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October 10, 2008

What were they thinking?

Posted: 12:28 PM ET

Senior Writer Jeff

Last month, you and I bought a 79.9% stake in the insurance giant AIG. It wasn't really at the top of my wish list, but the government says we needed to do it. So, we spent $85 billion for a bankrupt company. Sounds like a great deal. Since then. the government has told AIG it can have tens of billions more if it needs it. Wonderful.

ALT TEXT

Yes, we could all use an island vacation right about now.

Some economists say this could turn out to be a good deal for taxpayers. Ummm. ok.

But there's clearly a huge disconnect going on between AIG and it's new owners-us. When you and I are facing tough financial times. we consider where every penny is going. AIG executives just went on a $440-thousand dollar luxury retreat. Their defense: they wouldn't have been able to get their deposit back.

But they weren't done. They had another one planned next week. And even when it became clear that the public would be furious if they tried that again, they didn't just call it off right away.

Here's what we didn't have time to tell you on the show. and this is where it gets really mind-blowing:

According to Bloomberg News, executives at AIG considered launching an expensive ad campaign-in other words, spending even more taxpayer money-to explain why these retreats are important. Their PR consultant sent them an email that all but smacked 'em upside the head, saying that would be, "a really bad idea."

At least someone is thinking. The retreat is off.

What do you think of these shenanigans? Even if we do need to bail out all of these companies for the good of the economy, do you think they'll ever get it? Let us know.

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Filed under: Your Money


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Brian   October 10th, 2008 1:14 pm ET

Tar & Feathered with the rest of the crooks!!!

j,c.   October 10th, 2008 3:46 pm ET

They should have to repay all the money.It sure would be nice if we could all take vacation like that but we are just trying to hold on and live day to day.

Joe Sixpack   October 10th, 2008 4:07 pm ET

Why is it that these guys wont just call whats going on what it is? Its not a lack of liquidity... its broke. They should quit trying to sound so educated in a matter that they clearly can not control.

I'm tired of being told where my money is going to end up and then seeing absolute failure, or blatant "pork spending."

John NC   October 10th, 2008 10:54 pm ET

Please Congress, sinch my tax dollars closed in a purse closed thighter than a frogs tail. Its gonna be tough, but lets get it on.

kristi   October 11th, 2008 6:05 am ET

i love this show,every morning ithe first thing i do is turn on Robin!!

Darryl Etcher   October 11th, 2008 7:22 am ET

Who is taking responsibility?

Reminds me of children let loose in a candy store.
Someone has to say "No" to them in a way they clearly understand; such as taking away their "Toys" or "Sending them to their room (jail)".
Until this happens there will be more "Children" in more "Candy Stores".

Allen in Hartwell, GA   October 11th, 2008 8:07 am ET

These people (and many others like them) remind me of others in history who have continued to feed their gluttony while the masses were threatening to burn down their castles. The middle class is so far beneath them that we don't matter. The only thing that will get their attention is when they have to pay for their crimes and lose their amassed wealth.

Wesley C Walker   October 11th, 2008 8:18 am ET

545 people run this country. 545 resumes need to be prepaired. Republicans have had control of congress all but 2 out of the last 14 years, Democrats haven't done any better over the last 2. Robin Williams said it in a movie and I don't know if he came up with it or a writer. Don't really care, it is as accurate as anything else I've ever heard. "Politicians are like diapers, they need to be changed often and for exactly the same reason". Vote out ALL encumbants.

Sophia Lanza   October 11th, 2008 9:18 am ET

I am so tired of all of this. These terrible people keep trying to put the blame on us, the American people. They keep saying "we are all to blame." That is absolutely ridiculous. My family is low-income. We have a new baby girl, and only one income. We were struggling. Now we are barely scraping by. We did not go out and by a home with no money. We did not buy an SUV we can't buy gas for. We share one car, we rent an apartment and we live within our means. But, we can't buy groceries! We have no health insurance. We have no retirement, not a dime in the stock market. How is this my fault? There are thousands of Americans just like us and we are sick of this. AIG CEO's and "high earners" need to be fined and stripped of their pensions to pay for this "bail-out." They need to be jailed for fraud along with all the other big bank and lenders who put our country in this situation.

JENNIE NEALY   October 11th, 2008 9:26 am ET

McCAIN YOU WILL MAKE GOOD JUDGEMENT BEFORE YOU PICK SOME ONE UNDER INVESTGATION BEACAUSE TRUELY PALIN A LIER, SHE RACISM,SHE NOT A GOOD LEADERSHIP,SHE ABUSED HER POWER I TROOPER CASE,NOT EO SID ALL THE NEGATIVE ATTACK ON SEN.OBAMA/BIDEN JUST IMPEACH SARAH PALIN THAT THE BEST THING YOU CAN DO.ABUSING POWER? BY THAT MAVERICK? SAY IT AIN'T SO SARAH PALIN,IT'S OVER FOR THE WHITE HOUSE ATTEMPT. SARAH,WE DON'T WANT THE SAME ABUSE OF POWER AS BUSH/CHENNEY.

Ha, Ha, I knew it.POOR McCain, he should have kept lie-berman.
Wonder how they are going to try to spin this one.

Now I see why the republicans were trying to throw so much dirt at Obama, they figured if they hit Obama from all directions Palins troopergate violations would not look all that bad. WRONG, this is terrible and if you had not been slinging mud at Obama people would not be so happy to throw this back at you McCain.

Exposed ,PHONY, anti-american this is a new republican low. she deserves it all. WATCH OUT FOR A REPUBLICAN OCT. SUPRISE NOW!!!!!!!

If Sarah Palin lacked credibility before, she now has a credibility deficit!

Obama-Biden '08! OBAMA/BIDEN-08 SOME ONE WE NO WILL PUT THE COUNTY 1ST.

Melissa   October 11th, 2008 10:11 am ET

I am very disappointed in the candidates for signing this bailout. When I heard AIG gave employees and spa day, it made me sick! If you want to turn this country around and nothing the government is doing is working, you need to pull out at least 350 billion from the banks. That bailout isn't helping us as Americans...Nothing that is being done is helping! Once again, the rich get richer and you sell it to us average Americans that it will help us in the long run when we need credit. We have done our part as Americans, but this government is running us into the ground. You want to fix the economy and gain every American's support, try giving $100,000 to every taxpayer over 21 and see if that doesn't turn this economy around. Make most of it vouchers that can only be paid to mortgages, car loans, credit cards. I don't understand why all the bailouts just give money to the establishments that get themselves in trouble. We bail them out and the American people do not directly benefit at all. I think we should help companies out of financial ruin from the ground up. Why not give the 700 billion (or large portion of it) directly to taxpayers as incentives. We in turn, pay off our credit cards; pay down our car and home loans; invest in our future and put the rest into the economy. Not only do we benefit, but the banks benefit as well. It's a win, win! The banks end up with the money, we end up in a better financial position and everyone is better off rather than just the banks. If the American car companies need bailout, give Americans cash vouchers to only buy American-made cars with more incentives for hybrids. If airlines need bailing out as they did in the past, give Americans airline vouchers. I think we need to consider these indirect bailouts that help everyone instead of just rewarding companies and institutions that get themselves in a financial mess. It's time we help the American people first!

susan rivera   October 11th, 2008 10:33 am ET

Make them give ALL THE MONEY BACK! SEND THEM TO JAIL! If a group of everyday citizens had one breathe involvement with something like this they would be in jail forever. Fraud is fraud,stealing is stealing, they ALL need to be investigated, just like the guys from Enron.

Bill Fritz   October 11th, 2008 10:57 am ET

AIG one of the biggest insurance companies in the united states among other things it insures mortgages (PMI); I believe this is the main reason for their bail out. I do not favor government interference in free market. Government intrusion into the market place has accomplished what no other government could; the destruction of our capitalistic society and is now replacing it with socialism. In case everyone has forgot this is the same ideology that our country has been fighting against for the past 200 years. The belief in “We the People” has been replaced by “your government knows best”.

Phil   October 11th, 2008 12:03 pm ET

I feel if the company officials continues to waste our money, then we let go of the executive team. They obviously had abused company funds in the past which could be the reason for their trouble (ya Think). It is difficult to swallow one retreat, but a second one would have to be a deal breaker. If they wish to treat some one to a special moment, have a great turn around and make the controlling stakeholders some much needed money.

Ben Claassen   October 11th, 2008 1:39 pm ET

A fresh start on Monday at CNN et al reporting of the money crisis may do a service to the nation. The news has been working overtime to fuel the fires of the burning of billions through Wall Street greed. The news is much less worse than what you keep reporting, though there is a problem. Here in the Big Easy, we run on a different business and fun cycle, and I am not seeing the bad news you keep pushing. Bad news invites people who were doing fine to stop spending. That leads to layoffs and creates a bigger problem.

Case in point– last night Bourbon Street had a very good Friday crowd having fun and freely spending money– finally like pre Katrina. Last Monday, the Saints played on Monday night, the house was full and most people drank their usual 3 to 7 beers and eat freely even with beer at $7 per big cup in the sacred dome.

Much of the money being spent kept moving since a beer vendor or a bar tender and even more so, a great house musician, get a dollar -spend a dollar. They have no money for stock accounts, 401K's and big loans. That is where the money needs to go to get it moving–to working people who live by the day.

The past 8 years have had more money going to rich people who invest, make big deals and spend a lower fraction of their big incomes, so money does not circulate. It is not surprising that huge flow of money for foreign oil pulled money out of the economy and made a major crash in money to the small people.

So yes, there is a recession. It is very similar to New Orleans. When asked by visitors, “How is the city,” I can say it is great. Many others feel the same way. But for those who still have not replaced their home, have lived on less income and are still trying to get out of the Katrina hole, things are still bad. On the US scale the unemployed, the recent foreclosed due to being unemployed and the low income working poor have the hardest time and need help. Buying bad debt at the top will not stop the cycle. Reporting sad stories with no help for people to understand the hope of a new job, makes the cycle go faster.

So have a great Monday.

gina   October 11th, 2008 6:59 pm ET

I think the heads of these companies truely should have the pensions and retirement and bonuses for years of service cut off. Plus they should be held to paying back the money they recieved while taking advantage of so many american families just trying to live and reach an american dream of owning a home. SOMEONE approved these risky purchases and business practices that may not be illegal but are completely immoral. These guys made money and got obscenely rich over the last few years and now that the US economy is on a swift downward spiral they are still sitting pretty with no worries. Too many families are trying to figure out how to feed the family because of the greed of a few and this is wrong. Now we sit and watch as the world markets start to slip right in behind us. Please find away to make these company heads feel the struggles they have subjected so many families too. They should give back the money they borrowed from the government and seize the assets of these Rich SOB's.

Jutta (Steil) Epperly, Wichita, KS   October 12th, 2008 8:22 am ET

I am outraged at what these CEO's are able to get away with. They stole from us, let them go to jail. "King" George (by the way, he should be impeached and also go to jail) borrowed the bailout money from oversees and hence our America is no longer owned by the people. I say, what are we working and paying taxes for? Let us revolt against a government that is bought and paid for by the special interest groups. It started at the turn of the 19th-20th century when our industry began to boom, however immediately the government started inacting more and more laws, and mandated the schools to educate/train a large herd of sheep. Kids were taught to be compliant, not to question decissions by the authorities, and not to make waves. Is anybody out there still thinking for themselves and wanting a free life that their ancestors immigrated for? The laws are increasing exponentionally and the government seems to own us and our thoughts and actions. America, speak up, deamand your country, your jobs, your social security money, your freedom and your vote back!!!
Don't allow the greed that has filtrated from the industrial giants down to our president, the congress and the senate to turn this beautiful, and once wealthy country into a third world nation. All you sheep out there, wake up, fire those that steal from, take back your jobs and your country and vote for change. The past eight years turned a nation without debt, into a nation owned by the rest of the world. Go out and vote for a new beginning!!!!

Brian, Detroit, MI   October 13th, 2008 2:51 am ET

What if we all showed up for a shareholders meeting and voted out the current leadership? Since they have absolutely no idea what is going on in the world right now. And since they were the ones who brought the company down in the first place.

Brian, Detroit, MI   October 13th, 2008 2:54 am ET

Seems to me we need to shack their noses with a rolled up financial page and rub their noses into their own mess.

Bob in Minn.   October 13th, 2008 7:30 am ET

These people are criminals and should be put on trial and sent to jail. If you or I committed acts like this we would face serious actions. I am so sick and tired of the wealthy in this country just raping the people. My wife and I are middle class people who earn around 100-120k a year, and we are paying in thousands of money in taxes for crap like this. Why not bail my family or anyone of my neighbors out. I am in construction and got laid off a month ago and probably won't be able to get a job until next April or May. If we are just going to throw money around, how about throwing some to the people who need it.

dave   October 13th, 2008 8:59 am ET

they should take the money that these crooks got in the golden parachute. then once it's all collected give all that money too the people expet the rich and give it too then. the people who need it not the the people who have it.

karen andrews   October 13th, 2008 8:59 am ET

why don't you report on how much cheney is making on this bail out, or on the war isn't it illegeal for the vice prez. to profit while making things tougher on us? do you think blocking the border between Iraq and Kuwait preventing locals there from delivering gas @ eightteen cents a gallon so Haliburton could deliver it for a dollar thirty cents a gallon has any effect on our gas prices? karen

Jason D.   October 13th, 2008 11:01 am ET

I just think this speaks volumes on how this mess happened. The rich don't seem to care that they are pigs, fat on the work of the middle class. I'll give you a piece of advice, piggy, mind the starving masses, I hear they love bacon. : )

LARRY   October 14th, 2008 1:39 pm ET

WHEN CLINTON HAD MOMENT OF MORAL MIS-DIRECTION, THEY IMPEACHED. GEORGE W. HAS BROUGHT PEOPLE TO THE POINT OF DESPERATION....AND EVEN SUICIDE. HE'S NOT BEING HELD ACCOUNTABLE FOR HIS ACTIONS.

LIKE SOMEONE STARTING A FIRE AND ATTEMPTING TO PUT IT OUT IN ORDER TO LOOK LIKE A HERO! HIS DAD IS SO ASHAMED HE'S NOT EVEN BEEN SEEN COMMENTING ON IT.

John Not from Cincinnati   October 15th, 2008 9:03 am ET

It would be wise for we Americans to realize that we have met the enemy and he is us! WE collectively wanted to kick somebody's butt after 911, we didn't care who, it did not have to be the people who did it, just some rag heads. So, WE did it, and spent a tone of money and lives to do it. NOW, after WE all wanted our houses to be worth well more than they were and that WE could ALL buy houses we could not afford and everything else we wanted and as cheaply as possible. American products too expensive – fire them and let's buy stuff from China. Unfortunately, now the gravy train has come to a halt. We are hardly making anything any more, our car companies are failing, Americans are losing their jobs, etc. Now WE want another scape goat. It is THEM (whoever they are) and not US! Well, it is US! We elected these people, we frequent these banks, we buy the China goods, it is US! WE need to change our ways and get back to being Americans who the world wanted to be like rather than being selfish Ugly Americans who the world shuns. Let's prosecute all those who broke the law and lied to us, but then WE have to change our ways and start to support ourselves, buy American!!! Our future is in OUR hands, not in theirs!

Wells Smith   October 16th, 2008 8:00 am ET

The bailout, whcih I did not support ... I cannot believe these people are going on "retreats" ... They should be doing their "retreats" in a federal prison.

And can anyone give me a figure of the monies the heads of these companies received in their "Golden Parachutes?" They were to have "curbed" outgoing salaries ... Can anyone define, "curbed?" That is, put a number to them?

Rusty the carpenter   October 16th, 2008 8:24 am ET

It may be time for me to become a plumber since $250,000 a year is about three times the amount of any of the other trades for even the best craftsman in those trades, at least in Ohio... :)

Robin love your attitude and your pretty face in the morning, even when I can tell your a little sleepy!

Frank K   October 16th, 2008 9:00 am ET

As part owner how many seats/votes on the board do we get?
Who will be our rep another one of the people who put the company/us in this position? What a scam this whole "bailout" is the only people who will and have benefitted from this are the greedy people who caused it

Sarah,Houston,TX.   October 16th, 2008 9:45 am ET

Why isn't this type of spending behavior a crime? They're spending my mother's and father's retirement fund! They're stealing from my family to hunt?! They can do that here for free,provided they buy their own amo. Enron got the ax for this kind of crap,why aren't they?

cheryl faile, conway, sc   October 16th, 2008 1:08 pm ET

Make all those idiots that received the bailouts and abusing them PAY THE MONEY BACK and see just how far they will go to hide it again, don't they know that people are watching every step they are taking,
It is a crime that should be prosecuted to the fullest extent as far as i am concerned. The CEO AND EXECS DON'T WORK 24/7 or 365, they only come off the golf courses or other sports when they absolutely have to. Let them pay the workers that made their company survive and the little stockholders that paid their retirements before they ever receive a dime of compensation.

Kim   October 16th, 2008 4:10 pm ET

I can only say that I am so glad not to have insurance with this company. It is such a hassle to get new insurance and I would have to switch after the way they wasted (OUR) money. I hope that all Americans that have insurance with this company takes their business elsewhere since the government isn't going to do anything about it maybe (WE) can!

Wrongfuly Blamed   October 20th, 2008 7:52 am ET

No they wont get it. Because in there eyes the Government is the reason they are in this in the first place. seeing how Bill Clinton forced them to Make bad loans in the first place. then some how the media plays it up that this is the republicins falt. Hmmmm. Blame it on the republicans so we can get our rock star Demacrat Obama in the white house. wel i dont buy it . these company's are just spending this money that they feel they are intitled to because the American people let Bill clinton force there hand and cost them billions

Veronica Wyckoff   October 20th, 2008 7:57 am ET

How can anyone act so suprised that we are in such bad shape? For heaven sakes, us normal people, the ones that do all the hard work for little pay, knew what was comming years ago especially when they started laying us off and sending our jobs overseas. These fat cats think we are stupid but as far as I'm concerned I think they are stupid for expecting us to put up with them. I was told by one of my employers that the workers were not the most important ones in the company that it was the investors and this was the reason that they have to cut back on employees and we had to work 2-3 times harder to make up for it. As far as I'm concerned these people have hurt this country badly and its all put down to one word..GREED

Michelle O'Bryan   October 20th, 2008 8:13 am ET

They can go on all the retreats they want to ... when AIG is the one footing the bill. If it is being paid for with taxpayer dollars then absolutely no retreats, hunting trips, spa days, massage therapists etc.! If AIG execs feel the need to "get away" then they should spend the money in their own wallets....that's what I have to do. Their arrogance in this matter has infuriated myself and alot of American Workers!

Angi   October 21st, 2008 9:06 am ET

The bailout was such a joke. If they wanted to throw money out they should have sent it to the taxpayers first. AIG should have been allowed to go under just like any other business. We do not get bailed out when we spend too much!

mary   October 21st, 2008 9:28 am ET

why weren't people on SS included in the stimulas package. They are are limited income.And could use SOME stimulas!

Nancy B   October 21st, 2008 10:48 am ET

The executives that took a 440 million dollar vacation on the (tax payers money) bail out funds should be charged with embezzlement and fraud and put in prison!! I think we should clean out all the "fat cats"

Elizabeth   November 5th, 2008 7:07 am ET

No, I don;t think they will ever get it. It will be business as usual once the dust settles. It is amazing how quick the government acts when they want to. Unlike the red tape the average citizen has to go thru when seeking any type of assistance from our government.
I resent them bailing out the banks at a cost of billions and billions to us the tax payers. Who is really going to benefit from this, not us the
average taxpayer, the banks will not lend money at reasonable rates.
They will continue to rape people with high interest rates on credit cards. They have made little or no effort whatsovever to help the average person hold on to their home. It has been and always will be about the almighty dollar. They do not have to account to anyone about anything. Pure and simple greed.

Danny   November 11th, 2008 10:50 am ET

This thing about AIG really burns me up. I am self employed and pay my taxes, to see my tax dollars going to bail them out and to see what their doing with my money and other taxpayers money is "as i see it" unforgiveable. Let them go under, it wont effect me, I cant even afford health insurance. I need an operation on my right foot for a bone infection in my little toe before it spreads to rest of my foot. I am a productive taxpayer, I would like to stay that way but, "where is my bail out???

Brent Lantzy   December 10th, 2008 10:21 pm ET

I can realize the importance of bailing out the automakers, seeing how many taxpaying jobs spin off the industry. But an insurance company ? And their first in line ? I think they have sharp people on board who know how to turn a buck without conscience.

AMBER   December 27th, 2008 8:45 am ET

I THINK THAT IF THESE KNUCKLEHEADS CAN GET A BAILOUT, I SHOULD GET ONE TOO!!!!!!!!!!

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