President Barack Obama vowed to the American people Monday that the insurance industry, and particularly the American International Group, will be stopped in every way legally possible from paying out this “recklessness and greed” to executives.

“I do want to comment on the news about executive bonuses and AIG. It’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay,” said President Obama at an appearance to discuss the pain small business’ feel during the recession. “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 U.S. Treasury,” said Obama.

Obama asked Treasury Secretary Timothy Geithner “to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole. [...] Secretary Geithner has been on the case, he is working to resolve this matter with the new C.E.O., who, by the way, came on board after the contracts which led to these bonuses.”

Obama spoke kindly of Mr. Liddy, but negative on the regulatory power associated with dealing with numerous financial products and instruments created by the current financial industry, calling for “overall financial regulatory reform and some form of resolution mechanism for [protecting American taxpayers and our financial system.]”

Representative Barney Frank (D-MA) also spoke Monday, suggesting that the millions in bonuses being paid out by A.I.G. amounted to “rewarding incompetence,” and concluding “These people may have a right to their bonuses. They don’t have a right to their jobs forever.”

 Print This   Email This