Wall Street hysterics over the AIG bonus bill

[Joanne98]

If there is a positive element to be found in the bonuses recently handed out to American International Group (AIG) executives, it is in further lifting the veil on the character of American society and the ruling class.

AIG is an important factor in the financial crisis that has gripped the American and world economy. The company was one of the principal sellers of credit default swaps—instruments used by banks and investment firms to hedge their mortgage-backed securities and other speculative investments.

With the bursting of the housing and debt bubbles, AIG was unable to make good on its obligations, threatening the solvency of hundreds of counterparties and the multi-trillion-dollar edifice of financial derivatives. The US government intervened to prevent its collapse, handing it some $173 billion in bailout loans and cash, much of which has found its way onto the balance sheets of major banks in the US and internationally.

Earlier this month, the company handed out $165 million in bonuses, including large sums to individuals who themselves helped create the current financial disaster. The House of Representatives, fearful that public anger could make passage of the next stage in the Obama administration's Wall Street bailout more difficult, moved quickly to pass legislation that would impose a 90 percent tax on bonuses to some executives and traders at companies receiving more than $5 billion in government handouts, including AIG. The Senate may consider a similar measure as early as this week.

The bill is limited, applying only to a small group of companies. However, even this measure has evoked a furious response from Wall Street. For the financial elite, there is a fundamental principle at stake, a principle that can brook no violation: its right to the unrestrained accumulation of personal wealth.

The Financial Times reported on Saturday a semi-hysterical environment among the multi-millionaire executives. It quoted the fulminations of unidentified bankers in the US and Europe, including one who declared that the bill is "the most profoundly anti-American thing I've ever seen." One executive insisted that the new tax measure would "send back to the stone age." It is, presumably, the ability of the financial elite to accumulate vast fortunes while millions of people lose their jobs that chiefly characterizes humanity's advance since the invention of metal tools.

http://www.wsws.org/articles/2009/mar2009/pers-m23.shtml

[LSparkle]

1. Not "hysterical" -- it's "bipolar" ... look at today's uptick ... !

It's either up or it's down ... But (like the nursery
rhyme), when it's up, it's REALLY, REALLY up, and
when it's DOWN ... it's AWFUL.

[damntexdem]

2. Good, the more whining, the more hysterics, the more anguish, the better!

Anti-American? No. Anti-greedy-asshole.