AIG bonuses and the rule of law

Monday, March 16, 2009

AIG's bonus payments of $165 million to executives made no one happy. Well, the executives probably didn't mind them. From Ben Bernanke to Lawrence Summers, we're all mad at these guys. But what do we do next? How do we navigate the rule of law versus operating with the knowledge that we're compensating people for bad decisions? For more, The Takeaway talks to our friend Dan Ariely. Dan is the James B. Duke Professor of Behavioral Economics at Duke University and author of Predictably Irrational.

"There's such a huge loss over this thing that the few million dollars here and there don't matter. The reason we care, though, is that it's an outrage."
— Behavioral economics professor Dan Ariely on the AIG bonus payments


Federal Reserve Chairman Ben Bernanke discusses AIG.

Guests:

Dan Ariely

Hosted by:

Farai Chideya

Contributors:

Chelsea Merz and Sitara Nieves

Comments [10]

sjc

AIG = All Ignorant Greed

Mar. 19 2009 02:27 PM
smidely

love it!

Mar. 17 2009 07:59 PM
Ann

Let's publicly post the names and addresses of any AIG executive who gets a bonus then see if they still want it.

Mar. 17 2009 09:59 AM
Patricia

In my disgust with AIG, I would just like to know how to keep my money out of their hands. Is it possible?

Mar. 17 2009 09:48 AM
RJ

How about the labor unions that were blackmailed into effectively tearing up their contracts?????

And how can *anyone* ***possibly*** call these people ***talented***??? If the need for someone to explain these complicated *products*, how about making it a condition of them gettingt *next week's paycheck*?

Putting these things together appears to have been a function of their jobs. If they don't fulfill their job functions--including explaining to their superiors what they are--aren't *they* in violation of their contracts?

Mar. 17 2009 09:48 AM
CVCarlson

By All Means...Pay AIG Execs their bonus!!!

Pay them in AIG Stock only!!!

Mar. 17 2009 09:10 AM
BLOWING SMOKE

The Obama administration is very, very upset about this because they didn't know you would find out!

Everyone has known for over a year that Wall Street gives generous bonuses not based of final performance. They gave billions and thought they could cover the problem with the "drop in the ocean" argument.

So now Obama says, "I'll do everything legally to deter those bonuses."

Isn't is safe to assume that they should have done everything legally B4 they gave the money?

Mar. 17 2009 05:40 AM
smidely

Disagree w the pull quote ("just a few million")

126 million on decent government lawyers would have made sure that the govt didn't get reamed one last time on their ways out the door. In their contracts? For gods sake why?

Especially a few AIG lawyers on the govt payroll would have caught this on hour 1. Sick game they're easily winning.

Mar. 16 2009 06:56 PM
Bob

Ironically, just before this segment you ran a blurb thanking the Starr Foundation as one of The Takeaway's major supporters. C.V. Starr was the founder of A.I.G., and most of the Starr Foundation assets come from AIG "profits" over the years, contributed directly or at the behest of Maurice "Hank" Greenberg, AIG's longtime chief executive and architect of its rapacious investment policies. In the spirit of full disclosure (and before you get too sanctimonious), you might want to acknowledge your show's own indirect benefits from this mess -- or maybe return the money?

Mar. 16 2009 09:34 AM
RJ

What's astonishing is that the contractual "rule of law" somehow doesn't apply when my insurance company says "take it or leave it" when they increase my health insurance premiums 16%. Or the UAW is forced to renegotiate the contracts of tens of thousands of working-class people (their incomes are "too high" compared nonunionized workers--also making cars--unlike those dependent on AIG).

The Big Three auto makers, considered sort of too big to fail--only if they force workers to take income and pension reductions. The companies that depend on the Big Three--and the incomes of their tens of thousands of workers--are only marginally valuable and seem to be dismissable by those who say the Big Three should go bankrupt (thereby *legally* cancelling the UAW contracts), unlike the companies dependent on AIG.

This is grotesquely ugly. Those running AIG should be forced to resign. That should not be impossible.

Mar. 16 2009 08:40 AM

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