Bailout Report

Is the furor over AIG bonuses justified or political grandstanding?  Does a 0.01% investment in salaries for the staff overseeing the wind-down of a $1.6 Trillion portfolio justify harikari as Senator Grassley suggested?

Does it take 73 millionaires to wind-down a toxic investment portfolio?

What about the bonuses paid to other Wall Street firms?  Last week Merill  Lynch was in the crosshairs for shotgunning year-end bonuses just prior to the Bank of America takeover.  Is AIG merely the culprits of the week or was the firm’s bonus behavior more egregious than that of other TARP recipients?

Typically, investment banks pay out as much salary as they net in income.  That’s nearly $10,000,000 for banks like Goldman Sachs and Morgan Stanley.  That would buy AIG’s Financial Products staff many tmes over.  On a per employee basis, the investment bank average bonuses are far higher than AIG’s for many job categories.

AIG is no exception to the conduct of other bailout recipients.  It’s employees, however, may be the victim of a slow news cycle.  News of Merril’s bonuses hit while the Madoff scandal was receiving full press news coverage.  Misuse of bailout dollars was indeed in need of a poster child.  That the message turned out to be delivered on a Most Wanted poster is testimony to the growing public outrage.

(Comic captions of Depress-era photos by financial professional Cathleen Ritterreiser.)