This is my first "blog." It will be an introspective yet crude attempt at communicating the thoughts and figures of an accountant in DC.
First thing is first, some reflections on the current economic situation and the news of the day: AIG bonuses... It seems incredibly popular to rant about bonuses on 'Wall Street." Politicians here in town are certainly jumping on the polticized band wagon and even the Republicans are abandoning trickle-down principles.
I was watching CNN this morning and they were essentially blaming AIG as a major proponent of the housing "meltdown." Simply ridiculous. AIG had nothing to do with promoting or selling bad mortgages. They were insuring what appeared to be relativly safe assets, the mortgages themselves with what were called "Credit Default Swaps." A swap is a relatively simple investment vehicle.
AIG has profitable, productive, product lines / divisions. Why shouldn't they be able to pay bonuses? Or at a minimum fulfill contractual obligations? If the government starts meddling in contractual obligations that were agreed to before the bail-out funds arrived, that is a legal precedent we don't want to even entertain for a moment.
If we the people want and need AIG to survive, they need qualified individuals to run the company. Bonuses are a market derived compensation vehicle that should not be limited by political whims.
Finally, New York state is suffering enormous budget deficits due in part to a lack of revenue that is normally obtained through taxing Wall Street bonuses. Bonuses that are spent on cars, clothes, and fine dining. It's trickle-down Reaganomics at its finest...
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