Houston, we have a problem.
On the one hand, Ryan Grim at the HuffPo reports, we got corporate execs so convinced of their own magnificence that they don't think the fact that they destroyed the world economy is any reason for their exorbitant pay to be cut. (Via Digby)
Even if the U.S. government were to entirely take over American International Group, company executives would still be able to collect bonuses at taxpayer expense, according to a letter from AIG CEO Ed Liddy to employees disclosed in the company's recent SEC report.
"As this special award is being made to a very select group of executives, I ask that you treat it as confidential," wrote Liddy. The letter is dated less than a week after the government first bailed the company out.
The letter assured the select group that "in the event the AIG entity that is your employer (the Company') experiences a Change in Control (e.g., consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the sale or other disposition of all or substantially all of the Company's assets to an entity that is not an affiliate of the Company), AIG guarantees the payment of the 2008 Special Cash Retention award on the dates and under the conditions specified above."
Liddy promised there was more to come. "I fully recognize the devastating loss of personal wealth you've suffered, and pledge to you my personal commitment to provide an opportunity for substantial wealth creation through a combination of cash and equity awards in the coming months and years," he wrote in the letter to employees outlining the bonus policy.
(emphasis added)
"Devastating loss of personal wealth"? Yeah. The rest of us are only losing our homes, jobs, health care and shit because of the crap these guys pulled, but hey. As Digby put it:
I think this pretty much sums up the problem. Corporate narcissists believe they should be rewarded even when the organization they run has not only failed but has nearly destroyed the entire global financial system. They are very, very special. Besides, they suffer a lot from the embarrassment at having been involved with such unpleasantness and that is punishment enough. It is for the lesser people to lose everything they have.
When Bush called his reign "The Ownership Society" I don't think anyone understood exactly what he was saying. Now we do.
Speaking for myself, I knew exactly what he was saying and said so. It wasn't all that hard to figure out if you were listening with your brain instead of your outstretched hand, the one that was mindlessly waiting for all that money the right wing kept promising was going fall out of the sky if we just let the corpo's do whatever they wanted.
President Obama announced today a series of measures to shut down offshore tax havens and end provisions that U.S. companies have used to underreport overseas profits, steps he said would provide a financial boon to the U.S. treasury.
In remarks at the White House, Obama said, "We're beginning to restore fairness and balance to the tax code," and he called the steps "a down payment" on the broader tax reform he promised during last year's campaign.
The reaction from the multinationals was, to say the least, rapid and predictable.
Many U.S. companies with overseas operations say the measures would effectively raise a U.S. corporate tax rate that is already far higher than those in Europe and other parts of the world. The U.S. Chamber of Commerce issued a statement today opposing Obama's plans.
Of course they did. And it's typical of corporate thinking that they imagine that halting their tax evasion is the same as a tax hike. This is like a burglar arguing that he should be able to collect unemployment if the police arrest him because they've eliminated his job.
Look, I would be thrilled if I thought Obama meant it but he doesn't. We know he doesn't. How do we know? Well, first off, just 2 years ago he voted to create one of the very offshore tax shelters he now says he wants to revoke. He stumped for the atrocious Panama trade deal, a Bush "treaty" that turned Panama into a tax haven.
Economist and investment/globalization specialist Peter Riggs of the Tax Justice Network, which describes itself as an outfit devoted to “combating tax evasion by corporations and the rich”, took a good long look at the Panama trade deal. After noting that the Panama and Peru deals have been considered “relatively non-controversial and will probably pass”, he explains that the deal with Panama has nothing to do with trade.
Indeed, the proposed bilateral trade agreement with Panama has skated through without much attention at all. But the agreement with Panama is highly significant. The problem is, the trade agreement with Panama isn’t really about trade. It’s about foreign investor rights, money laundering, and tax dodging. And the United States should in no way reward this notorious offshore tax haven with a “gold star” Free Trade Agreement.
But it did and Obama's support helped. So what's changed? Nothing. Obama's mind, maybe. Because of the deficit he faces? Weelll...
Even if that's true, this smells of the beginning of another long faux-populist Dem Kabuki in which Obama reaps all the benefits of appearing to oppose the corporations that are destroying the country knowing all the time that with Harry Reid's BD Senate at his back, he'll never actually have to carry through on any of his anti-corporate rhetoric.
We've been here before. Looks like we're going there again.
Comments