Mexico. It’s retaliation for Congress’ shutting down a pilot program allowing Mexican trucks to operate in the United States.
The Dispatch further reports that the Mexican carbonless paper tariff is just one of many affecting about $2.4 billion in U.S. commercial activity with Mexico. Just last week, President Barack Obama talked about the $700 million in aid the U.S. is pledging to Mexico this year to help their central government in its fight against drug cartels.
When do we start attaching strings to the public’s money being invested in everything from bank bailouts to foreign countries? Also last week, the Obama Administration announced its support for an aid package to Pakistan that would send $1.5 billion a year there, each year for five years. The same week, we get more confirmation that the Pakistani military intelligence force, ISI, has been aiding and abetting the Taliban and al-Qaeda organizations we’ve been at war with for seven years.
This may sound like the rantings of a guy who wishes we weren’t investing public funds anywhere. Actually, I’m glad we’re amping up our efforts to help the Mexicans, their problems are spilling over into our country. I’m glad we’re willing to help a country like Pakistan, I just don’t want to see more good money go after bad. I want to see accountability and outcomes for the taxpayer money spent here and abroad. I don’t want to give a dime in aid to anyone, any entity or any country who will turn around and bite the hand that feeds. It’s that simple.
My hypersensitivity to government outlays for all manner of bailouts and aid is a direct result of the U.S. financial crisis. If you count “guarantees” made by the Federal Reserve, we are trillions of dollars down the rabbit hole with Wall Street and their ilk. In all of this economic mess can anyone point to one politician or captain of finance who has taken accountability?
If we’re not creating a new program to keep the well-heeled investors on Wall Street whole, we’re shoveling money at countries like Pakistan and Mexico who give us the back of their hand. This makes me sick as I read about U.S. factory workers getting pink slips.
President Obama: Hello, everybody. Please have a seat.
Good evening. Now, before I take questions from the correspondents, I want to give everyone who’s watching tonight an update on the steps we’re taking to move this economy from recession to recovery, and ultimately to prosperity.
Now, it’s important to remember that this crisis didn’t happen overnight and it didn’t result from any one action or decision. It took many years and many failures to lead us here. And it will take many months and many different solutions to lead us out. There are no quick fixes, and there are no silver bullets.
(Source: Board of Governors of the Federal Reserve)
Chairman Ben S. Bernanke
American International Group
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
March 24, 2009
Chairman Frank, Ranking Member Bachus, and other members of the Committee, I appreciate having this opportunity to discuss the Federal Reserve’s involvement with American International Group, Inc. (AIG). In my testimony, I will describe why supporting AIG was a difficult but necessary step to protect our economy and stabilize our financial system. I will also discuss issues related to compensation and note two matters raised by this experience that merit congressional attention.
From the New York Times:
Attorney General Andrew M. Cuomo of New York announced late Monday afternoon that 9 of the top 10 bonus recipients at the American International Group were giving back their bonuses.
He also said 15 of the largest 20 bonus recipients in A.I.G.’s financial products division had agreed to give back the money, for a total that he estimated at about $30 million. “Those bonuses will be returned in full,” Mr. Cuomo said during a conference call with reporters.
The attorney general noted that about 47 percent of $165 million in retention bonuses was awarded to Americans, accounting for nearly $80 million. All told, Mr. Cuomo said, A.I.G. employees have agreed to return about $50 million in bonuses.
Mr. Cuomo acknowledged that some bonus recipients declined to give back bonuses, especially those overseas who are outside the jurisdiction of New York State.
Obama 60 Minutes Interview Part One:
Obama 60 Minutes Interview Part One:
From The Guardian:
Embattled American insurance giant AIG, which is at the centre of a huge political row over bonuses, has paid out far more than previously thought to its executives, it was revealed yesterday.
In shelling out a reported $165m in bonuses to its top staff, AIG had already caused an almost unprecedented wave of anti-corporate anger in the US. The row has rocked President Barack Obama’s administration and prompted new laws in a bid to try to claw back the money.
But now documents obtained by Richard Blumenthal, the attorney general of Connecticut, where AIG has offices, show the firm in fact has in fact paid out $218m in bonuses, 32% more than previously thought. The shocking news is certain to further inflame popular emotions against AIG, the financial sector as a whole and embattled Treasury Secretary Tim Geithner.
If you wonder why Sen. Chris Dodd, D-CT, slipped an amendment into the recently enacted stimulus bill which made it easier for AIG to pay bonuses with your money, just follow AIG’s money. According to the Center for Responsive Politics, Dodd received nearly $104,000 in political contributions from AIG or its employees during the 2008 election cycle. The full list is below. In all, AIG accounted for nearly $650,000 in contributions to federal candidates during the cycle. President Barack Obama topped the list of recipients with Dodd in second place. Graphics below from the Center for Responsive Politics.
List of AIG’s Top Political Money Recipients
Last Weekend Bonus Story, This Weekend AIG Suing the IRS
How many WTF? moments will the American International Group give us by the time the company is once again solvent or is finally taken out behind the barn and put out of its misery?
Last Saturday night, with just enough time to allow the Sunday shows to prepare killer questions for Larry Summers, the AIG bonus story entered the media consciousness. If you’ve been in a cave all week the story goes something like this: Since last September the U.S. government has pumped $170-180 billion into the gaping maw of the world’s largest insurer and biggest loser in the reality show known as the credit default swap market. Uncle Sam now owns 80% of AIG. It was revealed last Saturday that the company has paid $165 million in bonuses to executives and staff of its financial products division. This is the division that has essentially ruined the entire company. The American public is royally pissed off and every politician worth his or her salt is “outraged.”
This from the New York Times tonight:
Interviews with senior Federal Reserve and Treasury officials, as well as members of Congress, leave little doubt that the bonus program was a disaster hiding in plain sight. Mr. Geithner is not the only one who appears not to have understood the populist fury the bonuses would set off.
Career staff officials at the Treasury, Fed and Federal Reserve Bank of New York exchanged e-mail messages about the A.I.G. bonus program as early as late February, according to a person familiar with the matter. A.I.G. itself revealed the bonus plan in regulatory filings last September.
Finally tonight, as promised, a Special Comment on the latest atrocity from the banks. The vast, engorged, gluttonous multi-national corporations. Whose sneezes can be fatal to our jobs. Whose mistakes can turn us into the homeless. Whose accounting errors can be so panoramic that they can make our economy tremble and force us to hand them billions after billions in a blackmail scheme that has come to be known as “bailout.”