Barney Frank Puts Code Pink in Their Place

Here is a great clip of Barney Frank telling Code Pink to “grow up” during today’s House Finance Committee hearings.

It’s about time someone shut them up.

In Defense of AIG Bonuses

While I’m sure at present, the idea of defending American International Group (AIG) isn’t exactly the most popular on either the left or right. However this is one of those issues where I think passion has superseded common sense, and some perspective might fruitful.

A few points:

First, let’s remember that AIG never actually went into bankruptcy proceedings, instead allowing the United States government to become a majority shareholder in the company, taking ownership of 79.9% of their assets.

Look at this from the role of shareholder: would you want to have the company you’re invested in revoke contracts that were designed to keep your talent on board, during an especially difficult time? If you were in fact a shareholder, and saw that it had the potential to yield a return with the right people and incentive, I would hope you’d say yes.

The government claimed when they made this investment that they thought it was going to have a positive return on investment for the American people. How do they expect that to be the case when the people working at the company are having one of their biggest perks stripped from them?

Second, staying on the same topic, it’s important to remember that bankruptcy is one of the legal protections a business has to get themselves out of the potentially crippling contracts without having to go through a sea of red tape and individual legal proceedings.

Just as is the case with any company, AIG had the option to file bankruptcy, go into protection and remove these contracts. However, the United States felt that AIG was too big to fail, and decided that instead of letting them go bankrupt, they would give them the money they needed to continue doing what they thought was needed to become solid again.

Third, do people actually believe that AIG would be able to employ quality people without having the ability to give them something to sweeten things a bit? If you’re someone who actually understands the credit market and has the knowledge that could save AIG, odds are if you’re not receiving the right sort of benefits package, you’ll just going to go elsewhere (especially in this economy).

Those who orchestrated this deal both in New York and Washington have all worked for institutions like AIG at some point. I am quite confident that if they weren’t receiving bonuses when they were with those companies, they too would have gone elsewhere.

While the media has had a field day with this, I find it extremely troubling that the government is coming down so aggressively on AIG for a practice that involves bonuses that are renewed annually, yet is unwilling to speak out negatively against union contracts held by the auto industry that often yield more benefits, FOR LIFE, and yield no positive return for the company.

The government is creating a slippery slope here by now threatening to come in and take this bonus money back, particularly when they’re talking about tracking down the individuals who received the money.

The government has no place telling companies that they cant honor contracts that were established prior to their investment. If they want to do this, they’re going to have to write a new slate of contract law, or use their majority power to drive the company into bankruptcy. However, when you’re the United States government, odds are regard for the law is the last thing you’re paying attention to. Public opinion and approval rating, however, is another story.

This is going to get worse, I promise.

If you thought Sarbanes/Oxley was a business killer, wait until you see what extreme regulation they’re going to come up with to try and prevent the unknown in the future.

Marketing on the Bailout

Now this is a great way to play off of current events!

In this commercial, Dominos Pizza has used the bailouts and stimulus package to their advantage by poking fun at the process, and selling pizza at the same time.

This is definitely smart advertising.

250 Potheads, $1.2 million seized? Something sounds Phishy.

This is an interesting story that I came across on Reason.com (first reported on rawstory.com).

According to police officials in Hampton, VA, during the first set of shows for the Phish reunion concert, police claim to have arrested 250 concertgoers, collected $68,000 in cash, and recovered over $1.2 million in narcotics.

While I have no problem believing that police arrested 250 Phish fans and confiscated over $68k, I have an extremely hard time believing that 250 potheads could have $1.2 million of ganja… even at a Phish concert.

Lets do the math on this. If you have 250 people arrested, and $1.2 million worth of drugs are seized, that yields an average of $4,800 per person arrested. I’m sorry, but I’ve been to my share of Phish concerts, and I don’t see how it would be realistic for any person to have even $2,000 worth of any drug on them.

But this is where it gets even more interesting:

Hampton police made “81 Felony arrests and 113 Misdemeanor arrests for a total of 194,” stated an advisory. “There were 119 Felony charges and 126 Misdemeanor charges for a total of 245. A total of 46 criminal summonses were issued. A total street value of narcotics seized was $1,213,882.80.”

In the state of Virginia, possession isn’t a felony, regardless of the number of times you’re caught. In the case of the Phish concert, it seems likely that these felonies were all the result of selling, which in Virginia, only becomes a felony if you’re selling more than a half an ounce.

While I could create a variety of breakdown scenarios, I haven’t been able to come up with anything that would yield a net police seizure of $1.2million.

I’ll be interested to see the final police reports in more detail to see how far off these numbers actually are.

Card Check to be introduced today

From CongressDaily:

Democrats will introduce contentious labor legislation in both chambers today even though Senate Democrats do not yet have the support necessary to overcome a certain Republican filibuster.

This is all going to come down to the Blue Dogs in the House of Representatives. Those 51 Members, all self-proclaimed conservative democrats, have the power to block this in the House.

Obviously, there will be more updates to follow.

Even Warren Buffett opposes Card Check:

And a concise commercial regarding the legislation: