Bailouts and bonuses

March 16, 2009 12:21:40 PM PDT
First, thank you to those who wrote in, offering sympathy for our colleague and my partner, Liz Cho, whose father died on Friday morning.

He was eulogized yesterday and was buried today, and our thoughts and love are with Liz and her family tonight.

I will make sure she gets your messages when she returns.

Now on to tonight's 11 p.m. News. The economy remains issue number-one, and quite a display of public campaigning by the White House. The Federal Reserve Board Chairman goes on "60 Minutes" last night - a rare occurrence for a Fed Chair - and predicts that the recession could end by year's end. He did NOT say things would turn around; only that the worst should be over by year's end.

Not exactly fantastic news - it means, after all, that there's more bad news and more plummeting to come. But it's a turnaround from the Obama Administration's recent gloomy forecasts, and seems some kind of attempt to find a light at the end of the very dark economic tunnel.

And then the President took center stage. At an event focusing on small businesses, he pushed the nation's banks, which have received billions in taxpayer bailouts and loans, to ease credit for businesses.

Then Mr. Obama went after AIG, which has had $160 billion (and is now in business only because of $130 billion or so) in taxpayer bailouts. Turns out that AIG has paid out $165 million in bonuses.

"Under these circumstances," said the President, "it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?

"In the last six months, AIG has received substantial sums from the US Treasury. I've asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole.

"I know he's working to resolve this matter with the new CEO, Edward Liddy, who came on board after the contracts that led to these bonuses were agreed to last year.

"This isn't just a matter of dollars and cents. It's about our fundamental values.

"All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses. And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules. That is an ethic we must demand."

Tough talk. Will it be followed by tough action? That's the big issue.

Meanwhile, New York Attorney General Andrew Cuomo is also immersed in this controversy. He gave AIG until 4 p.m. today to answer his questions about which executives got bonuses, and how much. And if the company doesn't answer, he'll go to court to force them.

Corporations have insisted the bonuses were used to keep key executives on board (right -- and where else are they going to go, with the economy like this?), and because of corporate confidentiality.

We'll have the latest on the controversy, and the economy, tonight at 11.

Also at 11, our investigative reporter Jim Hoffer with the fascinating story about a local women, fired from her job because of something she posted on one of those networking chat sites. She talked about her long hours and the lack of overtime, and her boss apparently didn't like that. She and a co-worker were fired. Is this freedom of speech, or is the employer within his rights? Jim has an exclusive report tonight.

We'll also have any breaking news of the night, plus Lee Goldberg's AccuWeather forecast, and Scott Clark with the night's sports. I hope you can join Sade Baderinwa (in for Liz) and me, tonight at 11.

BILL RITTER


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