Featuring new fiction from Ken Brosky and author authors, as well as occasional political commentary whenever something really important happens. But mostly fiction.
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Why is everyone so surprised by AIG's large bonuses being paid out? Is it just because the cable news companies found something they can focus on for a week to draw in ratings? That must be it, because none of this came as any surprise to me or anyone else I know. Well, anyone who doesn't glue their eyes to CNN every day.
The fact of the matter is this has become the norm. Executives are promoted through corporations and receive compensation packages and bonuses from boards of directors who are usually connected in some way to those very same executives. What happens next is simple: lots of money is paid out. Lots and lots and lots, and thanks to the low low low low low tax rate for the wealthiest 1% of Americans, there's really no point in NOT taking all that money. We've reached a point where executives at large companies typically make about 200-300 times more than their lowest-paid workers, even their middle management.
When AIG saw the opportunity to swallow up its competitors, it did so. It did this by taking advantage of lax regulations and regulators--like those appointed by Reagan and Bush Jr.--who didn't actually FEEL LIKE regulating anything. Thus, AIG became "too big to fail." That means they can swallow up taxpayer money to pay off their debts, and they can reward themselves for doing so.
It's borderline terrorism, isn't it? After all, if we DON'T bailout AIG, our economic system reacts just as it did when Lehman Bros. failed, only on a much larger scale. But if we do, the executives who took on the toxic investments "promise" to stay put only if they keep their money.
Here's how to fix the problem:
1. Enforce the Sherman Anti-Trust Act.
2. Create new tax brackets for the mega-wealthy to encourage top-down investment.
3. Regulate investment banking so the toxic mortgages problem never comes back. Then, make sure regulations are staying up-to-date with the changing economy.
Here's why it'll never happen: ideology.