NOTE FROM PAM: Take action — Firedoglake has a petition up that it will personally deliver to the Hill:

We’ll be delivering our petition to Congress telling them to stop this from happening on Wednesday morning when Barney Frank’s House Financial Services Committee holds a hearing on AIG at 10am ET.  You can sign it here and leave your comments for Congress.

Update from Autumn: Apparently, Rep. Barney Frank agrees with me on firing the Execs — stating with regards to the bonuses that “We are rewarding incompetence.” Video from the Today Show (via MSNBC) below the fold.

“There are a lot of terrible things that have happened in the last 18 months, but what’s happened at AIG is the most outrageous.”

Lawrence H. Summers, President Obama’s top economic advisor, on CBS’ Face the Nation

The AIG Chairman Edward Liddy said his “hands are tied” over awarding executive bonuses to the tune of $165 million after receiving four U.S. government totaling about $170 billion:

American International Group is paying out millions of dollars in executive bonuses to meet a Sunday deadline. But the troubled insurance giant has agreed to administration demands to restrain future payments.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company that has already received more than $170 billion in U.S. support.

AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

Treasury Secretary Timothy Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said Saturday.

This official, who spoke on condition of anonymity because of the sensitivity of the issue, said Saturday that Geithner had called AIG Chairman Edward Liddy on Wednesday to ask that Liddy renegotiate AIG’s current bonus structure.

In related news, the Los Angeles Times is reporting that AIG is naming the firms that got bailout cash:

AIG and the Federal Reserve have been pressured for months by some members of Congress to reveal the names of the banks and other institutions that were paid after the company — teetering on the brink of failure because of plummeting investments — received an $85-billion loan from the Fed in September.

AIG’s downward spiral was accelerated by losses related to its huge business of insuring high-risk mortgage securities against default, via complex agreements known as credit default swaps. As the housing meltdown worsened last year, AIG’s guarantees, which the company had sold to major banks and brokerages in the U.S. and abroad, came back to haunt it.

The federal rescue of the insurer has since doubled in size, and U.S. taxpayers now own 80% of the company.

Well, I guess the taxpayers got the consolation prize of knowing where the AIG bailout money went after the news that AIG outrageously contracted to pay out $161 million in bonuses when the company lost so much money that the U.S. government now owns 80% of the company.

Y’know, with the U.S. government owning 80% of the company, the government could do something — demand that AIG Chairman Edward Liddy resign, as well as anyone else who was involved at AIG in making those $161 million worth of bonus contracts when the company lost $61 billion just last quarter, and has been bailed out to the tune $170-ish billion — so far. It’s mind boggling.

And hey, if the involved AIG folk don’t resign, then the government should demand that they be fired for cause — they can join the 650 thousand Americans became unemployed just last month. They don’t need to be fired because Americans are angry about bonuses, they instead need to be fired for running their business so damn poorly.

Hearing Lawrence H. Summers say that the millions in AIG bonuses is “outrageous” just isn’t going to be enough.

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Autumn Sandeen

Autumn Sandeen