There is a transcript from executives at the American International Group (AIG) that is likely to infuriate many Americans, still smarting over the $165 million in bonuses paid to executives after the huge federal bailout. Statements from a conference call reveal executives who express contempt for the public and bravado in their own business abilities. These include statements from employees hoping that the public loses a trillion dollars and blaming the problems on Congress, and the public rather than their own business decisions.
Notably, one employee asks if the company could secure a second round of bonuses, which produces laughter from the group given the public outrage. Yet, AIG employees did get a second round of bonuses.
While AIG expressed contrition in public, employees denied any mistakes on the call. One employee stated “I will stand behind every action I have taken in this company from Day One.”
On the the conference call of March 23, 2009 with Gerry Pasciucco, who was hired to help shutdown Financial Products after the AIG bailout, the employees refused his suggestion that the employees waive their right to bonuses due to the company’s meltdown and bailout. The reaction was outrage, with one employee saying “I think it violates everything I believe in, and it’s un-American.”
One employee objected to the very notion of a penalty and insisted that some of the bailout money go to reward employees: “You made a commitment to us, and we made a commitment to you. And for anybody to look beyond that, as the politics and the media are at the moment, is missing the point. You can’t expect us to just roll over and ignore that commitment because there is a bunch of immoral bigots that intend us to do something different. It’s not going to happen.”
There are likely to be many citizens who have concluded that both Congress and AIG “missed the point” by giving these bailouts. What is really striking is how these employees are demanding bonuses after the bailout while blaming the public for their problems. One employee states “To be honest with you, I really hope it blows up. I think the U.S. taxpayer deserves to lose a trillion dollars over this thing for the way they have behaved.” The employee then declares “Well, none of them cares about the country, none of us cares about the institution. They really don’t care, and I really don’t care. And frankly, if a trillion dollars gets lost, fine.”
Pasciucco himself blames Congress and the public rather than the company: referring to the process, he states “I think it’s distasteful. It’s unfair. It’s unjust. I agree with you, it’s not American. It is McCarthy-ite. . . . It will be viewed as a horribly dark period.”
For the full story, click here.
mIKES:
“They see labor as serfs to be worked for little reward and taxed beyond ability to pay, specifically to support this new nobility.”
May I point out that the Government bailed them out (I know it was a republican government). This is why I am for a free market (most republican politicians are against capitalism, Bush certainly wasn’t a capitalist). A capitalist market may produce rich, poor and middle class people and the rich may be richer than any historic king but at least we are not subsidizing them through our tax dollars.
AIG should have been allowed to fail, it would have been better for all of us.
I heard on the radio today that the US is fundamentally broke we owe 12 trillion dollars which is on books, our GDP is only 14 trillion.
There is on other point that I think is important to make because it goes a long way towards explaining the political/economic difficulties that seem to be a plague on most of humanity. Marx and many others were right in their description of class warfare or historical political battles. It was the why this keeps happening where they went wrong and if you don’t understand the why of a thing then your can’t provide a counter to it. They all got hung up in politics and economic theory and because of it all of these great thinkers and theorists didn’t have a clue. The answer is to look at the societal arrangement of our close genetic relatives.
In Great Ape society for instance, the dominant male gets all the good food and all the females. He bestows on his pals a higher place in the hierarchy he creates, but shows his dominance by coupling with these lesser males. How are humans different, other than the male to male dominance coupling is not needed?
The rich get the attractive women, best foods, best homes and all the other toys available to humans. They display their dominance to those lower in the hierarchy in a variety of ways, but dominance it is. Cars are one measure of this. A Mercedes driver is overtly recognized as having higher status than a Ford driver. Waterfront/mountaintop scenic properties are impossible for the average person to afford and the access to these beautiful areas is highly limited.
We have TV programs like “The Bachelor” and “Millionaire Matchmaker” that shows people, primarily women, willing to degrade themselves for the chance to strike it rich by finding a man of means.
A four hundred horsepower auto has no useful purpose since anywhere in the US, save for the track, you’re probably going to jail if you’re caught driving more than 100mph. the car and the horsepower are stand-ins for penis size and penis size is a stand-in for being a “real” male.
If you view the class struggle through these lenses the examples are never ending and so there is little need for me to give others. However, let me conclude by saying that the remedy to this is first understanding and then finding a means to educate people to the fact that we don’t have to live our lives as Great Apes, who are after all almost extinct.
Elaine,
I’m a Taibbi devotee also.
To Everyone,
It makes me glad to see that so many understand this is a class war being waged upon us by an elite so besotted with themselves that their only mantra is: MORE! The politics is the bullshit that they use to divide us. We need to constantly remind eachother of this truth since the MSM denies it and denigrates those who express it.
“The silly “issues” that are paraded before the electorate as a means to differentiate one faction of the corporate party from the other faction serve the purpose of having the serfs turn the knives on each other, rather than at the powerful.”
FFN,
Right on target. I think that many have a visceral sense of this, but the media and its’ propaganda confuses us all and sets us against each other.
“There is a class war. I know this because it is my class that are waging it. And we are winning.” I should add that Buffet was not happy about this state of affairs.”
Maaarrghk!,
There is much to like about Buffet and he is among the best of his class, but dammit with his nearly unlimited wealth why isn’t he doing more to spread the word, like financing a TV/Radio network? The truth exposed is the greatest weapon we have to change things.
Enough with the whiney, impotent outrage and silly threats of burning down the castle in mob action. Let’s get level-headed and practical.
“Too big to (be allowed to) fail” means “must be broken up quickly to minimize the threat to our global economy.” Enough whining about bonuses – let’s take real action to split up these “institutions.” Folks will still be able to make millions off of these companies (and gaming the new, different system), but the total risk that any one of these few entities will fail won’t hang over our heads.
We have (or should I say, had) anti-trust legislation – let’s update it and put it into action. It will inevitably mean that the government will create some winners and some loosers – suck it up, the world isn’t a perfect place and life isn’t fair.
(Note than none of the above mentions Credit Default Swaps – a multi-trillion dollar behind-the-scenes casino that also needs to be unwound sooner, rather than later.)
The story these gamblers and scammers tell us is that if they aren’t allowed to roam freely, we will all suffer economically. Well, that might be true. I’m fine with a multi-year averaged, annualized GDP growth rate that’s some fraction of a percent lower over the next 30 years if that means that we have less severe panics and recessions. The Wall Street slimeballs play on our greed just like the Nigerian e-mail scammers, and we need to tell them to piss off – we’re fine making a modest rate of growth based on hard work rather than promises of easy riches based on fantasy-math and gambling.
One of them said “I hope this costs the taxpayer a trillion dollars.” I thought that it already had.
Mike S. On the button again Sir. Despite what our betters would have us believe, there is a class war here.
Very recently, a right wing interviewer quoted none other than Warren Buffet as saying “There is a class war. I know this because it is my class that are waging it. And we are winning.” I should add that Buffet was not happy about this state of affairs.
One thing that the “free market” believers forget to put in the equation is the human element of greed. When people have no moral rudder on how much is enough, people will always take more and more. That’s where gov’t regulations should be in place ( like laws) to protect the economically weak from those who have enough power to take advantage of them. That’s why we need gov’t to oversee “the game” to keep ” the game” honest – like referees.
I always read Matt Taibbi’s articles about Goldman Sachs, AIG, and the bailout in Rolling Stone. Sometimes I get so angry I have to put the magazine down.
From Rolling Stone
The Big Takeover
The global economic crisis isn’t about money – it’s about power. How Wall Street insiders are using the bailout to stage a revolution
MATT TAIBBI (POSTED MAR 19, 2009)
Excerpt:
I. PATIENT ZERO
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders — people who wear seat belts and build houses on high ground — and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people’s money would make his dick bigger.
That guy — the Patient Zero of the global economic meltdown — was one Joseph Cassano, the head of a tiny, 400-person unit within the company called AIG Financial Products, or AIGFP. Cassano, a pudgy, balding Brooklyn College grad with beady eyes and way too much forehead, cut his teeth in the Eighties working for Mike Milken, the granddaddy of modern Wall Street debt alchemists. Milken, who pioneered the creative use of junk bonds, relied on messianic genius and a whole array of insider schemes to evade detection while wreaking financial disaster. Cassano, by contrast, was just a greedy little turd with a knack for selective accounting who ran his scam right out in the open, thanks to Washington’s deregulation of the Wall Street casino. “It’s all about the regulatory environment,” says a government source involved with the AIG bailout. “These guys look for holes in the system, for ways they can do trades without government interference. Whatever is unregulated, all the action is going to pile into that.”
The mess Cassano created had its roots in an investment boom fueled in part by a relatively new type of financial instrument called a collateralized-debt obligation. A CDO is like a box full of diced-up assets. They can be anything: mortgages, corporate loans, aircraft loans, credit-card loans, even other CDOs. So as X mortgage holder pays his bill, and Y corporate debtor pays his bill, and Z credit-card debtor pays his bill, money flows into the box.
The key idea behind a CDO is that there will always be at least some money in the box, regardless of how dicey the individual assets inside it are. No matter how you look at a single unemployed ex-con trying to pay the note on a six-bedroom house, he looks like a bad investment. But dump his loan in a box with a smorgasbord of auto loans, credit-card debt, corporate bonds and other crap, and you can be reasonably sure that somebody is going to pay up. Say $100 is supposed to come into the box every month. Even in an apocalypse, when $90 in payments might default, you’ll still get $10. What the inventors of the CDO did is divide up the box into groups of investors and put that $10 into its own level, or “tranche.” They then convinced ratings agencies like Moody’s and S&P to give that top tranche the highest AAA rating — meaning it has close to zero credit risk.
Suddenly, thanks to this financial seal of approval, banks had a way to turn their shittiest mortgages and other financial waste into investment-grade paper and sell them to institutional investors like pensions and insurance companies, which were forced by regulators to keep their portfolios as safe as possible. Because CDOs offered higher rates of return than truly safe products like Treasury bills, it was a win-win: Banks made a fortune selling CDOs, and big investors made much more holding them.
The problem was, none of this was based on reality. “The banks knew they were selling crap,” says a London-based trader from one of the bailed-out companies. To get AAA ratings, the CDOs relied not on their actual underlying assets but on crazy mathematical formulas that the banks cooked up to make the investments look safer than they really were. “They had some back room somewhere where a bunch of Indian guys who’d been doing nothing but math for God knows how many years would come up with some kind of model saying that this or that combination of debtors would only default once every 10,000 years,” says one young trader who sold CDOs for a major investment bank. “It was nuts.”
Now that even the crappiest mortgages could be sold to conservative investors, the CDOs spurred a massive explosion of irresponsible and predatory lending. In fact, there was such a crush to underwrite CDOs that it became hard to find enough subprime mortgages — read: enough unemployed meth dealers willing to buy million-dollar homes for no money down — to fill them all. As banks and investors of all kinds took on more and more in CDOs and similar instruments, they needed some way to hedge their massive bets — some kind of insurance policy, in case the housing bubble burst and all that debt went south at the same time. This was particularly true for investment banks, many of which got stuck holding or “warehousing” CDOs when they wrote more than they could sell. And that’s were Joe Cassano came in.
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
**********
And from a more recent article:
Wall Street’s Bailout Hustle
Goldman Sachs and other big banks aren’t just pocketing the trillions we gave them to rescue the economy – they’re re-creating the conditions for another crash
MATT TAIBBI (POSTED FEB 17, 2010)
Excerpt:
On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America’s pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman’s role in precipitating the global financial crisis.
The bank had already set aside a tidy $16.2 billion for salaries and bonuses — meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a “bailout tax” on banks. Maybe this wasn’t the right time for Goldman to be throwing its annual Roman bonus orgy.
Not to worry, Blankfein reassured employees. “In a year that proved to have no shortage of story lines,” he said, “I believe very strongly that performance is the ultimate narrative.”
Translation: We made a shitload of money last year because we’re so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.
Goldman wasn’t alone. The nation’s six largest banks — all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry — set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. “What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?” asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.
http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle
Mike,
I agree completely. It’s an insiders/outsiders split. The silly “issues” that are paraded before the electorate as a means to differentiate one faction of the corporate party from the other faction serve the purpose of having the serfs turn the knives on each other, rather than at the powerful.
“James
What cannot be found cannot be garnished.”
==============================================================
My ancestral family motto … and for daily convenience, 2 additional words … Travelers Cheques
“Notably, one employee asks if the company could secure a second round of bonuses, which produces laughter from the group given the public outrage. Yet, AIG employees did get a second round of bonuses.”
The Marie Antoinettes on Wall Street are as blind to their precarious positions as she was to hers. But just as some palace lackey let the crowds know of her ” … let them eat cake” quote, some Wall Street lackey fed this little gem of a transcript to the American public. I bet there are mobs of people out there busily taking names and preparing to kick asses. Once it starts, it’s gonna spread like wildfire.
To quote an from an earlier poster on another thread, “Elitism works, until it doesn’t.”
AIG ought to recall we live in an era of both Google maps combined with unspeakable amounts of weaponry currently and legally in possession of the Serfs.
When we make the dollar the pornographic centerpiece of our national Thought, and then institutions charged with guarding that wealth instead steal it….and then take MORE of our money via bailouts, and hope we choke on it…this can only lead to EXTREME measures. When you are wiped out, it’s so much more than financial, given our gross emphasis on the wealth.
Because the government will never stop it.
A little over two years ago, I made the decision to stop filling out any more ponzi scheme paperwork. This would include W-2s, W-9s, insurance policies, loan applications, and the like. I closed all my bank accounts and all my credit accounts. I was told what a fool I would be because no employer would deal off the table.
Well, the depression forces even businesses to ignore their tax bills, their cc payments and and so on. All my clients are quite happy to detangle themselves from the Great Theft, the stealing of our national wealth that continues through this moment.
What cannot be found cannot be garnished.
I’ve found it hard to find the words/language to express this thought that has been percolating within me for some time now. The political battles we’ve seen going on are really not about liberal/conservative, left/right or Democratic/Republican. The real battle is a class fight. The wealthy, or putatively wealthy may not think of themselves as an entitled aristocracy
cognitively, but they share the same feelings towards the peasantry (the rest of us)that were felt by the nobility in feudal countries. They are entitled and we are not only not entitled, but we exist to serve their needs and to support them. They see labor as serfs to be worked for little reward and taxed beyond ability to pay, specifically to support this new nobility.
Now of course the “lower” classes have divisions within them from the elite’s perspective, just as the guild members in the middle ages received more consideration that the serfs. We must remember though that there were “sumptuary laws” back then to assure that the wealthier of the merchant class couldn’t dress like the aristocracy, under penalty of death.
My point obviously is we are in the same situation, fighting the same battles fought in for instance the French Revolution, Russian Revolution and Chinese Revolutions. One class vs. another. Our own revolution was an exception in that the Founding Fathers, while the richest people in America, were themselves not members of the nobility.
Those other three revolutions though ended as abysmal failures
as in France the aristocracy regained power, to be replaced with a new aristocracy based on wealth. Russia and China ostensibly found their ethos in Karl Marx, but while he showed discernment in working our the mechanics of what was going on, his solutions were unworkable and he failed totally to take into account the range of human greed and thirst for power.
These AIG employees are so cavalier in their beliefs, because they are in fact aristocratic cavaliers, qualifying as the new nobility based on wealth. Can “let them eat cake” be far behind?
Dear AIG,
Up yours.
4th circle of hell???? yup, there’s a lot of that going around lately….
“executives who express content for the public”? it does sound a lot like “contempt”.
Let us not forget that the taxpayers did not bail out AIG. The plunder barons in the government bailed them out.
Using our money over our protestations.
It was plunder.
“it’s unjust. I agree with you, it’s not American. It is McCarthy-ite. . . . It will be viewed as a horribly dark period.”
************
Yes and we are out to get you tooooo…..
It is unfair I say. I am not a simple citizen, I am Royalty. To deny me my 34th Porsche, my 25th house, my private jets is un-American! No, it is inhuman I tell you. I am the glue that holds this country together. How dare you treat me as a mere mortal!
AIG
Don’t be surprised when ordinary people, you know – citizen taxpayers, start burning your buildings to the ground.
Why?
That’s the kind of anger you create when people who SAVED YOUR ASSES, you give the finger and then rub their face in it.
Cause and effect, you ungrateful incompetent bastards.
I see mespo has prepared a travel guide for you.
Enjoy your trip.
If I were you clowns, I’d start hiring lots and lots of mercenary security.
I hear your brothers in fraud Blackwater/Xe are available.
Just remember. You get what you pay for. Or not. Just like insurance.
“… I saw multitudes
to every side of me; their howls were loud
while, wheeling weights, they used their chests to push.
They struck against each other; at that point,
each turned around and, wheeling back those weights,
cried out: Why do you hoard? Why do you squander?’ ”
~ Dante describing the fourth circle of Hell for those guilty of avarice.