Monday, March 16, 2009

Bonus entitlement (from the tax-payer teat)


The big news in the financial sector this past while has been financial institutions on Wall Street receiving government (IE: tax-payer) money and then paying bonuses with it. The best way I have seen it expressed was; the taxes paid by someone working a minimum wage job are being used to pay multi-million dollar bonuses for people who work for companies that do so well that they need a government bailout. That sounds about right. Of course the obvious question is, if these companies are doing so bad that they needed government bailout money to keep going, why are they handing out bonuses at all?

The thing is that there are financial institutions on Wall Street who do not need a bailout cheque. They didn't take stupid risks and it looks as though their experts actually had some expertise, and they invested money wisely. These people have earned bonuses, and obviously since there is no government money involved, how and how much they hand out as bonuses is entirely up to them. I think that is called 'free enterprise', and more power to them.

But what about the companies that have their hands out for government, uh, hand-outs? The most recent one to his the news is American International Group (AIG) which received $170-billion in tax-payer money. Apparently the AIG managers became giddy when the scored so big that they started handing out multi-million dollar bonuses, which all totaled will come to somewhere between $165-million and $450-million. This is some pretty decent coin for doing a bad job and almost toasting the world economy. AIG claims that the are legally obligated to pay the bonuses, which I found to be interesting. I believe that traditionally bonuses were to encourage people to do a good job. Well isn't that all quaintly outdated and everything. These days it would appear that people are entitled to a bonus whether they do a good job or not. Good work if you can get it.

I wonder if, since with these huge companies merit and ability don't really matter any more, what is the incentive to do your best? Drink like a fish, dance like a three-legged cow, and lose billions of dollars and still get a wicked huge bonus? You know, that might explain why the economy is tanking like it is. Thanks guys. Good effort.

Anyway... Humouroceros

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