AIG Bonus Payments Controversy - Media Commentary

Media Commentary

Political commentators and journalists have expressed an equally bipartisan outrage. Commentator Charles Krauthammer said "I would deny them the bonuses if possible. I would be for an exemplary hanging or two. Have it in Times Square, invite Madame Defarge. You borrow a guillotine from the French and we could have a party." Mort Kondracke, another conservative commentator, said "I was going to recommend boiling in oil in Times Square." MSNBC host Rachel Maddow said "Sometime in early 2008, that company signed contracts with its employees that said: 'Even if you cause the company to fail and nearly bring down the worldwide financial system, you will still get a bonus.' I mean, who writes those contracts?" Chuck Todd, also an MSNBC commentator, wrote that "It's a lynch mob out there, and members of Congress seem to be carrying torches." Comedy Central host Jon Stewart said "You know, they say angry populism is all the rage. Literally, it's been building for months, simmering. Our proletarian rage feels so unfocused. If only someone would step up and put on the kick me sign." and "They're not good people." The New Jersey Star-Ledger editorial page read "This band of "best and brightest" just blew a $62 billion hole in the company. What's to retain? Heads should be rolling. Besides, is there really that much cutthroat competition for such an overpaid bunch of losers?"

CNN reporter Carol Costello said "Some political analysts fear public anger has reached a tipping point." Commentator William Kristol wrote "Can capitalism survive the behavior of some capitalists? It's always been an open question. But if capitalism is to survive, shouldn't the Republican party, the party that defends democratic capitalism, be particularly vehement in denouncing its excesses? Isn't this a pretty spectacular one?" Robert Lenzer wrote in Forbes that "The $170 billion bailout of AIG and the $165 million bonus outrage are the result of reckless behavior by AIG and most especially by its egomaniacal former chairman, Maurice "Hank" Greenberg. This supposed paragon of higher finance was just plain playing Russian roulette with his shareholders' money, destroying nearly $200 billion in equity and putting an onerous cost on Uncle Sam and taxpayers." Lenzer accused AIG and Greenberg of "cowboy capitalism", "numbskull ... tomfoolery", and "rotten arrogance." Karim Bardeesy, writing in Slate, compared AIG to Imperial Japan and Nazi Germany, stating "Sometimes the internal workings of a society are so rotten that it takes a complete outsider to come in and change the culture and the cultural production within it. Allies came in and rewrote constitutions for the corrupted societies in Japan and Germany after World War II."

MSNBC host Keith Olbermann said "Certainly, we can screw these guys out of these bonuses the way they screwed us." He has labeled the bonuses "failure bonuses" and "failure rewards." George Washington University law professor Jonathan Turley said "I have some question about fraud here. I mean, these contracts seem to have been written in haste when the company could not possibly have honored them short of a bailout." Turley also said that there is "real social unrest" and that "Congress has finally pushed this country to the breaking point." John Kelso wrote in the Austin American-Statesman that "irate Americans...are about to start chasing these guys around the castle the way the townsfolk with the torches went after Frankenstein" and "The gated communities these suits live in are gated for a reason. For when the revolution starts." He also wrote that AIG "really stands for America Is Gyped. Avarice Is Great, or Actually, It's Graft." Susan Antilla, reporting for Bloomberg, wrote that "The public is angry. They are steaming, off-with-their-heads mad at AIG and other financial companies for the greed and cheating that pushed us into a financial meltdown." and "Americans want to see heads roll." Fred J. Joseph, commissioner of the Colorado division of securities and president of the North American Securities Administrators Association, said "If these people could get their hands on pitchforks, they really would storm the castle."

The Washington Post reported that "Hired guards stood watch outside the suburban Connecticut offices of AIG Financial Products, the division whose exotic derivatives brought the insurance giant to the brink of collapse last year. Inside, death threats and angry letters flooded e-mail inboxes. Irate callers lit up the phone lines. Senior managers submitted their resignations. Some employees didn't show up at all." The paper quoted one anonymous AIG executive as saying "It's a mob effect. It's putting people's lives in danger." and another as saying "It's going to blow up. I have a horrible, horrible, horrible feeling that this is going to end badly." The Associated Press quoted one anonymous AIG executive as saying "It's scary. People are very, very nervous for their security." The AP reported that "police cars that now regularly patrol the well-kept streets" of a neighborhood of AIG executives. AIG has advised employees "to avoid wearing the company logo" and "to travel in pairs at night and park in well-lit areas." Reuters quoted an anonymous senior equity salesman at a bank receiving TARP funds as saying "At this point, it's like the French Revolution -- the mob has got the banks' heads in the guillotine."

NBC Connecticut, through the Freedom of Information Act, obtained information about dozens of death threats that were made to employees of AIG and their families. Some of the people who made the threats left their email addresses and phone numbers, making it much easier for law enforcement officials to identify them.

In an online editorial for the Wall Street Journal, James Taranto speculated that for bonus recipients living in New York City, if the 90% bonus tax passed by the United States House of Representatives is added to the Medicare FICA tax of 1.45%, plus the state and local taxes of 6.85% and 3.648%, respectively, it adds up to a tax rate of 101.948%. This means the individual receiving the bonus will have to paid more than he or she 'received' from the bonus.

In a nationally syndicated opinion column, economist Thomas Sowell claimed that the politicians who did the most to create the situation that led to the use of taxpayer money to fund the bonuses are now the same ones who are complaining the most about the bonuses. Sowell also wrote, "If members of Congress can't be bothered to read the laws they pass, then they have no basis for whipping up lynch mob outrage against people who did read the law and acted within the law."

Mike Cassidy of the San Jose Mercury News wrote that the bonuses bring "a whole new meaning to the phrase 'bank robber.'" He also wrote "These bankers and brokers and investing Svengalis knew exactly how their obscene cash-grabbing orgy would look to the rest of us. They just didn't care."