Finally Some Reason on AIG Bonuses

At last we have someone being reasonable about these bonuses.

“We cannot attract and retain the best and brightest talent to lead and staff” the company “if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he said.

There’s some truth to what Mr. Liddy is saying. Would you want to work at A.I.G.? Sure, maybe for $3 million. But not if you could go somewhere else for even more — or even much less.

That is pretty much what I think in a nutshell. If the Treasury and lawmakers try to clawback this contractually obligated bonus then what is keeping these people working at AIG? I mean some idiot Senators like Charles Grassley want them to commit seppuku over accepting bonus money. No one should told to make a choice of dying or giving back some money.

The strange part is that as a taxpayer I should be burning mad that AIG got bonuses from my tax money. The problem is that I think that retaining the people at AIG who could actually unwind these complex trades is a better use of the money then the 9000 earmarks in the Pork Omnibus or $13 for 95% of Americans. As this article says these guys made the bomb so they might be the only people that could defuse it.

This article also points out that these guys could simply leave the firm and then trade against AIGs book. I'm sure there are a few short side Hedge funds that would love to have former AIG people betting against the CDOs that they helped create. Then they instead of being pushed around by Capital Hill they can actually make tons of money off of their own screw ups instead of trying to fix the problems.