Moses Kagan's Aurora Borealis

The current headline on NYTimes.com is: "$50m in AIG Bonuses to be Repaid".

While Congress fulminated, Andrew Cuomo, NY's Attorney-General methodically obtained the names and gains of the AIG bonus-babies.

When the CEO, Edward Liddy, asked the bonus babies to return 50% voluntarily, Cuomo said it wasn't good enough.

Now comes news that 9 of the top 10 bonuses (and 15 of the top 20) have been voluntarily returned in full.

It's difficult to over-state the importance of that headline to Obama Administration, which seeks to turn the page from the bonuses to rescuing the banks. My guess is, Cuomo's quick action will have earned him some serious chits from the president.

But what of the jerks who have so far refused to cough-up their ill-gotten gains? I assume they're mostly foreign, and therefore don't believe that they have any obligation to American tax-payers.

So how about this: Let's ban each and every one of them from entering the country until they return the money, with interest. No Broadway shows, no vacations in Miami, and definitely no jobs requiring travel to the US. My guess is, the money comes back quickly and quietly.

Labels: A.I.G., bonuses, Cuomo

David Brooks is shocked (shocked!) that "..the Obama budget is predicated on a class divide... All the costs will be borne by the rich and all benefits redistributed downward."

Listening to conservatives, it's as if the past eight years never happened. They begin their argument from the position that the current balance of tax burdens is somehow right or fair, then call Obama a socialist for trying to re-adjust the balance.

But we've just had eight years where the rich disproportionately benefited from changes to the tax code. Inequality is up to levels last witnessed in the 1920's, in large part as a result of the richest Americans paying a far lower share of their income in taxes than has been the case for most of the preceding 50-100 years.

Here's an interesting anecdote from Warren Buffett: His marginal tax rate is lower than his secretary's, because his income comes from dividends and capital gains, and her income is from salary. That's just not fair.

For a while now, we've lived under an increasingly regressive tax code imposed by a Republican president and congress. Obama is just restoring the balance.

Labels: Obama, politics, tax

Have had a lot of conversations recently regarding the fate of this country. Can we recover? Will things be the same again? Is this the end, or the beginning of the end, of American economic pre-eminence?

I'm not an economist and this isn't really the forum for macroeconomic theorizing. Let's talk instead about who we are, as Americans.

We are proud immigrants or we are the descendants of proud immigrants. We or our ancestors looked around the desperate refugee camps and benighted villages of our homelands and thought "there must be something better." We or our ancestors awoke one morning and, leaving everything known and comfortable behind, set off to America to make better lives for ourselves and our families.

What kind of person leaves everything he has known for his entire life, the geography, the society, the family, in search of gain? Who dares leave stability behind in favor of opportunity? A risk-taker.

We Americans are risk-takers. And we have created a society that encourages and rewards risk-taking. Has this gotten us into trouble? Of course it has. We have gambled on home prices and obscure financial instruments and we have lost.

But we are fundamentally undaunted. For every house-flipper ruined in this latest economic disaster there is, or soon will be, a vulture investor looking to buy foreclosed assets and re-position them for profit. For every insolvent bank there is an investor syndicate measuring the distressed assets for bargains. And for every failed company, there is a laid-off employee eying cheap office space, used computers, and under-utilized ex-colleagues and thinking, "Screw it. Maybe now is the time to see if I can start something."

So while I'm not really in any position to comment on the direction of key macro-economic indicators, I can tell you this: There is an energy there, an almost primal force relentlessly focused on profit and opportunity and willing to take risks to make it happen.

There are deals to be made. There are companies to be founded. Even now, in the midst of our common disaster, the seeds of recovery are being planted. I can feel it.

Labels: economy, foreclosures, risk-takers