MAKING SENSE (kind of) OF THE BAILOUT & BONUS PAYOUTS

Perhaps Americans have simply given up when it comes to being outraged over bonuses and the amount of money given to each failed financial institution. I mean, think about it. We've gone from being shocked and pissed off 8-12 months ago to making little noise over the fact that failed financial institutions are now giving their executives record bonuses. We've essentially lost interest in making any real demands on the firms and executives that collapsed our economy (as I outline in a series of posts on the TARP bailout, AIG, and the Great Depression here, here, and here).

I don't know if it's "Outrage Fatigue" or if the transactions that our failed financial institutions made are simply too much for our increasingly ignorant society to grasp. Whatever it is you know something is wrong when the poster child of our nation's collective ignorance - Sarah Palin - is drawing record crowds for a self-serving book riddled with innuendo, campaign complaints, and other gossip that have people who once liked her rather unhappy (when does McCain finally throw her under the bus?).

Anyways, as I pointed out in March, it appears that we're using AIG as the front company to pay out billions in cash to firms who might otherwise have had to declare bankruptcy. This, in turn, has allowed them to pay 100 cents on the dollar for all the terrible contracts that they created and then insured. With contracts made whole by the U.S. taxpayer firms like AIG are now paying themselves the bonuses for their market genius.

Who's making this point, besides me? Try the Office of the Special Inspector General for the Troubled Assets Relief Program (SIGTARP; for a fun review of how this mess will come back to haunt us, click here).

In their report, "Factors Affecting Efforts to Limit Payments to AIG Counterparties" (page 20; pdf page 24) SIGTARP makes it clear that after we made AIG whole they were able to fully compensate their partners in financial crime. The following list provides the total amount that AIG was able to pay several of their "counterparty" hooligans after they sucked the American taxpayer for over a hundred billion dollars.

Like I said, I'm not sure why no one seems indignant over these payouts but it seems to me that Sarah's book tour is much easier for Americans to focus on than the market criminality currently going on.

I'm sure there's a WWE wrestling match I can go to where it will all make sense ...

- Mark