Sweet Justice? House Votes To Recoup Bonuses

WOAH more big news today as the U.S. House of representatives passed a bill to recoup bonuses paid to AIG. Due to the public outrage that AIG paid $165M in bonuses for certain executives, the Obama administration and Democratic congress moved quickly to do something about it.

The House proposal's hefty tax provision would apply to executives with incomes over $250,000 who work for companies that get at least $5 billion in federal aid. That could include others besides AIG, such as mortgage financing company Fannie Mae.

"The whole idea that they should be rewarded millions of dollars is repugnant to everything that decent people believe in," said Representative Charlie Rangel, the Democratic chairman of the tax-writing Ways and Means Committee.

In a measure of the widespread outrage over bonuses, small crowds of protesters marched in cities across the United States to denounce the idea that AIG employees who helped push the insurer to the brink of collapse should be rewarded for it.

Sound like sweet justice? Not really. If you dig deeper:

1) A lot of firms were forced to take money from the Fed, even though they didn't want it. In fact, some are publicly saying they want to give the money back. Some of these same firms also came clean and did not give their executives ridiculous bonuses. But the Fed wants to have authority to look around their books to see what the companies are doing. Sounds awfully fishy to me. Why would the Fed want its fingers in so many pies?

2) The taxes apply to any family earning over 250k working at a bailed out firm. So if you worked hard in college, maybe even got an MBA and earned a job at a top wall street firm or any other top bailed out company, you've been forced to endure layoffs, endure even longer hours and now significantly less pay to boot. This was meant to punish the greedy executives, not necessarily all the smart hard working wall street kids just following orders and doing their jobs.

Who do you really think this hits harder:
The executive who already made millions the past few years
OR
The dual income middle management family who works hard and makes $251k a year?

I guess we found our scapegoats... everyone at the bailed out firms and guys like Madoff. I guess the people who passed the laws who got us here and the Fed whose balance sheet has increased by TRILLIONS are innocent bystanders.

People Who Live In Glass Houses Should Not Throw Stones

Source: http://news.yahoo.com/s/nm/20090320/bs_nm/us_financial_aig_17