AIGâ€™s decision to pay out bonuses despite the financial companyâ€™s massive troubles has angered a lot of people. Place the president in the angry category.
Joining a wave of public anger, President Barack Obama blistered insurance giant AIG for “recklessness and greed” Monday and pledged to try to block it from handing its executives $165 million in bonuses after taking billions in federal bailout money.
“How do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama asked. “This isn’t just a matter of dollars and cents. It’s about our fundamental values.”
Itâ€™s unknown what Obama can or will do about the bonuses, but heâ€™s asked the Treasury Department to pursue every legal avenue.
While the presidentâ€™s statement is obviously meant to keep the bailout backlash from damaging the White House, heâ€™s right that this is not just a matter of money but of values. AIG had no business rewarding employees after many of them helped make the disastrous decisions which would have doomed the company if not for massive government assistance. While Iâ€™m sure there are employees at AIG who are competent and, in any other situation, worthy of a bonus, the company proved, yet again, that senior management is out of touch with the reality of the situation.
This is yet another example of how TARPâ€™s rush to approval left a lot of gaping holes. Nevertheless, AIG deserves the public outcry.