Somebody Set Up Us the Bailout

Somebody Set Up Us the Bailout

Somebody Set Up Us the Bailout

by Steve Napierski to Comics

The United States Government decides to give loans to the struggling insurance corporation American International Group (AIG). First in the amount of $85 billion, then increased to $152 billion and now it stands at $170 billion USD. Then, AIG took $165 million USD from this loan and gave it as bonuses to its executives. After that happened, tax payers got outraged. Upset with what AIG did they demanded that the government do something to resolve this situation. So, the House of Representatives quickly passed a bill that would virtually tax these bonuses out of existence by taxing them at 90% rate. And here we are.

So why am I talking politics on a gaming comic? Because this situation really pisses me off.

Look, you may not like what AIG did with the loan they received, but it was a loan. When you receive a business loan from a bank, the bank does not specify you what you can and can’t do with every nickel and dime of it. There may be guidelines or a certain direction, but mostly they just want you to pay the money back. And hell, you may not like AIG’s decision, but it was their decision to make.

Regardless, that’s not what’s pissing me off. It’s this bill that the House of Representatives passed that’s got my all riled up. Why? Because it’s unconstitutional and they should know better. The United State’s Constitution directly says, “No Bill of Attainder or ex post facto Law shall be passed.” (Article 1, Sec 9.) Which means that legislation is prohibited from punishing or penalizing a specific person or group without trial. And that exactly what this bill is doing.

Now, I know that if this bill is ever seen before the Supreme Court it will be dismissed (they’ve actually read the Constitution before). But it shouldn’t have to. It should have never reached this. And if the government didn’t want this money going to bonuses, they should have specified that in the loan before they gave it to AIG.

So if you really what to blame someone, blame the government. They dropped the ball on this one and they’re the ones back-pedaling with their tails between their legs.

Oh, and I used President Obama in the comic because it’s his party that’s in control of the House and he is the most recognizable/important Democrat in the world as well. Also, a lot of you just wouldn’t get it if Nancy Pelosi was in the comic instead. You’d be all like, “Who’s that crusty old woman?” And I’d say, “Don’t you recognize your momma?” And then you’d be like, “Oh, no he didn’t…” And then, I wouldn’t respond because I was too busy having sex with your mom. See, this just works out better this way.

Update: A lot of you have been commenting about the large sum of money going to the bonuses. Let me put it in perspective a little. $165 million is less that 1/10 of 1% (.097) of $170 billion. That would be like you giving someone a hundred dollar bill and they take a dime of it to buy some nasty hard candy.

One other thing people may not have taken into account is that AIG might be contractually obligated to give their employees these bonuses. And if they chose not to pay them, this might have resulted in class action lawsuit that resulted in AIG paying even more money in the end.

Discussion (26)¬

  1. Joe
    Joe says:
    March 24, 2009 at 9:38 pm #

    Canuck, that's not the way contractual bonuses work. A good comparison would be guaranteed contracts in professional sports (sans-NFL, which doesn't have guaranteed money). These legally binding guaranteed contracts guarantee salaries to players, regardless of their performance, such that even if a player was injured and unable to play, they still get their money. It's written that way in the collective bargaining agreements, much the same way that the AIG bonuses were established and legally binding.

    The fact that the American mob has forced AIG to request those bonuses returned, now opens AIG to legal pursuit, which will likely happen once the outrage and the mob has died down, meaning that AIG will likely pay more in the end.

  2. Gato
    Gato says:
    March 24, 2009 at 11:25 pm #

    Haha!

  3. Jason
    Jason says:
    March 24, 2009 at 11:03 pm #

    If you did your job so poorly that you needed a bailout from the government to stay in business, you have no business getting a bonus… hell, I'd have trouble seeing justification for you getting a PAYCHECK. People generally don't get bonuses for epic failure; that only flew in the economic lala-land in which Dubya and his buddies lived.

    See, the reason your average American is pissed about this is that a substantial number of us AREN'T getting bonuses in the current climate. We aren't getting raises. A lot of people aren't getting money at all, because their job wasn't sufficiently important (unlike someone who takes meetings and makes bad investment decisions all day with other people's money; important job, that!). For these people to fail at their job and still get bonuses would be irritating, but endurable… if it was just the company's money. But it's not; it's OUR money, and that makes it incomprehensible. It's manifestly irresponsible to be in the red and still give out bonuses, and especially when you can't afford said bonuses out of your own resources. Dividends aren't paid when you don't make a profit; neither should bonuses.

    And frankly, I don't give a flying fig if AIG ends up having to pay a bunch a few years down the road once litigation and appeal after appeal is done. They failed; they should have to deal with that fact. Their creditors get paid first (and in this case, their creditors are the American taxpayer), and THEN these moneygrubbing do-nothings can have the dregs. Until then, they can sit and spin.

  4. BigLord
    BigLord says:
    March 25, 2009 at 12:39 am #

    WHAT YOU SAY

  5. Canuck
    Canuck says:
    March 25, 2009 at 12:58 am #

    Bonuses (Boni?) are just that; a bonus, and shouldn’t be a contractual obligation. Seems to me these people should have lost their bonus because they didn’t do a good job.

  6. Richard Kirsch
    Richard Kirsch says:
    March 25, 2009 at 2:27 am #

    Well, I think the good Doctor summed it up best when he said: “The very powerful and the very stupid have one thing in common. Instead of altering their views to fit the facts, they alter the facts to fit their views…which can be very uncomfortable if you happen to be one of the facts that needs altering.” I’ll also have to go with “Just because Nancy Pelosi has constituents who like to take it up the bum doesn’t mean the rest of us have to as well.” Book of Richard Ch 2 Verse 1.

  7. Joe
    Joe says:
    March 25, 2009 at 2:33 am #

    Utterly impressed that you took this issue on, and did so tastefully and with a dash of humor to help the reality go down easy.

    The American people are hopefully growing tired of both the Executive and Legislative branches pushing and prodding the boundary lines of the systems of checks and balances that has kept our government in check for over 200 years.

    Personally, I think that every last member of Congress that voted yes to the Bill of Attainder should be ousted for direct violations of the Constitution, but that’s just me.

  8. Sceadu
    Sceadu says:
    March 25, 2009 at 2:38 am #

    It has been announced that Obama might not sign it, cause he’s worried that it’s not technically constitutional. If he doesn’t this comic will look really stupid, even if your intentions arn’t really defeated by the turn of events.

  9. hctomorrow
    hctomorrow says:
    March 25, 2009 at 4:25 am #

    Actually, the ex post facto thing only applies to criminal law, not civil. Retroactive tax changes are made all the time.

    For more information, see: http://lefarkins.blogspot.com/2009/03/constitution-did-not-enact-mr-howard.html

  10. Red
    Red says:
    March 25, 2009 at 7:01 am #

    Ah, I thought it was billions in bonuses, not millions.

    Really, what ticks me off is that they gave the money to the CEOs and the people who run AIG, and in gross amounts too. Why not start from the bottom up, with the employees? I think if AIG had actually done that, the American people would be like, “Hey, those AIG people sure know what they’re doing. Let’s use them!” And their employees would be grateful, and life would be wonderful.

  11. Paolo
    Paolo says:
    March 25, 2009 at 8:42 am #

    The reason these executives have these huge bonuses is because Congress played class warfare and put salary caps years earlier. To get around it and make it still legal for these employees to be making the same amount of money they would on salary, they just pay it in bonuses. That is why companies are obligated to pay them regardless of performance.

    This is a situation where the tail wags the dog – Congress and the Media is just playing is with class warfare.

    Now why would this sector of our economy attract more competent people if Congress targets specific people in specific companies with punitive retroactive taxes just so their constituency feels better that someone rich is suffering in a bad economy? Already there is talk of workers worried for their jobs and salaries because now an awful precedent has been set by Congress that they can target and break contracts between individuals and corporations.

  12. Richard Kirsch
    Richard Kirsch says:
    March 25, 2009 at 9:22 am #

    “Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others.” -Ayn Rand

    “You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that, my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.” -Dr. Adrian Pierce Rogers

    Were truer words ever said?

  13. SG
    SG says:
    March 25, 2009 at 11:28 am #

    I’m sorry, but I still disagree with AIG giving the bonuses to their employees. I’m sure if it was in their contract that they had to give bonuses, then they would state that from the beginning. I know that if I lent a friend some money, we’ll say $5000 to get him/her out of debt from credit cards, bills, etc., and then I found out they spent some of that money on a new tv or a new stereo or something, I would be pissed. Wouldn’t you? I don’t see much of a difference in this situation. The only other thing I could see is if part of that debt was the bonuses to their employees, but again that is something that should have been stated at the beginning in which it wasn’t. It just smells of shenanigans to me :P

  14. Sceadu
    Sceadu says:
    March 25, 2009 at 12:24 pm #

    Richard did you really just quote Ayn Rand? >.<

    Anyway she’s wrong. If you just set a rule and then watch to see if it breaks, it’s regulation. Doesn’t nessarally have anything to do with anything at all Robin Hood like. She’s been proven wrong, scientifically, so often, that an entire video game was dedicated to her crockery. Well, the SL half of it anyway.

    Bioshock FTW!

  15. Mokona
    Mokona says:
    March 25, 2009 at 12:48 pm #

    I have always been under the impression (correct me if I’m wrong) that those bailouts were not loans. I mean, do you truly expect someone to reimburse 700 billion dollars or whatever they gave to all the banks and insurance company. I don’t know… maybe they could, but it’d take thousands of years (like getting rid of national debt…).
    In France, they made the difference really clear. They gave banks a bailout, but the auto industry got a simple loan, a real one, you know, with interest and all.

    If these bailouts are truly meant to be loans, i.e. you have to reimburse the debt, then I’ll say that those companies can do whatever they want with it (as long as it is legal, that is).

    I think the root of the problem is that almost everyone agreed that there should be a big change in the mentality of how the financial system works, and moves like this are not helping that change. They should have foreseen that it would be viewed as something bad and come public with something like “Hey, you know those bonuses we usually give, well, we’ve decided to reduce them by xx % because we felt it wouldn’t be right, since it’s taxpayer’s money and all”.

  16. Hypercube
    Hypercube says:
    March 25, 2009 at 1:45 pm #

    Look, this is your comic and you are free to do whatever you want. That being said, I read your comic because it is mostly gaming satire and parody. Politics is a risky subject. Your recent comic, and the statements that follow, are in sharp disagreement with my view on the matter. Loan or not, the intent was to help revitalize the economy; spending ridiculous sums in individual bonuses does not help get closer to this goal. Sure, you might argue that the amount is a very small fraction of what was recieved, but let's talk absolutes and point out that it is $165 MILLION dollars. Sure there are many, many, many other ways the government goes about wasting money, but $165 MILLION dollars should never be brushed aside as being insignificant. Furthermore, I wonder how many employees will be laid off that could have, otherwise, been sustained… (and the arguments go on)

    You see what I mean. I'm sure you are reading this comment and, while you are trying to keep an open mind, you are probably already formulating a rebuttle. My major point is this: I enjoy the lighthearted escapism of video game satire and I would rather not hear another repeat of a heated discussion I have been exposed to so many times in my day-to-day events.

  17. Squeaks
    Squeaks says:
    March 25, 2009 at 5:30 pm #

    I actually find it refreshing that SOMEONE prominent within this sub-culture is actually taking note of this. I have no idea what would have to happen to put us all on the right track. Politics are one of the few things that seem to have no truths and as such I have no idea who I would rather leave in power because both seem to have their fair share of idiotic ideas. All I can say with a certainty when it comes to politics is that I think we all could use a lifelong rest from Queen (Nancy) Pelosi's rallying speeches…….

  18. Peekaboo
    Peekaboo says:
    March 25, 2009 at 7:53 pm #

    zzzzzzzzzzzzzzzzzzzzzzzzzzz… all that jibber jabber and the situation hasn’t changed one iota… I think that the bottom line is that the comic was funny.

  19. Joe
    Joe says:
    March 25, 2009 at 8:03 pm #

    “I’m sure if it was in their contract that they had to give bonuses, then they would state that from the beginning.”

    SG,

    Giethner and the administration were in fact aware that AIG was required to fulfill its legal obligations with the noted bonuses.

    http://www.google.com/hostednews/ap/article/ALeqM5hEalVdubp5tGI_-bkLMyNULqCjXgD97040E00

  20. Kerig
    Kerig says:
    March 25, 2009 at 11:52 pm #

    I feel obligated to point out, the Executives receiving these bonuses are NOT the same executives who drove AIG to the brink of collapse. Those people have either resigned or been terminated.

    The executives receiving the bonuses were the ones that AIG assigned to help clean up this mess, some of them working for pittances as low as 1 dollar a year in exchange for this bonus. These people are the ones who, out of a sense of loyalty to both AIG and it’s client’s, have been working 12-15 hour days for little to no compensation. They are working in a position that they KNOW has no future and will engender little sympathy, and yet the public vilifies them.

    The entire affair was pure populists claptrap from a very uninformed public who are whining about 165 million being paid out to keep executives so they can finish cleaning up this mess. Meanwhile, the public seems to be whistling Dixie while they spend another 1.7 trillion dollars in poorly managed stimulous/TARP2/Newspaper bailouts etc….

    Grrrrr….

    to paraphrase Grandpa Simpson: I shouldn’t talk about politics, it angries up the blood.

    BTW, I really liked the comic.

  21. Jason
    Jason says:
    March 26, 2009 at 8:26 pm #

    “I feel obligated to point out, the Executives receiving these bonuses are NOT the same executives who drove AIG to the brink of collapse. Those people have either resigned or been terminated.”

    http://www.marketwatch.com/news/story/aig-pay-450-mln-bonuses/story.aspx?guid=%7BD69E1883%2D8A00%2D4F59%2D9DED%2DE701E15D9A59%7D

    For the slow, AIG Financial Products was the branch that dealt in the credit default swaps that were such a key in its troubles. Bonuses to schmucks = absolute BS. They need to stop trying to hide behind contract law… or we could always just go back to where we were, with them failing, and NO-ONE gets a bonus… or a paycheck.

  22. Karl
    Karl says:
    March 26, 2009 at 11:50 pm #

    The bonuses for AIG were less than 1/10th of one percent of the bailout budget, get over it!

  23. Adam Zikes
    Adam Zikes says:
    March 27, 2009 at 3:08 am #

    Main problem is that it’s the government directly involving itself with a PRIVATE company. No matter what you feel toward the people at AIG or any other big company the fact is that the government is trying to state that it’s ok to target individuals with a law geared toward screwing them over. One day it’s AIG because they didn’t spend the money THE GOVERNMENT gave them with NO strings attached and next it’s a small business that is ‘just not getting with the program.’
    I know that might seem far fetched and even to the point of hist aria but it’s really not that far off. Government will grow and go as far as it can until the people say when and that should have been off the break. Something you can do about this if you don’t like it is to write your representative and tell them you don’t like it. It’s their job to listen, so the first step is to send them a letter, email or even a phone call.
    So now you know and knowing is half the battle. GO JOE!! (Had to have a nerd reference somewhere.)

  24. Oberon
    Oberon says:
    March 27, 2009 at 9:50 am #

    “Bonuses (Boni?) are just that; a bonus, and shouldn’t be a contractual obligation.”
    “Should not” and “are not” are two different things. I’m no lawyer, but from all news reports on the subject those “bonuses” were not tied to performance (or at least, not the overall performance of the company. Some AIG employees may well have made their quote of credit default swaps sold necessary to quality for the bonus…), they were indeed contractual obligations.

    The only fishy business I see are the “employee retention” bonuses paid to employees who are no longer at AIG. You would think that any smart HR rep would know the definition of “retention.”

  25. Oberon
    Oberon says:
    March 27, 2009 at 9:59 am #

    @ Jason: A quote from the article you linked.
    ” Summers said the government would examine its options, but he acknowledged it might not be able to terminate prior bonus agreements.
    “We are a country of law. There are contracts. The government cannot just abrogate contracts,” he said [...]”

    That is so false as to be shocking coming from someone who should very much know better. The government loans to AIG came in place of AIG going bankrupt and being placed into receivership. During receivership the government looks at the contracts a company has and tears them up or modifies them as it sees fit. This is covered under the many different types of bankruptcy, and the government does this _all_the_time_.

    This is why the Fed is looking to expand it’s powers. Right now we have a black and white situation: Not in receivership? Free to do whatever you want with government bailout money. In receivership? Government dictates everything to both the company and all of it’s creditors. The Fed is looking to get some authority over the companies in the first case, so they can’t both take government/taxpayer money and also do whatever they want with no strings attached.

  26. Dremoor
    Dremoor says:
    March 29, 2009 at 5:57 pm #

    I don't think that they deserved bonuses, but at the same time I'm not in charge.

    The best part of all this is how Congress knew all along that these bonuses were contractually obliged, in fact the stimulus bill that was passed providing the last loans had written in it that the cap on bonuses and pay would not affect contracts made prior to February 16 (or 19, can't remember) 2009, that part was written by Dodd who later went on to say that he had no idea who would have put such wording in there to allow these bonuses, then a week later he said that he put it in there when reconciling the house and senate bills.