Congressman Ron Klein Statement on AIG
Posted by WARREN MOSLER on March 18th, 2009
Hi Ron,
Add this?
But let me add that it’s our fault. We make the laws and the regulations. If anyone violates the laws there are prisons waiting for them.
If they acted within our laws, however flawed, it’s our responsibility to alter those laws to serve public purpose as we can best determine.
Therefore, while addressing the current injustices will be pursued with the full force of the law, I will be moving just as forcefully to alter existing law to remove the incentives that encouraged this outrageous behavior, and put in additional safe guards, along with appropriate supervision, to ensure public purpose is served by our corporate structures.
All the best!
Warren
Statement of Congressman Ron Klein, as prepared for delivery
Hearing of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises
“American International Group’s Impact on the Global Economy: Before, During, and After Federal Intervention” Wednesday, March 18, 2009
Thank you, Chairman Kanjorski, for holding this important hearing.
I am disgusted by the deplorable saga of AIG, and I join my constituents in their unfettered outrage about the millions of dollars in bonuses that are being awarded to AIG employees.
The American people understand that we are going through a difficult time, and are prepared to sacrifice and work together to get our country back on track. But they will not stand for taxpayer dollars being lavished on bonuses for people who bear responsibility for this crisis, and neither will I.
When I am back in my district in South Florida, I talk to people who have lost their jobs. Who have closed the doors to their small business because they can’t get a loan on reasonable terms. Who have lost their health care, or their home, or their pension and retirement savings.
Yet here I am sitting across from the AIG Chairman and CEO who is distributing million dollar bonuses to those who drove company in the ground. There is a tremendous disconnect between South Florida and the executive offices of AIG.
I just want to know one thing. What were you thinking?
I look forward to the testimony, and a frank discussion today.
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March 18th, 2009 at 1:52 pm
“Therefore, while addressing the current injustices will be pursued with the full force of the law, I will be moving just as forcefully to alter existing law to remove the incentives that encouraged this outrageous behavior, and put in additional safe guards, along with appropriate supervision, to ensure public purpose is served by our corporate structures.”
Safeguards? Supervisions? Just how many people’s lives and souls are we going to throw at this huge rube goldberg supervisory contraption you want to grow exponentially? Ron Paul says gold money fixes a lot of this and with that people can drink carribean rum on thier superboats all day insted of spending their lives watching numbers all the time.
Now the colleges say they need to teach better ethics to their MBA’s because self preservation wasn’t enough incentive to keep all the lemmings from going over the cliff.
Adam smith is rolling in his grave spinning about his invisible hand!
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March 20th, 2009 at 4:20 am
The RFC acquired voting control of Maryland Casualty in April, 1934, when we first bought preferred stock in the Company. At that time we sent Silliman Evans to Baltimore to take the presidency of the company and Edward G. Lowry, Jr., of our legal department, to be its vice president and special counsel, each being elected as director. Mr. Evans later became chairman of the board…. When we got into the company, the situation was so much worse than had been represented that we felt it necessary to replace the management.
http://books.google.com/books?id=iH3qPAAACAAJ&dq=jesse+jones+fifty+billion&ei=OOS_SfrANZWwkATS4NXJBQ
For political reasons, Jesse Jones often toyed with the salaries of corporate management, especially if they were, in his mind, “over-paid†Wall Streeters. Jones and Roosevelt knew that RFC loans always had the potential of political troubleâ€â€Âstirring up liberal Democrats and progressive Republicans who were blaming businessmen for getting the country into such an economic mess. Salary reductions were one way of showing that RFC, even while it was pouring billions into private business, was not enriching corporate management. Amendments to the RFC Act in 1933 required Jones to certify the appropriateness of the salaries paid by every corporation accepting loans and investment money. Jones devised a declining scale of salary reductions. Corporate management receiving annual salaries of $150,000 or more would be cut to $60,000, $100,000 or more to $50,000, and other reductions accordingly.
The more things change, the more they stay the same.
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