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Screw Disneyland. We're Going to the St. Regis Resort Monarch Beach!
October 7, 2008 4:00 PM   Subscribe

Last month (Sept. 16, 2008) the American taxpayers bailed out insurance giant American International Group (AIG) to the tune of $85 billion dollars. So, asked "what ya' goin' do now after the bailout?" top executives said "party it up at the St. Regis Resort Monarch Beach (Dana Point, CA) for a week (September 22 - 30, 2008). Total costs? Invoice: $443,343.71. "$200,000 dollars for hotel rooms. Almost $150,000 for catered banquets. AIG spent $23,000 at the hotel spa and another $1,400 at the salon." Said Rep. Elijah Cummings (D-MD): "They were getting manicures, facials, pedicures and massages while American people were footing the bill. And they spent another $10,000 dollars for I don’t know what this is, leisure dining. Bars?"
posted by ericb (147 comments total) 9 users marked this as a favorite

 
Fuckers need to be put in jail, period.
posted by mark242 at 4:05 PM on October 7, 2008 [11 favorites]


This is my surprised face.
posted by gnutron at 4:06 PM on October 7, 2008 [5 favorites]


I really hope that some of these folks end up destitute or in prison. That they were able to gambol with their fat salaries and bonuses while seriously fucking up the economy for the rest of us and then continue to party even after their perfidy is apparent makes me ashamed to be of the same species.
posted by Mental Wimp at 4:07 PM on October 7, 2008


$3,000 in tips?
posted by boo_radley at 4:07 PM on October 7, 2008


It is time to eat the rich.
posted by HyperBlue at 4:08 PM on October 7, 2008 [10 favorites]


Hey, lay off. These guys are under a lot of stress. And those were very generous tips.
posted by philip-random at 4:08 PM on October 7, 2008


Apparently a sociopathic sense of entitlement can take you a long way.
posted by gallois at 4:09 PM on October 7, 2008 [3 favorites]


We are surprised because...?

You give a spoiled and sheltered addict who has never heard the word "no" in his life money to pay his bills, he is not going to pay his bills, he is going to satisfy his desires and go right back begging for money and give you a sob story and empty promises.

Enabling has never worked before.

And it's no different here. That bailout should have never have been approved in the first place.
posted by Alexandra Kitty at 4:09 PM on October 7, 2008 [12 favorites]


"these corporations
today it was aig
important call, there"

On behalf of McCain, I want to thank you, A.I.G. assholes. You've really done his campaign a solid.
posted by stavrogin at 4:10 PM on October 7, 2008


Isn't AIG's downfall merely the symptom of a systemic problem? I fail to see why I should be outraged about this.
posted by mullingitover at 4:11 PM on October 7, 2008


I don't like these people. Maybe my deleted comment was a bit harsh, but I don't think so.
posted by MrMustard at 4:11 PM on October 7, 2008


Why, what did you say, MrMustard?
posted by boo_radley at 4:12 PM on October 7, 2008 [3 favorites]


I doubt that they even knew that what they were doing was wrong. Probably didn't cross their minds.
posted by kuujjuarapik at 4:12 PM on October 7, 2008


These "executives" should have ALL, and I mean all, of their assets taken away and thrown out on the street. These 'people' are not human to me.
posted by gen at 4:12 PM on October 7, 2008


I haven't read the bill, but if it gives the fat cats carte blanche to do with that $700,000,000,000 whatever they please, it's the folks who passed it who ought to be in jail

...too.
posted by Sys Rq at 4:13 PM on October 7, 2008


CLASS WAR!!


I'm sorry, I have nothing meaningful to contribute. Truth is, we should not be surprised by this. This is what they do.
posted by lazaruslong at 4:13 PM on October 7, 2008


Yes but that $443,343.71 comes out of a different budget. Sheesh you people, lay off.
posted by mattoxic at 4:15 PM on October 7, 2008 [1 favorite]


You poor fuckers in the U.S. are taking it up the choccy starfish. I'd lend you a hand but we're holding on to the tiger's tail here in Canada.
posted by illiad at 4:19 PM on October 7, 2008 [2 favorites]


CLASS WAR!!

Aaah, y'all haven't got the grapes. After all, judging by the support the Republicans still get in the US, it seems a hell of a lot of people just wish they can be one of those guys some day.
posted by Jimbob at 4:22 PM on October 7, 2008 [1 favorite]


Not at all surprised. What do you expect from people who think they are smarter, more talented and wiser than everyone else? And that they are entitled to have more than everyone else?

This is capitalism, gang. Those thats got will gain, those thats not will loose.
posted by QIbHom at 4:22 PM on October 7, 2008


> Yes but that $443,343.71 comes out of a different budget.

AIG's money came out of the 79.9% equity stake the Federal Reserve took in exchange for bailing it out on September 16.

So, arguably, what they blew on this resort visit could have been dividends paid back to the Federal Budget and offset some of our tax burden. To the tune of something like $0.20 per taxpayer, true, but that can still buy you a match and thimbleful of kerosene, as long as you bring your own rag wrapped around a stick.
posted by ardgedee at 4:23 PM on October 7, 2008 [12 favorites]


By my estimates, that was .00052% of the total bailout amount. Not to justify this Executive Lifestyle, but it also matters whether the "retreat" was for 10 executives or 500. (If they treated 500 execs at the St. Regis for $800 each, it'd be bargain of the new century) I suspect it was set up months ago and would've cost $100K+ in cancellation fees. Again, I don't approve of this party, but I want to see more info: how many execs did the bill cover, and whether the attitude at the retreat was "we pulled off the scam, time to celebrate!" or "this will be our last chance to do this"...

And $3K in tips out of over $200K total spent on food, beverages and services? That's a 1.5% tip.

I hate to be in the position of defending corporate creeps, but I have witnessed worse.
posted by wendell at 4:24 PM on October 7, 2008 [1 favorite]


$3,000 in tips?

That's trickle-down economics at work, my friend!
posted by Brak at 4:25 PM on October 7, 2008 [15 favorites]


Hate.
posted by batmonkey at 4:28 PM on October 7, 2008


ow, come on, let them have fun.

for the last time.
posted by Substrata at 4:28 PM on October 7, 2008


I'm sure the investment banks we the taxpayers bailed out last week will put their money to much better use.

I mean, come on-- Orange County? That's so... plebeian. Surely Wall Street's bloated plutocrats can do better than that.
posted by dersins at 4:28 PM on October 7, 2008


If you are angry at AIG, here is their email form.
posted by McLir at 4:29 PM on October 7, 2008


Isn't AIG's downfall merely the symptom of a systemic problem?

Yes, the systemic problems of greed and stupidity.
posted by ryoshu at 4:30 PM on October 7, 2008


Ralph Waldo Emerson said: "Noblesse oblige; or, superior advantages bind you to larger generosity."
posted by netbros at 4:32 PM on October 7, 2008 [3 favorites]


They should send us a thank you note.
posted by drezdn at 4:35 PM on October 7, 2008 [1 favorite]


The War On Poverty ended: The poor lost.
posted by Devils Rancher at 4:38 PM on October 7, 2008 [9 favorites]


I don't like these people. Maybe my deleted comment was a bit harsh, but I don't think so.
posted by MrMustard


I'd like to see that comment reinstated. Otherwise, please post again.
posted by gman at 4:40 PM on October 7, 2008


Let's put this in perspective, $443,343.71 to $85,000,000,000 is up 00.00052158%, right? If we were to bailout a home owner, let's say out of a $200,000 house and they took $10 of that and spent on Chinese food for the night, we're talking about .005%.

Oh don't get me wrong, these executives should be hung from the light poles of Wall Street and let their blood trickle down the streets of lower Manhattan, but it is not as if they blew their entire bridge loan on a plasma television.

I mean it is not as bad as George Bush's cousin and Lehman exec (what is with that family? Do they all share the same first name?), who in an e-mail, a fucking e-mail and an investment bank during a fucking crisis, so you know if IT isn't already keeping 100x copies of this because of Sarbanes-Oxley they're doubly making sure they're getting backups now, it is not as if the cousin of a president in the middle of a huge collapse mocks the suggestion that executive pay should be cut because, you know, they don't have enough working capital to end the fucking year.

Nah, this is just a bunch of execs working 120 hours a week and looking at the prospect of having to give up that helicopter they take to work and decide to reward their team for working so hard in the crisis. Typical private sector behavior, I don't know why this is a surprise, it should only serve to underscore how privatization of profits and socialization of risk is one of the most foolhardy things around.
posted by geoff. at 4:42 PM on October 7, 2008 [3 favorites]


It was just one word, gman. And pretty appropriate, if you ask me.
posted by Jimbob at 4:42 PM on October 7, 2008 [1 favorite]


Sheesh, I didn't get *my* invitation. I mean, hey, I own part of AIG now (as does any U.S. citizen), so as owners, we should get to party down too!

Wonder what my share is worth. There are 305 million Americans, and we collectively own 80% of AIG. So that would be:

(1/305,000,000) * (0.80) * $0.00 = $0.00

Huh, guess my share isn't worth much. Is it too late for me to get my money back?
posted by jamstigator at 4:45 PM on October 7, 2008 [1 favorite]


I once worked for a travel company that specialized in corporate conferences for executives and "elite performers" (typically sales staff). The cost for these events were typically between $200K and $800K and were marketed primarily to the auto and financial industries, but all "Fortune 500" companies were in play. These events were normally planned 12-18 months in advance.

When I read the initial news about the AIG gala I wondered if this had already been in the planning stages for a long time. From my experience these types of events are bought well in advance and have heavy cancellation penalties.

So, a question: does anyone have any information on when this was planned, what advance monies were deposited, and what the cancellation penalties might have been?
posted by F Mackenzie at 4:49 PM on October 7, 2008 [1 favorite]


Geoff, after reading your link it seems as if Fuld was lucky to get coldcocked in the gym instead of strangled with his own bowels. Christ.
posted by Optimus Chyme at 4:49 PM on October 7, 2008


I don't think it can possibly be good for me to have my blood pressure shoot up as high as I'm sure it just did.
posted by supercrayon at 4:52 PM on October 7, 2008 [1 favorite]


All y'all better catch those fuckers before they shove off to Dubai, where they can't be extradicted.
posted by five fresh fish at 4:52 PM on October 7, 2008


I guaran-fucking-tee you there has been much, much, more egregious graft and gross waste at tax payer expense going on with nearly every contracting firm in Iraq.

Honestly, this is petty in comparison.
posted by tkchrist at 4:53 PM on October 7, 2008 [7 favorites]


Off with their heads.
posted by Blazecock Pileon at 4:56 PM on October 7, 2008


I hate to be in the position of defending corporate creeps

If you check out ericb's "Said" link, around 3:45, you see someone try to do just that...
posted by quinoa at 4:56 PM on October 7, 2008


Whoa, whoa, whoa, guys, hang on. That ten thousand tacked on at the end was totally necessary. We can't force these guys to kick cold turkey and go into full blown stripper withdrawal during a major crisis. That ten thousand was for a totally maintenance dose of titties, just enough to get them through this thing. Now that they're fixed up, they'll be able to better concentrate on saving the economy.
posted by The Straightener at 4:58 PM on October 7, 2008


Each fresh outrage heaped on the already lofty pile of shit we are all expected to eat if we're not plugged in to the oligarchy, every time it becomes that much clearer to American that the wealthy and powerful are looting their country and stealing the future for generations of children both there and elsewhere, and doing it right out in the open, winking and grinning all the while, the likelier it becomes that Barack Obama will win in a landslide in November.

The question then becomes: will anything really change?

History would seem to suggest 'no', but hope springs eternal and all.
posted by stavrosthewonderchicken at 5:00 PM on October 7, 2008 [3 favorites]


I thought the spa and salon expenses seemed pretty reasonable. As a proportion of the room cost it's only 13%. If for comparison, a room was $250, that would only be $35.
posted by StickyCarpet at 5:01 PM on October 7, 2008


Blah blah drop in the bucket blah blah.

Well, let's start by jailing these people and then we can move on to the bigger fish.

Point is as I keep saying is that these people have a fiduciary responsibility to do a competent job for their firm. This goes beyond a civil liability and can become a matter if they fuck up badly enough.
posted by lupus_yonderboy at 5:02 PM on October 7, 2008


Uh, are they hiring?
posted by beelzbubba at 5:03 PM on October 7, 2008 [4 favorites]


er, a criminal matter.
posted by lupus_yonderboy at 5:08 PM on October 7, 2008


>>Honestly, this is petty in comparison.

$443,000 could feed 1100 families of 4 for a month.

Other examples are worse? So the fuck what! I agree that there are far worse abuses of the public trust and cash grabs going on. That fact, however, does not excuse any of it.

The fact that there is *any* kind of "meh" about this shows that many of our worst fears about this nation's true priorities are real. See how they've acclimated us to being shafted? Much of the malfeasance they take for granted (at our expense) isn't even known about.

I feel like a cow in a feedlot. This sucks it to the 23rd power.
posted by SaintCynr at 5:15 PM on October 7, 2008 [19 favorites]


The only hopeful part of this is that if they screwed up so bad the economy collapses, the government will probably go with it. And with their protection gone and the public blaming them for their problems, there's a real chance that they will, in fact, end up paying for what they've done.
posted by Mitrovarr at 5:17 PM on October 7, 2008


And with their protection gone and the public blaming them for their problems, there's a real chance that they will, in fact, end up paying for what they've done.

Not a chance. Blackwater will just be really busy.
posted by ryoshu at 5:21 PM on October 7, 2008 [1 favorite]


The $10,000 was for edamame to give the monkey waiters...
posted by queensissy at 5:27 PM on October 7, 2008 [7 favorites]


$3,000 in tips?

That's trickle-down economics at work, my friend!

I came here just to say that.
posted by LouieLoco at 5:28 PM on October 7, 2008 [2 favorites]


What's interesting to me is that stories like this bring out the populists in everyone.

What's also interesting to me is that one of the biggest, biggest problems we have in this country right now is a complete lack of financial education.

People are causing runs on banks (even though their deposits are completely insured), and using credit to pay for luxuries (though ironically this was the first time in a decade that consumer borrowing fell) and houses at more than 5-10x annual income. Living further away and driving to work in fuel inefficient vehicles because gas is cheap and plentiful. Having a negative savings rate (after almost 15 years of falling savings rate). And ultimately blaming the banks, and Wall Street, for a problem that could be solved by reading a couple of economics and personal finance books.

Did a few greedy people make a lot of money off of these issues? Absolutely. But no one put a gun to the consumer's head to engage in reckless spending. No one minded having low interest mortgages when times were good. No one minded the fact that Fannie and Freddie were causing home ownership in this country to expand beyond its natural state (which is what caused alt-a and subprime to explode in the first place). The CDS bubble has been building for more than a decade. Where were the citizens' complaints?

Blame the politicians. Blame the rich. Blame Wall Street or corporate executives.

Or blame our own ignorance of the world of finance, because we elected the regulators (both Democrats and Republicans). We spent ourselves into a hole. We mortgaged our own futures.
posted by SeizeTheDay at 5:29 PM on October 7, 2008 [1 favorite]


Stop mortgaging my futures!
posted by Mister Cheese at 5:34 PM on October 7, 2008


I worked for a Fortune 500 company for four years. They bought us a pizza a couple times.
posted by jonmc at 5:35 PM on October 7, 2008 [1 favorite]


We spent ourselves into a hole. We mortgaged our own futures.

What's this "we"?
posted by Blazecock Pileon at 5:35 PM on October 7, 2008 [12 favorites]


To tell the truth, I've never been happier to be a renter who's too broke to invest in anything.
posted by jonmc at 5:37 PM on October 7, 2008 [6 favorites]


So this is who bought 21st insurance. Too bad I can only vote once with not renewing my auto policy with the new owners.
posted by buzzman at 5:41 PM on October 7, 2008


What's this "we"?

Yeah. Exactly. Thanks for proving my point.

Just because you aren't up to your eyeballs in debt, that doesn't mean that you aren't partially responsible. When mortgages go belly up and people get foreclosed upon, who pays to mow the yard, or clean the pool, or pay for police protection to make sure that the house doesn't get destroyed and ultimately create urban blight? You do, by paying taxes. Why are mortgage rates going up, when interest rates went down? Because banks had to conserve money because deadbeats cost the banks a shitload of money. Guess who pays the artificially high mortgage rate because of the deadbeat? You do.

We really are in this together, because a country with a negative savings rate and gigantic fiscal deficits costs everyone in the form of inflation and higher interest rates (more money for banks, less money for hard working savers who are fiscally responsible).

So please, go ahead and point fingers.
posted by SeizeTheDay at 5:42 PM on October 7, 2008


As Sarah Palin might explain it: "Saw, dawncha knaw, Joe Sixpack on Main Street took out a loan that he couldn't pay back because the bankers, it was fraud also, and all the way to Wall Street, then healthcare, healthcare has to be a part of the recovery plan also and trade, but not like a scary thing, more like - but when Putin rears his head, where's he gonna gaw, ya? So that's why we need a bailout. Ya."
posted by kcds at 5:42 PM on October 7, 2008 [4 favorites]


I am loving this picture of Dick Fuld.
posted by Combustible Edison Lighthouse at 5:42 PM on October 7, 2008 [8 favorites]


As Sarah Palin might explain it: "Saw, dawncha knaw, Joe Sixpack on Main Street took out a loan that he couldn't pay back because the bankers, it was fraud also, and all the way to Wall Street, then healthcare, healthcare has to be a part of the recovery plan also and trade, but not like a scary thing, more like - but when Putin rears his head, where's he gonna gaw, ya? So that's why we need a bailout. Ya."

How the hell did a woman from Alaska aquire what sounds like a Minnesota accent, anyway?
posted by jonmc at 5:45 PM on October 7, 2008 [1 favorite]


All'y'all nouveau-riche motherfuckers g'wan eat shit and die in a fire.
posted by seanmpuckett at 5:49 PM on October 7, 2008


I don't care how many others are doing it. I don't care how little an amount it was compared to everything else they've done.

None of it should have been allowed. None of it.

It is infuriating and humiliating the way they (and others like them) are given the ability to live more freely, more advantageously, and with less compromise than the rest of us and when their house of cards has been proven to be just that, there are no solid repercussions.

Let one of us screw up our lives - no matter how deserved or undeserved - and the difference in how we'd be treated is almost sickening.

We don't even have the bankruptcy protection we used to have anymore - our version has been stripped and spiked, and their version was made more obtainable.

Culpability. I'd just like to see some damned culpability.
posted by batmonkey at 5:49 PM on October 7, 2008 [13 favorites]


Wait, no, not almost sickening. It is sickening.
posted by batmonkey at 5:50 PM on October 7, 2008


My boss at the used bookstore is really concerned about all this though. I can back from a week off a few weeks ago and I said "I miss anything?" He said "Yeah, the stock market crashed." I shrugged and said that i didn't own any stock and that would be a neat change of pace to see dazed investment bankers in tattered suits selling the leatherbound volumes from the lobby for beer money.
posted by jonmc at 5:50 PM on October 7, 2008 [2 favorites]


I've got a proposal. All this nonsense about some companies being "too big to fail", so therefore when they screw up us taxpayers foot the bill has got me thinking. How about we solve the problem not by bailing out poorly managed "too big to fail" companies but rather by breaking up any company that is too big to fail?

I mean, wouldn't that make more sense? "Well Mr. Executive your company has grown so large that its now officially too big to fail and we don't want to get stuck with the bill when you screw things up, so we're splitting you up. Have fun!"

If the problem is that these companies are too big to fail, I say let's solve that problem and shrink 'em a bit. If people argue that task is impossible, that somehow they *MUST* be too big to fail, then I say nationalize 'em. But the last thing we need to be doing is giving truckloads of money to companies driven into the ground by criminal executives. Too big to fail ought to equal either broken up or nationalized.
posted by sotonohito at 5:52 PM on October 7, 2008 [8 favorites]


SeizeTheDay, do you honestly think borrowers are more at fault than lenders here? Are you seriously suggesting widespread borrower fraud in lieu of insanely lax due diligence on the part of the lenders?

Seriously?
posted by butterstick at 5:52 PM on October 7, 2008


I actually do have some shares of AIG. $300 worth the day the bailout, about the time that the first announcement that there would be some kind of bailout (but before) the harsh terms were announced. The price has fluctuated wildly but it remains at about the same value.

Anyway, the price of this party is less then 13 one hundredths of a cent per American citizen. I don't really see what the big deal is, I'm sure plenty of ordinary government employees hold expensive parties as well.
posted by delmoi at 5:54 PM on October 7, 2008


Anyway, the price of this party is less then 13 one hundredths of a cent per American citizen.

That could've bought me a thimbleful of cheap domestic beer. Who are these people to take nourishment from me?
posted by jonmc at 5:57 PM on October 7, 2008


I've got a proposal. All this nonsense about some companies being "too big to fail", so therefore when they screw up us taxpayers foot the bill has got me thinking. How about we solve the problem not by bailing out poorly managed "too big to fail" companies but rather by breaking up any company that is too big to fail?

Seems like a good idea to me. Although I have to why should they be to big to fail, why not just "to big in general" or just "big enough to fuck with you." Companies like microsoft, google even ought to be looked at IMO.
posted by delmoi at 6:01 PM on October 7, 2008


So please, go ahead and point fingers.

I know I didn't cause or contribute to this mess. I know my family didn't, either. I also know that our tax dollars are paying for post-bailout junkets for corporate executives, even though we lived within our means.

I think that warrants a little more and a little better than your finger-pointing at regular folks who do not and will never live the same extravagant lifestyle as these corporate executives. If there are bank runs, that shouldn't be a surprise given how untrustworthy those in charge have behaved. In any case, please do not lump us in with these crooks.

In an age of McJobs, layoffs, outsourcing, health benefit cuts and cost of living increases that have all outpaced wages, I also think that it is unhelpful to lump in regular folks as a whole with these criminals.
posted by Blazecock Pileon at 6:02 PM on October 7, 2008 [9 favorites]


All the craziness aside… the St Regis at Monarch beach is a wonderful resort. Stayed there this last May — and I really enjoyed my pedicure at the spa.

* sighs contentedly *

But I wasn't there on the taxpayers' dime (though it was a business expense). So, well … yeah … Damn AIG!
posted by silusGROK at 6:03 PM on October 7, 2008


Haha, Obama just called out AIG's party during the debate.
posted by delmoi at 6:06 PM on October 7, 2008


Yes, liveblogging at polifi for those interested.
posted by butterstick at 6:07 PM on October 7, 2008


(debate live streaming at hulu.com)
posted by Auden at 6:11 PM on October 7, 2008


OutrageFilter. GRRRRR!!!!!!!

No health care? No money in the bank? No nothing? Let them eat pretzels!

The narcissism of corporate fraud.

Yup, got to be some changes. It's going to need people to get up and take action. Write emails, contact "your representatives". Do something to express what you want for a better government.

StopTheHousingBailout.com
posted by nickyskye at 6:11 PM on October 7, 2008 [1 favorite]


Yeah, SeizetheDay, what's this we?
posted by strontiumdog at 6:11 PM on October 7, 2008


All kidding and punishment aside, I very much wanted to see at least a few measures I think are quite reasonable in the Bailout Bill:

1) Formal (near cryptographic levels of) distrust between the groups holding the bad securities and the groups rating said securities AAA when they are not, in fact, AAA. That stuff should be totally disincentivized. The company rating you at that moment should be randomly selected; they get paid whether or not you like the rating, etc. The groups doing the rating would be paid at a later date based on the accuracy of said rating as it compares to the actual, real world performance of those securities. In other words, make it so that I don't bundle up a bunch of really crap mortgages from guys who just aren't gonna pay out in the middle of a thin layer of dependable types, then take it to Ted, who always gives me a good rating after a few martinis.

2) Restructuring of pretty much every ARM around, to lower the foreclosure rate and stop the housing market freefall (which, after all, seems to be a prime initial component of the panic). And everyone who wants one in the future has to take a sobering class filled with statistical projections of their worst nightmares, complete with videos trashouts. Those drivers ed classes with blood on the highways? Yeah, like that, but for mortgages.

3) Any company not wanting to accept whatever terms of the bailout gets precisely squat. If the sticking point is that your CEO parachute isn't platinum, merely golden, you do not need a bailout that bad. Said companies might actually need a bailout that badly — this means that the folks saying, "This deal isn't sweet enough for us" can get the boot.

Much of this disaster seems to be generated by irrational optimism; paper wealth decoupled from assets (or translated into ever more abstract representations of such); poor estimations of actual value; and, finally, a sense of entitlement.
posted by adipocere at 6:19 PM on October 7, 2008 [2 favorites]


do you honestly think borrowers are more at fault than lenders here?
&
I also think that it is unhelpful to lump in regular folks as a whole with these criminals.


Again, what I said was, we have a general populace that has a complete lack of financial education. I blame regular people for that, and I blame our educational system. Interestingly, a stupid, passive, fiscally wreckless populace enriches those who are intelligent enough to take advantage of that (which turns out to be the executives of various retail, pharmaceutical, and financial firms).

So I think there is plenty of blame to be put on consumers who helped cause our negative savings rate and overly mortgaged real estate. But there's plenty of blame to go around.

In an age of McJobs, layoffs, outsourcing, health benefit cuts and cost of living increases that have all outpaced wages, I also think that it is unhelpful to lump in regular folks as a whole with these criminals.

I'll just address this one issue. Economics 101. Why has cost of living increased so much? Because we live in a world where commodities are being demanded by more and more people. In addition, the value of the dollar has fallen over the last decade, primarily because of fiscal deficits, but also because we have created so much mortgage debt that the dollar isn't worth what it used to be.

Who's fault is that? Well, our government needs to stop spending. But how can we reign in spending, and at the same time pretend like Medicare is solvent? How can we reign in spending when people want universal healthcare? Something's gotta give... Mortgage debt needs to be paid off with real income. If we keep mortgaging, instead of accumulating wealth, the dollar will remain weak, keeping costs of goods high.

I use the word "we" because this really is an American problem. Not a "poor person problem". Not a "politician's problem". It's a systemic problem caused by a general unawareness of basic economics and finance. WE means that this is a societal problem that requires a societal solution. No one person, organization, or company caused this, and no one person is going to fix it. It's systemic.
posted by SeizeTheDay at 6:22 PM on October 7, 2008 [1 favorite]


“...the likelier it becomes that Barack Obama will win in a landslide in November.
The question then becomes: will anything really change?”

With Obama in office? Sure. The question is: Will he get into office?

“Because banks had to conserve money because deadbeats cost the banks a shitload of money.”

Might have been nice if they didn’t engage in predatory loaning. It’s not like there’s not a check cashing place with 1000% lending rates on every corner in the rougher parts of town. Oh, we’re most definately in this together. And we should have been looking out for the poor. But don’t hand me this “it’s your own fault” crap because it’s not.
Nobody put a gun to anyone’s head and told them they have to steal and exploit people to make a living.

Guy wants to deal drugs in the neighborhood, ok, poverty might excuse why he gets into it. But he’s still going to jail.

And as a matter of fact, folks were exhorted to spend like drunken sailors on leave. In ‘08 72 percent of the economic activity in the U.S. came from consumers. Apparently some folks think (I myself have no clue to the veracity - but I know some folks think it) consumer spending can pull the economy out of anything. It’s the first thing this administration told people to do after 9/11. What do we do? Give blood? Volunteer to help? No! Go buy shit.

Well, they’re stupid for listening, one might say. Well - yeah. That’s why you have to look out for them. I mean 100 I.Q. is *average* yeah?

This whole St. Regis deal is just a sympton of the whole “Go buy shit” attitude. These people are no different than the average asshole in the street, they just have more money and buy bigger shit and have far bigger debt.

Now, ok, maybe some dumbasses getting loans are somewhat responsible, but I’d look to the dumbasses with a whole lot of money as being capable of doing a lot more damage.

I mean - look at the French Revolution. You had this same kind of conspicuous consumption by Louis XVI and Kirsten Dunst, and folks got mad. But once they got into power they just started chopping people’s heads off. A sort of Saul Rosenburgesque “chop everybody” (sans shoes and glasses). And they stab their smartest guy while he’s taking a bath, so some short guy comes along with the army and he’s talking bad ass and so they follow him and it was the best of times, but the worst of times with mayors lifting huge carts and cops throwing themselves into the Seine...

... I appear to have gotten side tracked there.
posted by Smedleyman at 6:26 PM on October 7, 2008 [5 favorites]


Here's a little story about how the government spends its money. Our money.

I was an enlisted man in the USAF during the Gulf War. My original job was satellite imagery. That didn't work out for me morality-wise, so they made me an accountant who processed and paid travel claims. We were told constantly to be on the lookout for Fraud, Waste, and Abuse of moneys, and to report anything we noticed. They cared about malfeasance, and wanted to stamp it out, we were told.

One fine day, I was assigned to a "bag drag" detail, which is basically carrying luggage for VIPs. A group of 20 or so officers had flown from Nebraska to California on a one week trip, and had returned, and we offloaded and carried their personal items. 3-4 pieces of luggage per person. 20 bags of golf clubs. 20 bushels of strawberries. As we were doing all this, I distinctly overheard and saw one of the officers say to a group around him, "Not bad, a one-week golf trip on Uncle Sam's dime. Just hope no one finds out the "mission" wasn't necessary." And then they all laughed and slapped each other on the back. Then, they kept talking about how it was a sweet deal to go on vacation for free.

When I got back to work, I started to notice travel vouchers trickling in from that trip. I was to pay per diem and lodging costs, as well as other "necessary" reimbursements for them. They also used a C-135 cargo plane to ferry them there. All up, the trip probably cost $150,000. I went to my supervisor and said, "I overheard these guys talking about this being a golf trip. We shouldn't pay these, and further, we should report them to the Inspector General, because this is fraud. They wrote their own orders to go golfing, and want the government to pay for it."

I waited a while for a response. My supervisor and his supervisor called me in to a conference room after a couple hours. "They have legitimate orders for a necessary mission, and we have to pay their expenses." I reiterated what I had heard, and my overall impressions of the officers and their conduct. I was told in no uncertain terms that I was to ignore that and do my job. I then said, "I'll go to the IG myself, then." They told me I'd be given an article 15 (non-court martial punishment) if I did that.

I did it anyway. I knew what I'd witnessed, and wasn't going to let it go.

When I spoke with the Inspector General for the base, he got all folksy on me. "It's not your job to determine what is and isn't allowed", he said. I pressed on.

Then, with a completely straight face, he said, "Airman, if you continue with this, I will instruct your squadron commander to restrict you to the base for the remainder of your assignment here, place you in confinement for 3 weeks, and bust you down a stripe. Now, get back to work and stop wasting my time."

I don't have time to relate all the other happenings like this that I witnessed over a 1 1/2 year stint in that job. This is just the tip of the iceberg. Millions of dollars were wasted on "VIPs" fucking around at fake conferences. And that was just where I was.

The government does not care about using your money wisely. They care about you paying and shutting the fuck up and having a Coke and a smile.
posted by SaintCynr at 6:26 PM on October 7, 2008 [64 favorites]


Come on guys. We all know someone who has a substance abuse problem. When they are close to hitting the bottom, and you stuff their pockets with money, what do they end up doing?

Do they change their life, or is their behavior reinforced?

Seriously...as much as I want those bastards to be put into prison (I'm talking Leavenworth, not a white collar country club style minimum security prison)...enabling them won't change the way they operate.
posted by hal_c_on at 6:40 PM on October 7, 2008


What are their names?

The ones who spent my money fiddling while we burned the future.

What are their names and addresses?
posted by blixco at 6:44 PM on October 7, 2008


From nickyskye's link: Sam Vaknin is the world’s leading expert on narcissism. He’s also a narcissist himself.

Well, being a narcissist, he's probably an expert on everything.
posted by jonmc at 6:44 PM on October 7, 2008 [1 favorite]


Interestingly, a stupid, passive, fiscally wreckless populace enriches those who are intelligent enough to take advantage of that (which turns out to be the executives of various retail, pharmaceutical, and financial firms).

Interesting indeed.

That's just blaming the victim. Yes, and if stupid people were smart, we wouldn't be in this mess. We'd be in a different kind of mess when the smart people take advantage of the slightly less smart. Banks have entire departments of loan officers that know exactly how much equity a borrower is taking out of a home. They can turn down loans.

The rest of America is in jeopardy not because of greedy borrowers, but because of complicated and unregulated financial vehicles used by the financial ruling class to hide risk.
posted by butterstick at 6:45 PM on October 7, 2008 [1 favorite]


Okay, so I'm a little late to this thread, but anyway, my best friend is very high up at AIG and I mentioned this to him and he offered an explanation. Mind you, this is no defense... He said that AIG is a HUGE company with many divisions and some of these divisions are very profitable. In addition, these divisions rely on 'rainmakers' to bring in business. This 'party' had been planned much in advance by a very profitable division and was a way of thanking the 'rainmakers'. In essence, this party had been paid for out of the profitable division's budget and not from the money-losing divisions which had needed the taxpayer money. Whether you agree or disagree with it, in this particular case, the people being treated so well had at least 'earned' this party by actually making a profit for the company. Now, whether this was the right thing to do from a publicity perspective is certainly debatable, but at time like this, do you want to go pissing on the people who are making you money? If it comes down to the taxpayers, we should be encouraging AIG to turn a profit.
posted by PigAlien at 7:14 PM on October 7, 2008


This is obviously fraud approaching on treason. Treason during a time of war carries the death penalty. Sounds good to me.

Oh, and don't you liberal intellectual elitists have a debate to be watching?
posted by cjorgensen at 7:20 PM on October 7, 2008


Okay, so, someone explain to me why the press isn't all over story. I mean, people love to get their hate on.

Anyway, the price of this party is less then 13 one hundredths of a cent per American citizen.

Tell ya what. Y'all donate a measley 1/100th of a cent apiece, since you can't figure out anything better to spend it on.
posted by Durn Bronzefist at 7:27 PM on October 7, 2008


So please, go ahead and point fingers.

There is something predictable in the equation of how consumers act in these situations. If you give people an opportunity that's not at all realistic but you sell it to them that way, like, say, offering a loan for a house that costs far too much for the borrower to afford, they will take it often enough that you can't count on the prospective borrower to evaluate on their own whether or not they can handle the loan. It's therefore incumbent upon the lender - if they care about their investment, that is - to evaluate the fitness of the borrower for the loan, and not to offer financial opportunities which are not possible for the borrower to meet. But I guess they either didn't care about their investments, or they thought it would all work itself out through leveraged risk.

It's not clear at all to me that the borrower is the idiot, except for the fact that the government might be expected to bail out the lender.
posted by krinklyfig at 7:49 PM on October 7, 2008


@PigAllen, what is your friends name?

I want to get to know him. Personally.
posted by blixco at 7:53 PM on October 7, 2008 [1 favorite]


You guys need to focus on what's really important here about AIG: will Manchester United be able to buy a top-class striker in January if AIG can't help pay for it?
posted by Brocktoon at 7:55 PM on October 7, 2008 [3 favorites]


Now, whether this was the right thing to do from a publicity perspective is certainly debatable, but at time like this, do you want to go pissing on the people who are making you money? If it comes down to the taxpayers, we should be encouraging AIG to turn a profit.

Given recent history and the current political atmosphere, you'd think they'd be trying to shore up their image, not appearing as if they're pissing on all of us who funded this extravagance.

Sure, it's what executives do. This is not new. But you'd think maybe, maybe they'd care enough to put forth their best face, at least for a little while. Maybe take the hit for the cancellation and instead announce that the company is using the money for a working retreat for the executives at a modest, non-secret location, after which they will emerge with their company policy on their responsibility to the American taxpayer. That might even help their image enough to affect their bottom line in a positive way. Sure as hell couldn't hurt. But I know that's a pipe dream ...
posted by krinklyfig at 8:00 PM on October 7, 2008


Look, I've got the solution to all your investment woes. Withdraw all your money, sell your car and house, cash in your stocks and bonds, take the whole wad of cash and invest it in whatever company makes that silvery shit od scratch-off tickets.
posted by jonmc at 8:20 PM on October 7, 2008 [1 favorite]


In essence, this party had been paid for out of the profitable division's budget and not from the money-losing divisions which had needed the taxpayer money.

Wait, what? Do I even need to ask the glaringly-obvious question here?
posted by George_Spiggott at 8:30 PM on October 7, 2008


Well, blixco, I suppose I didn't make it clear that AIG is a huge company and my friend had nothing to do with either this party or the division that caused all of the losses. He's in another profitable division altogether, which, to my knowledge, hasn't recently thrown any lavish parties. He's also not an executive, although he does have quite a bit of responsibility. Anyway, you can't blame everyone who works for AIG for the arrogance and mistakes of a few. AIG has tens (hundreds?) of thousands of employees and many divisions and subsidiaries, like any multi-national corporation. Many of the employees who work there are sickened and angry at what has happened, as their own financial futures and jobs are at risk as much as anyone else's, if not more.
posted by PigAlien at 8:30 PM on October 7, 2008


Wait, what? Do I even need to ask the glaringly-obvious question here?

If by that you mean why are we bailing one part of the company out if another part of the company is profitable, apparently you do.
posted by birdhaus at 8:37 PM on October 7, 2008


In essence, this party had been paid for out of the profitable division's budget

In the multinational corporation I work for, when the company was struggling it meant no raises for a couple years, even though the branch of the company I worked for was exceeding our revenue targets every quarter. So, there is no doubt in my mind that this was the wrong thing to do...
posted by inparticularity at 8:40 PM on October 7, 2008


Well, anyway, I said in my very first post that I was not intending to defend this party. Simply pointing out that it wasn't just a thumbing of the nose. One may agree or disagree whether it was appropriately timed or should have been canceled, but the intention was to reward those in the company who had actually performed well and generated a profit, as opposed to giving golden parachutes to losers leaving the company in worse condition than when they were hired.

As for the question about bailing out one part of the company when another is profitable, I just think that's totally obvious. If you're a store and you have 100 locations and 95 of those locations are losing money and 5 are making money, you're still probably losing money over-all, but shouldn't you focus on keeping those 5 profitable? If that means rewarding employees for work well done and trying to keep morale up by making them feel special, that's just a cost of business that's entirely reasonable. Then again, I'm not defending this party, just trying to put some perspective on it.

On a side note, other than having a friend who works for AIG, I have nothing to do with the company. However, I do work for myself, and I can tell you that my business is based on referrals. It doesn't matter that every commission check I receive has already been spent on overhead and other expenses, without exception the first person I pay is the person who sent me the referral in the form of a very nice meal somewhere or a gift certificate to their favorite store. In addition, I also do the same for my client, in the hope they'll remember me for their referrals in future.

The bank may have lent me money to run my business, which I have an obligation to repay, but I always pay my clients and those who referred them first, even before the bank. You must never bite the hand that feeds. I don't think the bank would object to that either, for if I no longer got referrals, I wouldn't be in a very good position to pay back the bank.
posted by PigAlien at 8:55 PM on October 7, 2008


If by that you mean why are we bailing one part of the company out if another part of the company is profitable, apparently you do.

Um, because insurance company subsidiaries are required to have certain capital reserves? The NY branch of AIG had enough money to bail out the whole company, but couldn't, because of capital reserve requirements.
posted by delmoi at 9:12 PM on October 7, 2008


As for the question about bailing out one part of the company when another is profitable, I just think that's totally obvious...

I'm not going to quote the whole response, just point out that you didn't get to the part where you explain how their hand ending up in the taxpayers' pockets instead is more just and proper.
posted by George_Spiggott at 9:19 PM on October 7, 2008


George, I said that even a company with 100 stores might have 5 profitable stores and still be losing money... That doesn't mean that the 5 stores that are making money should be treated like money-losers just because the other 95 are. If I were lending such a company money, I would think it irresponsible of them not to focus on keeping those 5 stores profitable, in addition to trying to make the other 95 stores profitable again, or closing them as necessary. That's what I think is totally obvious. It doesn't take a rocket scientist to figure that out.

My personal opinion would be that if it were considered absolutely necessary to go forward with something like this, which had already been planned, I would have at least scaled it back and sent a memo around to all those participating to please be considerate of the current situation and not behave too lavishly and that the company would not pay for anything besides food and lodging and maybe some low-key communal entertainment.
posted by PigAlien at 9:30 PM on October 7, 2008


Who's fault is that? Well, our government needs to stop spending. But how can we reign in spending, and at the same time pretend like Medicare is solvent? How can we reign in spending when people want universal healthcare? Something's gotta give...

You want to talk about spending?

Instead of talking about taking away basic human rights we don't even grant now, how about we impeach Bush and Cheney for looting the Treasury to make their friends in the energy and military businesses wealthy?

Instead of talking about taking away basic human rights we don't even grant now, how about we impeach Bush and Cheney for wanting to loot taxpayers to privatize Social Security?

Don't blame regular folks for this mess. It was the fault of big business right from the start.

And I'd like to suggest that you stop telling people not to withdraw their money from the banks, if they want to.

If bankers can't be trusted, let people decide for themselves where their money goes. Letting people decide for themselves is Adam Smith's real Free Market, not this bullying of small business owners and savers into watching their savings and retirement funds evaporate.
posted by Blazecock Pileon at 10:07 PM on October 7, 2008 [5 favorites]


I believe Obama said "those executives should be fired."
posted by salvia at 10:48 PM on October 7, 2008


Watching people make excuses for the sheer avarice and abuse of public trust shown by these predators is both fascinating and repugnant.

I understand that's why we're at this point (again, even; Keating Five wasn't that long ago), so it's odd to me that apparently intelligent, aware people are capable of justifying malfeasance of this degree.

The reasons one could possibly entertain for excusing their wastefulness and greed ring hollow when evaluated against the net effect.

Pathetically, the willingness to embrace the broken thinking these incorrigibles are foisting off on us will only serve to further guarantee us lives of more stress, unease, and discomfort, while the majority of those directly responsible are going to retain their material enrichment and respectable facades.

It's revolting and pitiful. Like a tortured animal begging for affection from its abuser*.

*maybe we should get 4chan to 'shop up a glurge-tastic pity graphic for us
posted by batmonkey at 11:14 PM on October 7, 2008 [2 favorites]


Or blame our own ignorance of the world of finance, because we elected the regulators

No, we elected the deregulators, a group of which John McCain was once so proud to be part of.
posted by Neiltupper at 11:27 PM on October 7, 2008


SeizeTheDay: Again, what I said was, we have a general populace that has a complete lack of financial education ... So I think there is plenty of blame to be put on consumers who helped cause our negative savings rate and overly mortgaged real estate ... I'll just address this one issue. Economics 101.
Actually, I'd put just as much blame on 'Economics 101' itself. It's clear now that the dominant consensus in economics over the past 25 years has had about the same predictive value and ratio of reality : ideology as Mao's Little Red Book. You sound like an Old Guard Communist, looking at the crowds baying for commissar blood and complaining that the only reason they're unhappy is that they haven't read Das Capital closely enough.
posted by Sonny Jim at 12:39 AM on October 8, 2008 [3 favorites]


Uhh.. as someone else said above? This isn't taxpayer money. Trips like this take months to plan, and payment (or the bulk of it) is generally in advance. Attrition and cancellation penalties are immense.
posted by dirtynumbangelboy at 1:04 AM on October 8, 2008


Gosh these guys clearly need to be taken down several notches.

I spent most of my career at Deutsche Bank, and there it was drilled into us repeatedly that the mere appearance of impropriety was unacceptable.

I was employed by DB for - as I tell folks - ten years and three countries. My final reporting line was one level below the Operational Board, a position I held for maybe three years, so I had a very wide perspective and saw lots of folks come and go during my tenure.

One senior guy responsible for UK Capital Markets got caught up in the appearance of impropriety thing, and was terminated, for cause. We were doing a deal with another firm, and during the negotiations he went skiing with some of salespeople from the winning bidder. They didn't pay for his trip or anything, his only sin was meeting some of them in St Moritz and doing a few runs down the slope. Overall, pretty benign.

Well, one of the losing vendors found out and kicked up a ruckus. My buddy was terminated because he'd brought disrupt on the firm's reputation. He'd brought all of us, each and everyone one of us working there a certain degree of tarnish, and was fired in spite of his stellar performance overall.

The bank just wouldn't accept even the whiff of impropriety. If you weren't squeaky clean 100% of the time, every waking second there was no place for you at our institution.

But the bank wasn't without heart; once back in New York a colleague was in a tough spot - his wife was ill, and his medical insurance had refused to cover additional procedures that the physicians had deemed necessary to save her life. Clearly he was distraught but his supervisor noticed and long story short - the bank paid all costs. Because it was the right thing to do.

Partying like this when there is absolutely no way on earth it could be perceived positively displays a level of arrogance and butt headedness that I find totally inscrutable.

This isn't financial services, this isn't banking, as all of us practice it.
posted by Mutant at 1:06 AM on October 8, 2008 [19 favorites]


dirtynumbangelboy:
"Attrition and cancellation penalties are immense."

But not as immense as not taking the trip at all.

Also: rewarding malfeasance and poor performance with a sweet trip? Makes no business sense whatsoever.
posted by batmonkey at 1:42 AM on October 8, 2008 [1 favorite]


Most of the people who went on this trip were actually INDEPENDENT life insurance agents, who earned this trip as a reward for selling insurance through the year. These were probably the top 50 agents in the country, and WERE NOT employees of AIG. Less that 10 AIG execs went on the trip according to Washington Post. For the independent agents, this trip was a form of compensation for what they had done for AIG. If AIG didn't pay, they'd basically be reneging on their promise to their independent contractors.

How would you feel if you were promised pay, and then didn't get it?

(That said, AIG should have just cancelled the trip and given all the agents cash to avoid this whole spectacle.)
posted by mtstover at 2:00 AM on October 8, 2008


Again, what I said was, we have a general populace that has a complete lack of financial education. I blame regular people for that, and I blame our educational system.

Interesting claim. What is nice is as long as Metafilter is up,readers can go back over the comment record and see who turned out to be right.

Thus the readers will get to see if the people who felt the bailout was not going to achieve the stated goals and therefore a poor plan, or if the frantic handwaving of people calling others idiots because of the handwavers poor understanding of the way of the world was the right call.

"If you want a picture of the future, imagine a boot stomping on a human face -- forever." -- George Orwell .


Given recent history and the current political atmosphere, you'd think they'd be trying to shore up their image, not appearing as if they're pissing on all of us who funded this extravagance. Sure, it's what executives do.

Perhaps it is what 'executives' do. Perhaps the better label is sociopath for these 'humans'?


If bankers can't be trusted,

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.” - Thomas Jefferson
posted by rough ashlar at 3:55 AM on October 8, 2008 [1 favorite]


How would you feel if you were promised pay, and then didn't get it?

Haven't gotten my COLA for the year. They promised it 5 months ago. All the rich people messing with the economy keeps throwing off all the negotiations.

I feel like the rich people are screwing me, again, without caring.

But, please, carry on bailing out the rich. It isn't like I can stop it. After all, the entire crash of the economy is my fault for buying a house without putting 20% down. Had I realized that buying that US$72,000 house was going to have such large repercussions, I would have bought a better house.
posted by QIbHom at 6:06 AM on October 8, 2008 [2 favorites]


Ok I understand rewarding employees that make your company money. EG throwing a big Xmas party or giving holiday bonuses. That is great. Hard work deserves it. I get it but at a time when your company is doing sooo badly that it needed the gov to use taxpayer money to bail you out..... That just screams let the good times roll. Also I understand that certain parts of a company could have turned record profits and this was a way of rewarding that department. HOWEVER when the rest of the company is being flushed down the toilet, shouldn't they use their "Record Profits" to save their own asses?!?!?!?! Seriously it is not the thought that someone did good and got rewarded. This is not about jealousy. It is about the fact that the gov used our collective tax dollars... not on roads, hospitals, education, etc; but they used it to bail out wall street and instead of wall street using it to right the wrong and fix the economy.... they throw themselves a huge party on our expense. These people have no idea what the value of a dollar is.... let alone 700 billion of them.
posted by Mastercheddaar at 6:40 AM on October 8, 2008


Mastercheddar: again, this would have been paid for out of AIG money long, long before the bailout was a twinkle in anyone's eye. These sorts of trips take, at a bare minimum, 6 months to plan. Partly because most of them are rewards for hitting specific sales targets; salespeople need to know what they're aiming for as a reward. Also because a resort like that books up really far in advance; to hold a block of rooms of that size takes between 6-12 months of advance notice at a lot of properties. And that means large deposits. I don't know if AIG does their event planning in-house or hires a third party. If the latter, even larger deposits are out the door at the time of contract signing, which again is a minimum six months to a year before program dates.

Tone-deaf in light of recent events? Maybe. But when a company is hitting the skids, one of the least intelligent things to do is say to an independent sales force: Oh, hey. Yeah.. that thing we promised you? Not happening.
posted by dirtynumbangelboy at 6:53 AM on October 8, 2008


Los Angeles Times:
"The post-bailout getaway for American International Group execs is just one of a series of jaw-dropping revelations to emerge this week about the behavior of some of the companies involved in the financial crisis.

Among other things we now know:

* AIG tried to hide negative information about its condition from auditors before the bailout plan took shape, according to documents obtained by Rep. Henry Waxman (D-Beverly Hills), who heads the House Oversight and Government Reform Committee.

* As early as March, regulators sent a letter to AIG warning the company about its lack of transparency and ability to oversee financial products.

* Just days before Lehman Bros. Holding Inc. filed for bankruptcy protection last month, the company altered its executive pay plan to give senior managers multimillion-dollar bonuses regardless of recent losses.

* Joseph Cassano, the Lehman exec in charge of the company's financial products division, received more than $280 million over the last eight years, according to Waxman. Even after he was shown the door in February, Cassano was placed on a $1 million-a-month consulting retainer.

'This is the new Enron,' said Gonzalo Freixes, a professor at UCLA's Anderson School of Management who specializes in business ethics. "A lot of people probably thought we were past this kind of thing."

We aren't, as is becoming increasingly clear with each new peek under Wall Street's hood. AIG's St. Regis wing-ding is a classic example of the financial industry's misplaced priorities."
posted by ericb at 7:51 AM on October 8, 2008


Mastercheddar: again, this would have been paid for out of AIG money long, long before the bailout was a twinkle in anyone's eye.

Really? So you know when the bailout idea was 1st thought up? And you have copies of the contracts/checks that paid for this trip?

Or are you just making a guess here?
posted by rough ashlar at 7:52 AM on October 8, 2008


"'I was totally unaware that there was any plan for any conference,' AIG's ex-CEO, Robert B. Willumstad, said today during his testimony before the House Oversight and Government Reform Committee. 'Had I been aware of it I would have prevented it from happening.'"*
posted by ericb at 7:54 AM on October 8, 2008


There are times when I seriously want to make people write the following on a blackboard 100 times:

"The existence of free-will does not negate the existence of manipulation or excuse it."

This is one of those times.
posted by Uther Bentrazor at 7:57 AM on October 8, 2008


Washington Post:
“The Tuscan-style luxury resort sits atop a bluff overlooking the Pacific Ocean and features a private beach club with ‘surf butlers,’ three swimming pools and a championship golf course, according to its Web site.

Most of the attendees at the convention between Sept. 22 and Sept. 30 stayed in premium ‘pool view’ rooms at the 400-room hotel, with 47-inch LCD TVs and marble bathrooms furnished with a ‘Deep Roman’ bath and shower. The rate: $375 per night.

The group also booked 17 ‘ocean view’ rooms, at $425 each, and one ‘presidential suite,’ discounted from its usual $3,200 a night to $1,600.

Another $9,982 was spent on food and drinks at the StoneHill Tavern, the Monarch Bayclub, in-room dining and the lobby lounge; $6,939 on golf; $1,488 at the Vogue Salon; and $1,450 on no-show and cancellation fees.

An invoice dated Oct. 3 said AIG still owed the resort $40,543 in charges after a $402,701 deposit.

The itemized bill does not show what executives specifically ordered at the spa and salon, but a look at the hotel's spa menu (PDF) shows 75-minute ‘intuitive massages’ at $215 a pop (most of the executives spent $210 each for a spa treatment on Sept. 25) and men's and women's haircuts and styles starting at $50 and $75, respectively.

Executives also spent $147,302 on banquets at the hotel and $23,380 at the Spa Gaucin, which features three-story waterfalls and a ‘Well of Desires, where symbolically all your cares will be left behind.’

It's unclear whether any of the AIG executives tossed a spare coin in the well.”
posted by ericb at 7:58 AM on October 8, 2008


Orange County Register:
"Appearance, though, is powerful.

'When people hear things like this, it makes it difficult to sell people on a bailout plan,' said Tara Setmayer, communications director for Congressman Dana Rohrabacher, who opposes a bailout. 'Of course the events are planned in advance, but from a PR perspective, it doesn’t go over well.'

Like every congressional office, Rohrabacher’s was inundated with outraged calls and emails opposing a bailout. 'No one is bailing us out!' Average Joes were saying. 'Why should we bail out those Wall Street fat cats?'

(Suggestion to those crafting the next bailout - er, 'rescue' - bill: Consider a cap on expenses as well as executive compensation?)"
BTW -- there are other expenses incurred by the 110 attendees: travel, etc. So, the grand total for this event is much higher.
posted by ericb at 8:05 AM on October 8, 2008


Can I propose a judicial system modification to help us through these tough times? With scandals mounting and taxpayers severely sore in the rectal region already, we're going to lag far behind if we don't come up with an efficient means of dealing with this kind of nonsense. So in that vein I propose:

The MetaFilter Scandal Response Measure: Jail and move on.

Please write to your representatives and urge swift adoption of this time-saving proposal.
posted by rusty at 8:38 AM on October 8, 2008


White House calls AIG spa trip ‘despicable’.
posted by ericb at 10:01 AM on October 8, 2008


Man alive, Marx was right. I do feel alienated from these fucks.
posted by bonaldi at 10:17 AM on October 8, 2008


So, a question: does anyone have any information on when this was planned, what advance monies were deposited, and what the cancellation penalties might have been?

I think these comments assume that the collapse was a surprise to these guys, rather than something they had been covering up for the last few years. I assume the latter, and that makes this kind of well-planned-in-advance extravagance all the more despicable.
posted by Mental Wimp at 10:26 AM on October 8, 2008


by a very profitable division and was a way of thanking the 'rainmakers'.

When I was in industry and did well I got "thanked" with a paycheck and a pre-specified bonus. If they offered me the choice between this get-away with my colleagues and my share of the cost, I would take the cost every time.
posted by Mental Wimp at 10:31 AM on October 8, 2008


Um, because insurance company subsidiaries are required to have certain capital reserves? The NY branch of AIG had enough money to bail out the whole company, but couldn't, because of capital reserve requirements.

Anybody else get severe brain freeze when they read this?
posted by Mental Wimp at 10:35 AM on October 8, 2008 [1 favorite]


Really? So you know when the bailout idea was 1st thought up? And you have copies of the contracts/checks that paid for this trip?

Or are you just making a guess here?


Making an extremely educated guess based on knowing how the event planning industry works, yes.
posted by dirtynumbangelboy at 11:05 AM on October 8, 2008


$443,000 could feed 1100 families of 4 for a month.

OMG! And in Africa it's enough to feed 32,000 families for a year! Look. You missed the point.

We can jump up and down about the internal outrage of the mortgage bailouts or we can put it in perspective. And the fact is most of the outrage is generated by Republican Populism that has been completely absent over the last seven fucking years. Where was all this outrage WHEN IT MATTERED! When we could have done something about this shit before it all blew up in our faces.

Sorry this latest outrage is a fucking petty misdirection away from a systemic failure and the larger responsibility of these same New Populists who six months ago were cheering this shit on.

The fact that we have blown 300 Billion or more in Iraq with almost NO popular outrage tells me that this outrage is nearly all manufactured.
posted by tkchrist at 11:33 AM on October 8, 2008


I think these comments assume that the collapse was a surprise to these guys, rather than something they had been covering up for the last few years. I assume the latter, and that makes this kind of well-planned-in-advance extravagance all the more despicable.

Excactly.

It WAS completely predicted. And this administration and the Phil Gramm's of this world not only let it happen but MADE it happen. And they are still getting rich. They are still transferring public wealth into private hands.

But who we gonna spend all out outrage on and send to jail? Some AIG middle exec who sniffed coke off a strippers tits at a party?
posted by tkchrist at 11:37 AM on October 8, 2008


The fact that we have blown 300 Billion or more in Iraq with almost NO popular outrage tells me that this outrage is nearly all manufactured.
Coke-covered apples in a stripper's vag compared to national defense spending on WMD-seeking oranges.
posted by bonaldi at 11:44 AM on October 8, 2008


Gee, TK, sorry my outrage wasn't enough to stop the invasion of Iraq. I'll try to do better next time. If I'd known that just me being mad about it would fix things, I'd have done more than write about it constantly in my blog, tell all my friends, explain the broken situation to acquaintances, endure constant attacks for my views from rightwingers on community message boards I belonged to, and written my representatives more than the dozens of times I did.
posted by SaintCynr at 11:51 AM on October 8, 2008 [1 favorite]


Zooming out quite a bit, I wonder about the Giant Pool of Money that This American Life has pretty convincingly described as the ultimate root of these wild investments.

Could the main source of that money be the sudden entry of Russia and China into global capitalism? It seems like all these assets that weren't part of the global economy were suddenly capitalized, and the people who got that money instantly had tens or hundreds of billions to invest in safer places.

Can anyone knowledgeable on these things comment? Thx
posted by msalt at 12:47 PM on October 8, 2008


SaintCynrI appreciate your martyr complex on this one but you're wasting your breath. I fucking agree with you okay.

It's not YOU I am talking about. This outrage is set to harness the Republicans, who up until now have been completely silent on the colossal graft of the last seven years. Including preventing the CDO/CDS scam what was obvious to all of us good liberals and the scam that is the Iraq war.

I'm attempting to point out the irony here. Which seems to be lost on you while you scramble to take some sort of dramatic personal umbrage at every comment I make. Chillax.
posted by tkchrist at 12:57 PM on October 8, 2008


A'ight. It's hard to judge tone online. I make mistakes. I was fooled by you quoting me out, and thought it was directed at me.
posted by SaintCynr at 1:07 PM on October 8, 2008 [1 favorite]


“The government does not care about using your money wisely. They care about you paying and shutting the fuck up and having a Coke and a smile.”

That’s total b.s.

We have a choice of Coke OR Pepsi.

Heard something the other day in the film “The Walker” (not bad) - “The rich make money by scaring poor people into giving it to them.”
Just sort of resonated with me. Not that I know much about finance. Just a G.P. thing. But I do know scaring people. Just sort of clicked.

This Economics 101 thing...it’s not the economy stupid.
It’s the “Big Lie.” I mean - remember the S&L scandal? Neil Bush all that. A Bush was at the helm at the time there too.
...why would we think that family wouldn’t be trying to run the same shit now?

Seriously, if some guy named “Miller” robbed your house. And his kid is near your house a few days later, loitering around, smoking and looking in the windows, maybe he’s got a crowbar - you’re going to call the cops, right?

We elected (yeah, we, I didn’t vote for him either but we’re in the same boat) those people again. And again in ‘04.
At some point “stupid” is just to imprecise and small a word.

“If you want a picture of the future, imagine a boot tap dancing on a human face singing ‘Yankee Doodle Dandy’ -- forever.” -- George Cohan.


“The Tuscan-style luxury resort sits atop a bluff overlooking the Pacific Ocean and features a private beach club...”

That is a peach of a shot. I’m just sayin’.
(I’m not suggesting anyone do the math for shooting across that water and get a couple stable boats (with say broad bottoms) and put some 2 x 6s solidly fixed to the gunwales with 4 anchors for a stable shooting surface, that’s crazy. I’m just sayin’ it’s y’know, nice. And they’re gone now anyway.)

“We can jump up and down about the internal outrage of the mortgage bailouts or we can put it in perspective.”

*jumps up and down*
What?
If you’re gonna panic - panic early.

“And this administration and the Phil Gramm's of this world not only let it happen but MADE it happen.”

Yeah. Truth.

Yes outrage. But yes - keep trying. You only lose if you quit. SaintCynr - you’re not alone man.
posted by Smedleyman at 1:58 PM on October 8, 2008 [1 favorite]


We're giving them another 37B, since the first 85B wasn't enough.
posted by cjorgensen at 4:25 PM on October 8, 2008


Psychopathic CEOs.

Nothing, absolutely nothing, that Corporate America does surprises me anymore.
posted by eratus at 5:12 PM on October 8, 2008 [1 favorite]


QlbHom: What do you expect from people who think they are smarter, more talented and wiser than everyone else?
A community weblog?
posted by hincandenza at 5:42 PM on October 8, 2008


No, hincandenza, a community weblog is what I expect from people who really ARE smarter, more talented and wiser. How it ended up attracting losers like you and me, I still can't figure out.
posted by wendell at 6:02 PM on October 8, 2008 [1 favorite]


Nothing, absolutely nothing, that Corporate America does surprises me anymore.

Psychopathy is very profitable, if you can harness its mechanical banality.
posted by Blazecock Pileon at 5:57 AM on October 9, 2008


"But let's go back to the St. Regis. No publicity is bad publicity, remember, which is why the resort is booked solid for the next two weekends, according to the Los Angeles Times. And those seeking a room at the next hot spot on the disaster tourism circuit would do well to immediately call Reservations at the Ritz-Carlton Half Moon Bay further up the coast. It's yet another elegant monument to decadence that sits on yet another bluff overlooking yet another gorgeous strip of the Pacific. And next week, the Ritz-Carlton will also have something else in common with the St. Regis: dozens of AIG executives huddling together in style, whooping it up on another junket of dubious necessity in a time of crisis."*
How do you say "tone deaf?"
posted by ericb at 8:09 AM on October 9, 2008


Tone deaf part deux
"White House spokeswoman Dana Perino yesterday called 'despicable' expenses from the first gathering, a weeklong conference last month at the St. Regis Resort in Monarch Beach. Those costs included $23,000 for spa services, according to Representative Henry Waxman, chairman of the Oversight and Government Reform Committee.

AIG considered buying advertisements to explain its position, only to be told by public relations consultant George Sard that it would be 'a really bad idea.'

'To spend the taxpayer's money on an expensive ad campaign to apologize for how you used taxpayer money leaves you open to further attacks,' Sard wrote in an e-mail to Ashooh. Sard, chief executive officer of New York-based Sard Verbinnen & Co., declined further comment.

President Bush didn't push for the bailout 'to help top executives go to a spa,' Perino said at the daily White House briefing. Hours later, the Federal Reserve agreed to loan AIG an additional $37.8 billion on top of the initial $85 billion.

AIG chief executive Edward Liddy, who replaced former CEO Robert Willumstad as a condition of the federal loan, told Treasury Secretary Henry Paulson yesterday that the company intends to reevaluate expenses. 'We owe our employees and the American public new standards and approaches," he wrote in a letter to Paulson.'
Damn right, "new standards and approaches" are in order. How about teleconferences/video conferences to save money? You can "motivate and educate" your employees and independent agents in very cost efficient ways these days. When you're in a crisis (damn, you almost imploded and went "belly-up"), you need to do things differently. Sacrifice is in order. Thnigs won't be like they used to be. Maybe never again. You should be thankful that tax payers have saved your friggin' asses and jobs. Now, perform in the most cost effective ways possible. Screw bonuses and incentive trips for management until the "ship is righted" and you have consistently exceeded forecasts and economists, auditors and all others agree that your financial foundation is solid. Do your job. Tighten the goddamn belt. And, by all means, don't complain. There are a lot of people without jobs these days who'd be happy to step in, get a salary and benefits. These unemployed workers have families who are suffering, sacrificing and scared. They're willing to do an honest days work without all the frills and bling. Buckle up my friends (not said in the voice of John McCain), you're in for a bumpy ride!
posted by ericb at 8:24 AM on October 9, 2008


Update: Outrage Leads AIG To Cancel Second Luxury Retreat.
posted by ericb at 9:33 AM on October 9, 2008


AIG's lords and lady of the hunt may find themselves under attack after luxury trip
“Four top AIG executives flipped U.S. taxpayers the bird by spending $86,000 on a partridge hunt at an English country manor as the feds gave their struggling firm billions to stay afloat.

The heedless hunters and their guests traipsed through the fields in tweed knickers, firing at defenseless birds and later washing down pigeon breasts and halibut with ‘the finest wines taxpayers' money can buy,’ the London-based News of the World newspaper reported.

There were at least three New Yorkers in the group - Jeffrey Malkovsky, a senior director at AIG's Manhattan office, Hilary James, the general manager of the luxurious Bristol Plaza Hotel, and her pal, John Roberts, who also advises AIG, sources said.

In interviews with undercover reporters, the AIG honchos said they were aware that the markets were crashing back in New York - but were more interested in bagging birds.

‘The recession will go on until about 2011 - but the shooting was great today and we are relaxing fine,’ AIG honcho Sebastian Preil was quoted as saying.

Preil wasn't the least bit embarrassed that AIG, which got its first $85 billion bailout from the feds last month, needed taxpayer money to stay in business. The hunting trip came the week AIG got a second loan of $37.5 billion.

‘We should be on an even keel in two years,’ he reportedly said.

Another AIG executive, Alvaro Mengotti, ‘slurped fine wine’ while dispensing advice on surviving the financial crisis. ‘Invest your money in gold,’ he reportedly said.

The AIG hunting party stayed at Plumber Manor, a 17th century country house in scenic Dorset, southwest of London. In four days, they racked up a $17,500 bill for food and rooms.

Priel and a German businessman identified by the paper as Stefan Nill flew in from Frankfurt by private jet costing another $17,500, the paper reported.

Mengotti flew in from Spain and was driven to the hotel in one of the fleet of limos that cost $8,750, the paper said. Also with them was a client of Preil's identified by the paper as ‘Herr W. Underburg.’

AIG spokesman Joe Norton confirmed Tuesday the hunt happened. He said ‘it was planned months (ago),’ though he admitted it should have been cancelled.

‘AIG's priority is to continue to focus on maximizing the value of the business so we can repay the Federal Reserve loan.’

AIG got spanked last month after it was revealed that top executives spent $500,000 at a swanky California resort after the failing insurer got its first infusion of bailout bucks.

Last week, AIG cancelled another junket to another expensive California resort for AIG agents after word leaked out.”
posted by ericb at 2:48 PM on October 15, 2008 [1 favorite]


The saying "first up against the wall when the revolution comes" would be a lot more meaningful if the revolution were to ever come. But, nooooo, it seems that Marie Antoinette is going to be the first and last.
posted by five fresh fish at 4:56 PM on October 15, 2008


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