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Taxpayers Fund AIG Lawsuit Against US
AIG, now infamous for their executive bonuses, has decided that the $200 billion they received from the government is not nearly enough and is suing the government for the return of $306 million in tax payments. "AIG is effectively suing its majority owner, the government, which has an 80 percent stake and has poured nearly $200 billion into the insurer in a bid to avert its collapse and avoid troubling the global financial markets. The company is in effect asking for even more money, in the form of tax refunds. The suit also suggests that AIG. is spending taxpayer money to pursue its case, something it is legally entitled to do. Its initial claim was denied by the Internal Revenue Service last year."
Obama says "blame me", which is political-speak for "screw you, it's done, get over it". He won't be saying "blame me" when the honeymoon is over and this escalates to a full scale popular revolt.
We KNEW AIG were crooks long before we gave them this money. Why did they do it? Where the fuck was the outrage when these bailouts were first suggested? I've been outraged since the beginning, because the whole game plan has been obvious to me since they robbed us of that first $700B. And yet polls suggest that Americans STILL think this is going to work somehow.
These people: the Congress, the President, AIG, are all just a bunch of god damned frat boys, scratching each other's backs and doling out our tax money to each other in such staggering volumes that it WILL be the end of this country if we don't stop right now.
Did you all catch Chris Dodd saying he had nothing to do with the change in the bailout legislation to allow these bonuses, then the next day saying oops, that was me. "Somebody should have caught it sooner" - yeah, right, if the bill had any chance of being reviewed by the legislators themselves, let alone the public, before if slipped past Obama's desk quicker than a greased turd. What happened to those 5 days, huh?
Seriously people, at what point do we get off the couch and take back this country? Obama can stimulate my ass.
Whether they are spending money directly from the bailout or spending capital they already had (and thus spending bailout money elsewhere), the tax payers are funding it.
Whale
May I suggest the "GTFO" tag?
Today's XKCD seems particularly relevant. There's bigger things to worry about right now. This is a silly distraction -- like the whole "earmarks" thing.
What as stupid article!!
The US government, although the largest shareholder is not the ONLY shareholder. Minority shareholders have rights and a successful lawsuit benefits them too.
I wish people would give their heads a shake!
Are these guys intentionally trying to force Congress to shut them down? Too much more of this, and economy or no economy, lawmakers are just going to say "Fuck you, die die die" and let the international banking system take a nosedive.
I have been (somewhat) onside for giving Wall Street a helping hand, but between the sheer incompetence of the Democrats and the sense of entitlement of these guys, I think it's time to say "Screw it", let them all sink, and then rebuild it properly, with laws requiring all bonuses be voted on by shareholders, all executives and managers be forced to convert their stock to non-voting, requiring complete replacement of any company's board and senior executives the second they take a single penny of taxpayer money, and putting their legal departments under direct Treasury control.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Tru-Value states there has been a run on pitchforks.
I'm not in finance, but this half-ass measure of injecting money into AIG seems, well, half-assed. We should either have let it fall, or nationalize it outright and sell it off piece-meal (or whole). Grab a (semi)patriotic Gordon Gecko and put him to work - we don't lack Gordon Geckos, do we?
Maybe?
Fuck systemd. Fuck Redhat. Fuck Soylent, too. Wait, scratch the last one.
There was a great article in Rolling Stone today that lays out exactly what has happened at AIG in terms most people can understand. It makes my blood boil!
-- Give me ambiguity or give me something else!
First the bonus payments and now this. Do these people think that taxpayer money grows on trees?
This space left intentionally blank.
no good deed goes unpunished....or in this case, no bad deed isn't followed by more bad deeds.
I wonder if it's a bit too late to do a "stop payment" on that 200 billion dollar check...(not to say that the majority of the big banks can afford even that).
The income tax system has become so complex with so many loop holes the not even the Treasury Secretary could master it. The problem of tax loss selling in particular is set to explode. Time to replace it with something much simpler like Fair Tax.
AID has mastered bad press. If it were really true that "no press is bad press" then they have gotten a bargain. No way they could buy this coverage for a few $100 Million. All I have heard this week is AIG this and AIG that.
Sad thing is I think this is one time when bad press is REALLY bad.
Think Deeply.
If there has ever been a time for a corporate death penalty, it's right the fuck now.
There is a war going on for your mind.
We should set a new rule. When a company asks for .gov money to be bailed out, the top 5 layers of the company should be fired. No exceptions.
This is just beyond belief.
It shouldn't be. I was just thinking earlier that I was glad that media storms like AIG blow over slashdot, and I can get different news here then the stuff everyone else is talking about.
This has absolutely nothing to do with tech or nerdiness, and in the grand scheme of things, it isn't that important. I can see no redeeming value, and I hope in the future that /. manages to avoid being run over by "big" stories like this.
Say that as you're getting your pink slip.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Really, this all boils down to a physics problem. If we could see what would have actually happened had AIG been allowed to fail, we could either just let them fail, or point out how horribly terrible that world would be. As it is, we get to experience all this fun.
The real fun begins when someone makes a clear statement of where the billions went. As it is, AIG benefits from attention getting focused on a million here and a million there (it doesn't make the millions any less galling, but damn it, they are tiny problems compared to the rest of the money involved).
Nerd rage is the funniest rage.
Sometimes bias is better than trying to be objective about something completely ridiculous. Call a spade a spade and get it over with.
Buckle your ROFL belt, we're in for some LOLs.
It's Stuff That Matters. I would presume that most of the people here to pay taxes, so I would presume they have a vested interest.
upon the advice of my lawyer, i have no sig at this time
If the government is the majority shareholder, can't they vote to stop the lawsuit?
It sounds as if the government is suing itself!
Beny
"I'm a humble person really,
I'm actually much greater than I think I am"
Slashdot have a relatively behaved and intelligent average poster (at least compared to most other public forums); and this is a subject of great personal interest. Further more the forum structure maintained by Slashdot is good at ensuring the debate not get filled with rubbish (much). So all in all I say I find these types of "non-tech" news refreshing and stimulating. :)
The Long Now Foundation
That's essentially what is happening. The holders of AIGs debts are the real beneficiaries of the bailout. Instead of bankruptcy where they would fight for the scraps of the carcass, they are receiving 100% payoffs, some from the bailout dollars, and some from the ongoing liquidation of AIG assets.
Nerd rage is the funniest rage.
Perhaps we should discuss rising income inequality in the US? Or the wars in Darfur? Lots of stuff is worth discussing, but I think having some focus on forums tends to make them a bit better.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Don't blame AIG for trying to get their tax money back (perhaps the only money here that is rightfully theirs), or for paying their employees what is contractually due to them. Blame our politicians for bailing them out instead of allowing their failure.
Sounds like a classic case of the Aesop: The Farmer and the Snake.
During the fridge winter months, a farmer happened upon a snake frozen upon his grounds. Taking pity on the creature, he took it into his home to warm it by the fireside. Perhaps he realized they eat the rodents who would dig up his crops, and thus provided a dire function. Perhaps it was just the plain goodness in his heart. As the snake warmed itself and became animate, it leapt to forth and bit the farmer. As the farmer lay in pain (perhaps poisoned) he cried out, "Why have you bitten me, snake?!" I do believe the obvious answer was "Duh, I'm a snake."
Demented But Determined.
I hardly consider hundreds of millions of lost dollars to be "distractions." They are smoking guns in the middle of a warzone. Men are being murdered, but since there is death everywhere, there is no crime being committed? Wrong. Sloshing their poison in with the water does not make any of it right. Politicians and CEOs are stealing hundreds of millions of dollars and they are not in prison right now. If I stole half a million from a bank, I'd be in irons. These men should be locked up for life, not simply laughed about and told "no no!" because their horrific (yes, "HORRIFIC") crimes against our society are drown out in as much noise as they can muster around it.
I am the richest astronaut ever to win the superbowl.
I'm with parent. If I had mod points, the "flamebait" mods would be flowing like water...
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
Mathwise, u r right that 100 million is a minor distraction. However, you miss the big picture. The economic mess was caused not by lazy americans maxing on the credit card, but the cowboy behaviour (if not crimminal)of aig execs (and their counterparts at other financial firms)
what will help the economy is to change this culture, and part of that is changing the compensation culture on wall street ; the point is that the bonus are undeserved and un necessary (these guys wanna walk, go for it - lots of unemployed people we can pickup cheaP) and that the bonuses are part of this culture.
Based on nothing more than this rant, you've made yourself a friend and fan today. Let's call it a movement, nay, a revolution!
Nope, I'm not joking.
How are you going to support tech, without the money tied up in these banks? When these companies went belly-up, so did the stocks of IBM(tech), Dell(tech), Cisco(tech)... Tech can't innovate without investment; and there can't be investment without money. Also, many IT's have lost their jobs, or suffered cuts in salary, due to this mess and the fact that their tech companies' investments were wrapped up in this debacle. This problem is so huge, you could talk about it on epicurious.com and be justified.
Because a bunch of slashdotters are wondering why they can't buy any new tech at work (if they have a job still) or at home. No money, No Job, No Tech.
The only change I can believe in is what I find in my couch cushions.
The problem I have with bonuses is that they are given to people who helped AIG fail. What kind of sane employment contract allows failure to be financially rewarded?
Err hello, yes AIG is largely owned by the Govt, but does that mean it now must STOP being a responsible company?
You mean they were responsible up till this moment? Ok.
Because we desperately need something to fill the time between now and the BSG finale.
First of all, it looks like it's happening anyway so saving AIG isn't worth it.
Second, AIG was to protect the mortgage originators from the borrowers defaulting. Well, that's happened. And instead of the mortgage originators taking the loss, AIG is. In other words, the systemic losses are being concentrated at AIG. What I'm saying is that letting AIG go bankrupt wouldn't harm the system. The losses would just be spread over the system and individual banks and partners would be taking the hit. It's a zero sum game right now. AIG is irrelevant; except for the bonus that tis executives say they deserve. I say let'em die. It will have no net effect on the economy. The damage is done.
They weren't bonuses - they were retention contracts. AIG didn't want everyone to jump ship so they offered retention contracts to key people. It's a VERY normal thing to do. The dollar amount may have been crazy - but they were NOT bonuses.
-Tolerate my intolerance
I'm curious how damage is being done to the company in loss of good will. I certainly wouldn't be surprised if the outrage caused by this lawsuit alone didn't cost them much more than $300M. I'm not sure whether the whole fiasco will cost them more than $200B, probably not, but I know many people who won't do business with AIG ever again if they can help it. Sometimes money grubbing is a bad business move.
Honestly, how did *anyone* not see this coming? For anyone that thought that the bailout was a good idea (and by anyone I mean anyone, regardless of political party or leanings), you're getting what you deserved. Unfortunately you're dragging the rest of us with you. What did anyone expect to happen? We took businesses with a *proven* failed operating plan, and gave them more money to "keep on keepin' on." We rewarded bad decisions and then all of a sudden, the still operating failure of a business (surprise!) keeps on making bad decisions and burning through capital faster than it takes it in. I know this is a logical fallacy, but damn! you had to be stupid to not see this coming. Anymore I just chuckle at the absurdity of this whole situation... we're getting what we asked for. I can't blame AIG for this, it is doing exactly what it has been doing-- f*ing up. But when we give them free money to keep on doing it, you can't blame them for thinking it might actually be good business.
Exactly why they should have been allowed to fail
So the gov't calls a shareholder meeting, replaces the board, and the new board quashes the lawsuit. They own 80% of the equity in the company. The government can do whatever it wants with AIG because it owns them.
Why is this lawsuit a big deal? Or rather, why does it still exist?
Advice: on VPS providers
to be followed by a complete lack of action.
They are robbing us blind because they know we won't do anything till we're starving. At that point, they can just take the money and run.
Holy shit can't believe you got modded troll.
"President Obama said Wednesday he'll "take responsibility" for AIG executives receiving controversial bonuses while the company took $173 billion in government bailouts."
I'm sure that since he has taken responsibility for the bonuses, Obama will personally repay the American taxpayer the $160+ million dollars.
Oh wait, this more like that other type of responsibility that Rumsfeld took for the crimes committed at Abu Ghraib, where the guy responsible doesn't face any consequences. Rumsfeld didn't do jail time for Abu Ghraib, low level soldiers did.
A *normal* bear market loses 50% of the prior rallies gains. In a normal bear market we would have fallen from 14,000 to 7,000.
You can see the downward momentum is draining out on the long term charts.
The ultimate bottom is about 4500.
People will talk very darkly but it will happen and then we'll start a long term uptrend. There have been many financial panics before.
However- we can JUST as easily take away these bastards bonuses as they are taking away our pensions and the unions contracts. The fact is AIG was bankrupt.
I think the way they are doing it is unconstitutional- we'll see. A better way would be the mind numbingly through IRS baseline audits with maximum fines for every place where their taxes were incorrectly paid. And a promise to continue those audits on an annual basis for the next 6 years unless 75% of the money was turned down.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
... does this have to do with my rights online?
I agree that this is AIG actually trying to be a business that is responsible to its shareholders.
It is actually, now more then ever, in the government's best interest for AIG to make every attempt to go after any and all money it can, from all sources.
People were ticked off when they viewed AIG's actions as SPENDING money. Now they are ticked off when AIG is trying to GET money.
Public perception is a b*tch
[disclaimer: I am not a fan of AIG, and I believe that all upper management should have been fired without severance packages. I just think this particular uproar is a case of "everything the bad guy does is evil"]
If they wanted to , the US gov. could still pass it to a vote amongst the shareholders and being that the US now holds something like 75% of the votes, could vote against the lawsuit and kill this before it starts.
I mean at what point to you say this turd is cooked? Move them to bankruptcy court already.
You mean they were responsible up till this moment? Ok.
Lets not over-generalize here, looking at this whole issue unemotionally (yes that's hard I know, we're talking about accounting here, a very contentions topic) if you borrow money from someone you will use every method at your disposal to pay it back, including by offsetting previously unsettled amounts.
If you lent me $10 last week and now you borrow $20 from me am I wrong if I only pay you back $10?
Come on let's try for a moment to remove the emotion from this topic (yes that means you also moderator), and remember that the people working over at AIG are actually PEOPLE. Lets exclude that top few percent of (failed) execs who got the company into this position sure, but it could be my neighbor, your school mate, whoever who is left with the actual work of getting it out of this mess!
Anyone who has every worked in a big company knows exactly how hard it is to continue justifying those 50+ hour weeks you're pulling for your stupid manager when the company gets some bad press that reflects on your hard work! What needs to be advocated is more management change in AIG, not blaming Joe Plumber's neighbor because he's a good tax accountant working for AIG!
I gave up my mod points already assigned in this topic because it was clear nobody was willing to discuss the other side of this, hopefully some of the moderators left out there want to see some balance.
There's a known solution to this problem. In the 1980s S&L collapse, the Office of Thrift Supervision established the rule that S&Ls taken over by the Government couldn't sue each other or the Government. It just burned up legal fees, since the money came out of the same pocket. Congress needs to enact something like that this time.
I believe it was Bush who created the bank bailout. Now I don't like the bailout ether way but you can't blame Obama for something that was already law before he became president. You can however point fingers at him all you want over the second bail out, but that one wasn't for the banks aka AIG.
Wouldn't it be cool if us regular people could sue to get our taxes back.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
Maybe this argument holds SOME merit, but it totally turns an eye to the BIGGER PICTURE. The one you are claiming WE all are missing. Sure, these people were "legally entitled" to this money via contracts... guess what happens if we let it go. All of a sudden, all of those bailout companies executives start writing up contract addendums for their piece of the pie before the floor potentially falls out from under them. If we give them this option, they simply won't care. They walk away with more money than I will likely see in my entire lifetime, snug in the fact that if the economy collapses, they could never have to work another day in their life. No compulsion to save their company... just let the country/world end because it "it won't affect me!". And by letting these "bonuses" through, we would be asking for it to happen.
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
If the US government owns 80% of the company don't they have some control? Can't they tell the CEO to drop the lawsuit and if he refuses just replace him with someone who will?
Which is why the correct way of handling this would have been to declare AIG bankrupt and have a new government-owned company take on its liabilities, its assets, and its staff. When they became employed by the new company, they would have new contracts which did not reward spectacular failure. Of course, there's nothing stopping the government from asking for the money back, and then enacting this when the company declares bankruptcy...
I am TheRaven on Soylent News
Can we please just execute those boozes for treason or being criminally stupid? Please? Heck, at this point, I'm in favor of rounding up every one of their board and share holders that voted for this had beheading them and mounting them on sharp stakes right in front of wall street.
Can you tell that I'm just mildly upset?
Seriously, if you have a sick and injured animal, you try to help it recover. But if that animal is deemed unfit to coexist with people and other animals... like food aggression, attacking people, or literally biting the hand that feeds it...
Well, that animal needs to be put to sleep.
It's irrelevant what the $$ amount is, if the sole purpose of the company now is to keep sucking money into it's expenditure hole and apparently tossing back up this kind of behaviour.
Even if the company survives the economic issues we're living in, would the company itself be viable as a service company, given the kind of image/pr suicide it's been committing?
Forget about too big to fail. Let's start looking at companies that are too tained/corrupted to be allowed to succeed.
Winged Power Photography
Cluestick: beside the fact that the bonuses are peanuts compared to the bailout, beside the fact that the bonuses were added *back* into the bailout by Congress, beside the fact that the bonuses are probably required by the employment contracts... the heart of the matter remains that AIG should never have been bailed out!
Do you think that these bonuses act as a reward for their management's bad behavior? Then what the fsck do you think the BILLIONS of bailouts are? It's a big giant signal to the financial market that no matter how big of a mess you make, the taxpayers will still bail you out. It's called "moral hazard", when markets have a disincentive to reduce risky behavior. We had a mild climate of moral hazard before the crash, but the bailout has pushed it over the top and into absurd extremes. The mismanagement of AIG has was not met with a market rejection, but with a huge 200 BILLION government reward.
When you praise your dog for shitting on the rug, don't be surprised that he keeps shitting on it.
We shouldn't be angry at AIG, they are only doing what we have trained them to do. We should be angry at our congressmen and past/current presidents for wasting 200,000,000,000 on tawdry corporate whore.
Don't blame me, I didn't vote for either of them!
Majority owners can't actually do "whatever they want" unless they actually own 100% of the company. The trouble here is that the 20% minority owners are something of an annoying fiction--- the company is by rights bankrupt and the shares worthless, but the government has unwound this mess somewhat ineptly and as a result on paper the company still exists and has value, and 20% of that value is owned in the private sector by people who technically the company has a fiduciary duty to.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
It's just like the story of the grasshopper and the octopus.
All year long, the grasshopper kept burying acorns for winter, while the octopus mooched off his girlfriend and watched TV.
But then the winter came, and the grasshopper died, and the octopus ate all his acorns. Also, he got a race car.
Is any of this getting through to you?
The 1929 stock market peak wasn't reached again until about 1955, and a consistent upwards trend didn't even start until 1942.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Just because something is legal, doesn't make it right.
Basicly, letting AIG fail would not just crash the American economy. It would crash the world economy. As in NO MONEY IN THE ATM crash. As in NO FUEL FOR YOUR CAR crash. It might cost billions, but the alternative is far worse. Think Zimbawe. They have been allowed to grow too large to fail, and there is no way out of it except to keep them alive until they can be split up and sold.
Actually. You set up a National Commercial Bank, wholly owned by the government, not the FED. Then you let all the fucked up banks fail. All insured funds/accounts are transferred to the NCB when a bank collapses. You let the creditors fight over whatever assets the banks had.
The credit supply to the economy continues under the NCB. The fucked up banks fail as they should. Everyone is happy.
Deleted
If the gubmint is the majority owner, and there is a duty to act in the best interest of shareholders, how the hell can AIG sue the government? They are suing themselves!
...
All against people who broke now law, people who were LAWFULLY owed the money.
Correction: people who were CONTRACTUALLY owed the money.
There is a whole lot of difference there.
And they are still getting their money. AIG is fulfilling their contractual obligation to pay bonuses. It just so happens that the US Government is increasing its tax rate on large bonuses from companies that have received significant government funds.
The recipients, being US Citizens, are LEGALLY obligated to pay those taxes.
The difference between Contractually and Legally obligated is pretty simple. Breach of contract is a Torte, a civil suit in which someone may be required to pay damages. Refusing to pay taxes (in most cases) is a federal offense, which often results in someone being required to pay damages, putative fines, and possibly jail time.
If AIG refuses to pay their contracts, they can be sued. If the Bonus Recipients refuse to pay their taxes, they can be jailed.
This is nothing new anyways. Anytime the good of the people out weighs the contractual rights of an individual, the State wins. Eminent Domain, as crappy as it is, has existed for a lot longer than Obama's term in office.
In any case, that whole line is off topic. The court case isn't about the tax on bonuses. Over the last 12 years AIG has been using questionable accounting in order to reduce their tax liability. Over the last few years the IRS has begun monitoring some of these questionable acts and has decided to close some of the loop holes.
AIG is suing because they think their their tax liability at different times over the last 12 years is different than what the IRS thinks it is. Which is something they are legally entitled to do and has absolutely no relation to the Bonus tax plan that is in the Senate now.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
... .....
You know, I'm the last person in the World you'd expect to expect feel anything decent about a corporation. I'm a communist, think all big business owners should be thrown in jail (well, besides than the fact that I'd like to see all jails abolished, but that's another matter), have zero respect for Obama's cruise missile liberalism - or liberalism in general...
But Jesus Fucking Christ. Even Bill Gates gives money to African charities so he can believe he's going to heaven. Even auto company executives tell themselves they'll ultimately helping the economy by laying off thousands of workers. Even those who don't actually give even a theoretical shit about others pretend to for PR reasons.
"What the fuck?" is all I can say.
Property is theft.
And without a resolution to the current political crisis in Pakistan, Pakistanis won't be able to get their tech industry going again. Nearly everything is related if you really stretch.
I'm not saying these things aren't worth discussing, just that it isn't really Slashdot's core competence. I participate at multiple discussion forums for precisely the reason that I do find many things valuable to discuss. But I don't really debate AIG bailouts at Slashdot, and I don't really debate the merits of OpenOffice at DailyKos.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
We need to get the Federal Reserve under control.
For all the claims of wanting a more transparent government this is the best place to start. Hell the thing isn't even transparent or mostly answerable to Congress.
The fact remains hundreds, if not thousands, of American banks are fine. Better yet it the position of America's credit unions - who by the way are going to be ruined if Congress gets its way because they are trying to force the same loan rules on them that got banks into trouble. Essentially forcing them into making bad loans so as not to be declared discriminatory. Sorry, I want my credit union to discriminate against those who cannot financially uphold their end of the deal. People should not get a pass of responsibility just because they are politically favored class.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
I'm guessing you were gonna cash in on a 50k+ bonus from AIG?
Would it have been better to allow AIG to fall into chapter 13, break every contract anyways, and assassinate the worlds' equity markets? Unique situations like this require unique solutions and the president is doing a damn good job so far of fixing what was retardedly allowed under Clinton and Bush (i.e. the securitization of high risk debt, reinsured to be investment grade securities).
What happened earlier is Mugatu got a hold of the financial system (crap wrapped in tin foil sold to the queen). This whole asset class came out of no where fast and grew to monstrous proportions. As these assets devalue it takes the bottom out of the entire system. High finance is a small world - everyone knows everyone and people who understand what happened are needed to fix it. You are clearly not one of them.
The underlying problem is not one of conspiracy theories. Its one of plain responsibility. Execs need to fix what they broke, not profit from their breaking it, and step out once they've fixed it. How do you get them to do that? reward them when its done.
Perhaps a better idea would be to halt the bonuses (let them accumulate) until the system is back on its feet. People that perform well fixing the thing will get their payout... after all is running smoothly again in a few years. Step out early? no money.
Read what I mean, not what I wrote.
Honestly, I'd go more for embezzlement here. Willful misappropriation of funds and all that. Fine them at least the money that would have been paid out as bonuses, or just fine them their entire share of the stimulus package and let them rot.
I think it would be a lot better than the current idea of abusing the government's power to tax. This would at least allow some due process, and without creating an incredibly dangerous precedent that would effectively allow arbitrary taxation for just about any purpose.
LAFWULLY != MORALLY.
And like it or not, moral outrage has a place in public discourse.
At the very least, the moral outrage can be tuned, so that there is popular support for massive regulation of the banking and insurance industries (ok, I'm daydreaming now).
At the very least, I'd expect to see populist support for laws limiting executive compensation... and possibly a bill or two including the same. Of course most likely it will be political posturing, and stricken from any bill that does get passed...
The primary purpose is not inciting people against AIG execs... the purpose is to incite popular support for populist measures the likes of which we haven't seen since the 30s.
I hope it's successful.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
What is this modded +5 insightful?
I've read the parent post a dozen times now, and it makes less and less sense every time I read it.
The president and congress have no problem inciting mob rule and violence? WTF? You honestly believe that? Exaggerate much?
We have a president going on a comedy show, doing town hall meetings, because he is continually trying to stay in communication with the people... you know... that mob that SHOULD rule the country.
About "disingenuously declaring shock"... he has to for political reasons of course... but if people were being intelligent about this, we wouldn't care.
170 million is a drop in the bucket, is standard business practice, without the bonuses AIG despite having money would cease to function, as its employees would leave.
I keep hearing "why are we giving bonuses to people that caused the mess". AIG's employees caused the mess? Really? They were doing what everyone else was doing, and what was working very well for a very long time. If they didn't do "what caused the mess" they would have been fired.
This is very similar to the IT sayings like "no one every got fired for choosing IBM" "or microsoft", etc.. it was standard business practice to do what they were doing in almost every major financial institution.
Is it risky to base your entire IT structure on one vendor controlled platform? Sure. Do people do it anyway and stay succesful? Yup.
It is hard to pickup all the nuances of your post, due to your limited language skills, so I doubt I understand most of your ranting...
Sounds like someone needs a waterboard...
"Not an actor, but he plays one on TV."
Failures on the part of our politicians do not constitute a justification for evil on the part of AIG.
"Not an actor, but he plays one on TV."
Comment removed based on user account deletion
Perhaps I don't understand what "ownership" means. If I "own" an 80% share in a gas station, and the gas station is suing someone, I have the right to call up the station and say "drop the lawsuit, and fire whoever thought of the lawsuit". By the same logic, a representative of the Federal government should be able to personally order the person who is responsible for this suit fired immediately.
By a similar reasoning, if I own 80% of the business, and there is some question over whether an employee is owed a large bonus, as owner I can say "nope, don't pay the bonus". Even if my order violates a written contract, the employee would have to sue to get their money. And there's unlikely to be a single jury in the United States that would allow AIG execs to collect a few million dollars in return for making financial decisions that have destroyed the savings of millions of people.
frag the fsckers.
Just because something is legal, doesn't make it right.
But the law should be binding for the government.
There at least some public debate about the 700 billion.
How about the 9.7 trillion? 9.7 trillion is a lot bigger than 700 billion.
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aGq2B3XeGKok
Only the stimulus bill to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates enacted in 2008 have been voted on by lawmakers. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. Recipients' names have not been disclosed.
Here everyone, look at the wookie's little friend. Oh you'd rather look at the wookie? That's OK too!
8,200,000,000 * 80 = 656,000,000,000
That is the current cost of the Iraq war. Yeah, let's talk about the "outrage du jour", shall we? IMO, while possibly an ill conceived plan, this has a goal and a purpose. And hundereds of thousands of people won't be killed or injured because of it.
And they aren't funding this with taxpayer money, they are just printing up more money to pay it off. Just like they are doing with the Iraq war. This isn't our money, it's our grandkids' money.. and their grandkids' money.
This administration is telling us what is going on, for the most part - and we don't like it. Hey, they're all going to screw us, but what would you rather have - one that lies to you and treats you like children, keeping you scared of the monsters under the bed?
My beliefs do not require that you agree with them.
The shares that the government bought are all non-voting shares. So while the government can reap the benefit if the company's share price ever recovers, they have absolutely no say in how the company is run.
Maybe its time as a nation we as a people speak out. AIG is screwing us, Big Corps are screwing us. Hell our government screwed us for the last 2 terms of office. Maybe as a people we should just screw them back. I don't know where we went wrong as a country. We used to be the crown prince of the Earth. All nations looked to us and then we allowed an idiot from texas who ruled us. He took away our rights and idiot zealots thanked him for it. No more Due Process, No more Privacy, Screening our calls, Then demanding access to our e-mails and our internet searches. Thank god companies fought back but my god. We lost so much diplomatic ground. and these same idiots past bills and left the new president cleaning up an old mess. We have a war no one wants any part of. The republicans consistantly blame the democrats for Republican Failures. I used to be proud to be an American. If I traveled abroad on business I smiled and didn't I spoke about it. I hope Obama will make me proud again. I hope the Republican party falls. I hope someone blows up AIG. I hope Fox News Burns to the ground and I hope Rush Limbaugh catches an STD and suffers till death, and if he infects Sarah Palin SO BE IT! 300 years ago there was a dream about a country that gave people self evident rights. I hope in my lifetime I will see that dream return to a reality.
I am betting the insurance companies will pay me if my house burns down.
The insurance companion are betting that only a marginal few will burn down, and the rest will cover expenses and a profit.
It all goes to hell when all the houses burn down.
The Kruger Dunning explains most post on
The thing that confuses me is directors get golden parachutes even when they're kicked out by the shareholders. The rationale is they have a contract for services and there is a contractual obligation to buy them out of it.
Myself and my employer also have a contract for service which gives each other rights and obligations. If I was let go, I would have a month notice.
The problem is the information and power gap between directors and shareholders. Shareholders approve directors and their remuneration but it's a token vote really, it has to be not only absurd but unusually absurd for shareholders to actually vote down a remuneration package. Even if you have your company who is good at this, with strong non-executive directors and so on, they fall into the trap because if you want to attract a good director you have to pay the same or better than all the companies where the shareholders are suckers.
This leaves you with a situation that new directors can negotiate remuneration before their performance can be evaluated, before the shareholders have much reason to be paying attention. Thus they simply lock themselves into a cant-lose package before anyone starts to care. It even becomes a perverse incentive to the shareholders, who become even more reluctant to dismiss a director because it costs so much money to buy them out.
Here in the UK we've had various reports on the situation over the years but IMHO one thing which would make a massive difference is to legally mandate that if shareholders vote out a director the dismissal overrides any contract leaving the director due an average 1 month's salary plus any accrued bonuses.
Gee, I guess I've jumped on this party a bit late, but, do you have a steady job . . . have you paid your taxes . . . and provided for your family . . . not delinquent on your mortgage ?
Give yourself a bonus. Deduct it from your income.
Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
They were bonuses... retention bonuses. I don't care how you wrap them up, they were bonuses. Any other term is just an attempt to hide their true intent.
Bonuses to keep people on so they... don't go somewhere else? Number one, where would they go? Number two, maybe if they screwed up this company that bad, they SHOULD go somewhere else? If I were a shareholder and they just fucked up the company with credit default swaps, I wouldn't want them working there.
And no one really called bullshit on this before?
"All great wisdom is contained in .signature files"
Or worse yet acting like your unbiased even thou everything you do has a clear slant to it.
Much like, and I know I know low hanging fruit here, Fox News's slogan "Fair and Balanced".
Really, I know what I'm doing...Ohhhh, look at the shiny buttons!
A new entity (the government) came in which is not bound by those contracts
When you buy or assume ownership of a company, what makes you think you can just ignore contracts already put in place? AIG has not filed bankruptcy. AIG was "nationalized" to the tune of 80%. In other words, the government seized 80% ownership - but make no mistake, it is still a (dis)functioning corporation with a corporate charter and everything. It is still bound by SEC rules for filing financial statements. Etc, etc. Your insinuation that they are not bound to those contract terms is just plain wrong because the legal structure of AIG has not changed at all. The only difference now is that your government (you and I) own 80% of it. It was an ownership change.
If AIG had declared bankruptcy and the government bought it THEN you would be right. You see, this is exactly what bankruptcy is all about -- wiping out past debts and contracts. But until you go through that process, everything is still in effect (and should rightfully be).
AIG, without question, is bound to these contracts. If the government unilaterally overrules that, then heaven help us all. We will scare away any and all investors because who the hell wants to do business in a banana republic that can unilaterally change contracts just because the political winds change. Chavez and Morales do that kind of thing, not Americans.
You know thats pointless gransd stand, fight?
They have to pay it. Legally.
McCotter knows this, if they illegally stopped the bonus, he would be up there berating them for doing that.
Of curse, he also doesn't really say anything but idle speculation.
The man want's to cut all taxes but has no plan on which government services to cut. Talk about bad fiscal decisions.
He know he will loose, so he is grandstanding so later he can say he is a 'true republican'; however when ti comes to his state, he has no problem asking for money to prop up failing business:
http://mccotter.house.gov/NR/rdonlyres/6C88FCBF-1FFD-461F-BEE9-CD9FC7913544/0/3409PressReleaseonAutos.pdf
And I love this one:
http://mccotter.house.gov/NR/rdonlyres/35F7508B-EE1D-4388-A66A-99EC5D0B4339/0/press121208.pdf
So, what ahve we learned? when his partty ias in power, it's OK to ask for money, when it's the Democrats, suddenly taxpayer money is off limits.
Does saying:Give me more money and cut taxes sound sane to anyone?
This guy is the type of politician that gives all of them a bad name.
It's not like he is even trying to compromise on the two opposites actions. he literally want's both.
Don't take quick snippets of any politician and use that as proof for some pet ideological position.
The Kruger Dunning explains most post on
People ARE starting to notice. (I still think such discussions should standardize on millions of dollars, for example: $165M vs $173,000M.)
Here's a visual: http://minnesotansforglobalwarming.com/m4gw/2009/03/aig-and-the-new-math.html
Ok, if the tax laws say they should get this refund, and they aren't getting it, they have a right to petition in court to force the issue.
And if the bailout law specifies exact amounts they are getting, well, they have a legal right to those amounts in addition to what the government already owes them.
As fucked up as it sounds, if the law says they are owed this money, thats what the law says, and they should get it. Congress should look at the situation though, and see about changing the law so that their next stimulus payments get reduced by, oh, 165 million plus whatever these bonuses were for(can't remember the exact amount).
I'm not a fan of how this bailout is proceeding in general. Ok, this is a big problem, and the failure of these companies risks a full blown economic depression. We can prevent that from happening by spending hundereds of billions of dollars to prop up these companies.
Ok, fine. If thats what it costs to prevent the second Great Depression, I'm fine with the government spending that much. Not happy about it, but its definitely the lesser of two evils IMO.
But it seems more like a nationalization plan than temporarily propping them up so they have time to fix the problems that lead to this situation. I don't like this.
Surely the 80% shareholder, ie the government, can step up and stop this case... Surely when you own 80% of a company you should have sufficient power over it.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
May the American People be forgiven, for when faced with a big mess, they chose Justice over better ways to reduce the mess.
$170 Billion dollars of problem
$170 Million dollars of justice
"Hey...are you a talented mortgage underwriter? How would you like to come help us work out our mess at AIG? The American People want your help, and will have your back. We're all about what's RIGHT, so come join us in our effort."
uggh.
At face value? no. but they have been dissected.
They got a sweet deal.
http://dealbook.blogs.nytimes.com/2009/03/18/dissecting-the-aig-bonus-contract/?em
The Kruger Dunning explains most post on
Lawyers: 195908092
The rest of us: 0
dammit! we lose again
Read what I mean, not what I wrote.
that kind of profiteering is reserved for stock brokers!
(que a quote from Ralph Bellamy in "Trading Places" right about now)
every day http://en.wikipedia.org/wiki/Special:Random
Yes, nut I think it has to do with the scope.
I wouldn't want to see every tax change posted here, even though it impacts us all.
It's a hard line to draw.
The Kruger Dunning explains most post on
and think they can simply circumvent the law when it suits them.
I remember all the crying over Clinton, all the crying over Bush, but regardless of which party held the whitehouse or which held congress, the real problem has always been Congress.
Congress has turned into the ultimate entitlement, the ultimate expression of power corrupts.
It matters not which party is in charge, unless you count how eager the press is to chase them, it only matters that the same old people are there year after year.
Congress knows better, they just don't care. They think they are above the law because they are the law in their eyes. They have become judge and jury and we let them get away with it.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
and just like Dashcel only paid it when cornered. Geitner was hoping to get past the statute of limitations...
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Inflation is the continuous theft or taxation of everyone that owns or is owed money.
What is egregious is that most people think that inflation is somehow natural.
I sincerely believe ... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale. - Thomas Jefferson
Section 10 - Powers prohibited of States No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
Why are U.S. taxes being handing money to foreigners?
May be because AIG owed them a buck or two?
...a stunned silence fell upon the hall.
... I mean what do they have to do to get a proper riot?
How exactly is it a specific problem of the liberals?
May be you could give your definition of liberals here too? Because by definition I know, a liberal believes in the power of a free (liberal) market or society without regulation or too much intervention from the state.
...a stunned silence fell upon the hall.
> It is actually, now more then ever, in the government's best interest for AIG to make every attempt to go after any and all money it can, from all sources.
So, you're saying that it seems correct that the government sues itself for money ?
Mmm. Why not ? I must confess that insanity sorta make sense these days...
And then have those entitled suing AIG/Government and get the bonuses still plus costs plus damages?
...a stunned silence fell upon the hall.
The people getting these bonuses don't have to fucking take them. They can, you know, say "thanks but no thanks, I just dont feel right taking taxpayer money like this". Would you take the money? I know I wouldn't.
The fact that these people seem to have taken the money means, in my book, they are horrible people so fuck 'em. If they were decent humans, they'd go on Leno or something and say "I refused to take the money" and we would cheer them as heros (or something).
You are right that they can't say "We are taxing AIG execs," that would be something that applies to a specific group, and thus unconstitutional. However, it may well be that they can find a perfectly constitutional way to do this. Perhaps they make it so that there is a special tax levied against corporate bonuses when those bonuses are from companies that have received TARP funds. That sort of thing may work. You can tax different sources of money differently, like income vs capital gains and such.
They may well be able to find a way to make this perfectly legal.
That's really misapplying the term "gambling". Gambling is defined as money, or anything of value, that is risked for possible gain. The important thing here is the "gain" part. You are betting something, hoping to make an over all gain. That's not the case with insurance. When you insure your home, you are not hoping to make a gain on it. If your home burns down, they don't pay you a hundred million dollars, they pay you the value of the home and its contents (or the limits of the policy, whatever is less).
You aren't gaining anything, and you certainly aren't hoping that it'll happen. What you are doing is transferring risk. You cannot afford to pay out the cost of a new house. Thus the risk of losing it isn't acceptable. So you purchase insurance. They agree to assume the risk. Should the house be destroyed, they pay for it, you don't. In trade for that, they collect regular monies and get to keep them if nothing goes wrong. Your insurer may in fact then do the same thing. They might assume the risk for small things, but transfer the risk for a large event to another insurance company that specializes in that.
That's all insurance is. It isn't gambling, it is risk transfer. That is also why there are cases where it is advisable to NOT have insurance. For example if you have a car that is old and has a low book value, collision insurance is a waste of money. If you wreck the car, you can afford to replace it. Thus there's no reason to transfer the risk, just assume it yourself. Also the amount they charge is such that after awhile, you have already paid out anything you'd get.
So no, it isn't gambling. Gambling is what you do in a casino. If you don't see a difference between that and insurance, well then you need to do a bit more research.
I think we're past that now. As we come to full understanding of how badly we've been had the result could very well be to undermine the "full faith and credit of these United States". The irony is that the idiots that pulled this trick will then find their inflated bank balances as worthless as the IOU's of an unemployed meth addict. They did it all for nothing.
Help stamp out iliturcy.
As the growing recession drags on, there is a new martyr of the minute for those who are caught now (but only at private companies) bathing in government dollars. AIG and its cohorts may have created the most sensational recent example of poor use of taxpayer funds, yet overlooked in the national media dialog is how many old ideas concerning government spending have been reinvented to represent different concepts in this time of crisis.
In the most recent stimulus bill- the American Recovery and Reinvestment Act of 2009- a massive $787 billion dollars in spending was unleashed from the public coffers in a very expedited manor. The president challenged the congress to oppose the bill, saying âoewhat we canâ(TM)t do is drag our feet or allow the same partisan differences to get in our way.â The public demands action to our growing economic problems, and the modern media made sure Obamaâ(TM)s version of the story was soon clear to the American public.
The narrative about the economy has always had a few sides. Universities around the nation have for a long time incubated a non-decisive discourse on the economy. Two schools of thought have been debated back and forth in academia: Adam Smithâ(TM)s model touting the greater benefits of the free market vs. John Maynard Keynesâ(TM)s economic model that stipulates that government spending is the best way to get through an economic crises.
With our current federal policy the Democratically Controlled government has declared a winner between the two, and the mainstream media seems happy to report that this decision will apparently allow the nation to put this nasty recession thing behind us. You canâ(TM)t blame them though- it makes good sense on the surface for the media to come to this conclusion. If the current nationally agreed upon model is a Keynesian one of government spending, then who better to do the job-if you go by the past century of the American narrative-than the Democrats. One of the old favorite Republican adages is to call the Democrats âoetax and spend librals.â
Nowadays Obama is proud to boast the Democratic Partyâ(TM)s credentials are spenders of the publicâ(TM)s coin. FDR and his legacy of spending during the Depression is heeded as the new best old way to do things. But the new Democratic Party canâ(TM)t get support for the same projects Roosevelt did; they needed new ideas to capture the heart of the nation. So where did the Democratic Party look for these new ideas? The same place they kept their old ones.
One big part of the conversation is so called âoeGreen Collared Jobsâ that are to be created by the millions due to government spending contained in the stimulus package. Suddenly the subject of saving the environment became less about losing jobs (from private corporations that are negatively affected by environmental regulation) to making them through new government spending on environmental projects. In the age where Keynes is king, the idea that subsidized industries are less efficient than private ones that are affected by free market forces is all of a sudden a good thing.
Yet there is an important question the media never asked during the passage of the important bill. What mechanisms or provisions are in the legislation to guarantee that the jobs created by its passing will be American ones? On Obamaâ(TM)s website it states that he plans to âoehelp create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future.â
The problem is that the wind-turbines, solar farms and clean coal factories that Obama professes to be enamored with can be full of parts made in China. In fact, we all know it would be cheaper to build the bits there and put the final product together here. That is what America is good at nowadays. The website never specifies that the 5 million jobs be American ones.
But jobs installing wind-turbines and putting together
Open Source Sushi
First the government didn't take them over entirely. However even if they did, that doesn't remove contracts. Contracts survive buyouts, transfers, etc. You don't get to buy a company and just abandon all the previous contracts. That could lead to tons of abuse. For example:
Suppose you have a contract with your company, you get 10% of sales on an idea you patent, paid yearly. So you create a brilliant new product and patent it for the company. They make hundreds of millions of dollars selling it. End of the year rolls around, time for your payout. You get nothing, none of the millions your contract stipulated. So you go to the owner and say "What the hell?" He says "Oh well see I sold the company to my brother (who was the CFO). So now I'm the CFO and he owns the company. That contract isn't valid anymore." They use the company as a shell game, transferring it back and forth to get out of contracts.
Well doesn't work like that. The contract survives the transfer.
Obviously there are downsides to that, we see one here. However over all, that's how you want things to work. You want that when something changes hands, contracts go with it. As another example, how would you feel if your bank got bought by another bank, or maybe just sold your mortgage and the new bank said "We didn't like that old contract so the new one is 30% interest, retroactive to the beginning of the loan." Fortunately for you, that mortgage is a contract, and they've got to honour the terms.
ED-209 only offered 20 seconds to comply. Personally, I'd just open fire until I emptied my guns and tell the smoking remains, "You shouldn't have pissed us off..."
He put his boots up on the table and made a face. "The sig," he smirked. "You can waste your life in search of the sig."
The elucidating comment I've read on this so far was from http://www.reddit.com/r/business/comments/85nk2/spitzer_the_aig_bonuses_are_a_smokescreen/c08bmtg
__________________________________________________________________
About the current CEO:
* He's being paid 1 dollar a year.
* He gets no bonuses, either way.
* He gets no stocks.
* He didn't sign these contracts, he inherited them.
About the people who tanked AIG:
* They are gone.
* They were few.
About the people who received the bonuses:
* They did not kill AIG
* They were offered these bonuses last year, to stay for another year, and clean up the mess.
* They reduced $2.7 trillion of shit to $1.6 trillion of shit.
About the bonuses:
* They are less than .1% of the bailout money.
* They were offered last year, to retain people until they cleaned up the mess.
* They were NOT meant to retain people for next year.
What if we didn't pay them?
* The people who are (successfully) cleaning up the mess, would leave.
* Then, they would sue (rightfully so).
* AIG would have to try to replace them, while trying to prevent losses on the suddenly 'unmanaged' accounts.
* AIG might be forced into bankruptcy, for defaulting (aka: we lose).
* AIG might survive, but take further losses, and need more help (aka: we lose).
Personal thoughts:
* We should have let them fail, but we didn't, it would be idiotic to let them fail now.
* The current CEO deserves nothing but respect, but instead, he gets death threats.
* The people who stayed on, and cleaned up the mess, deserve to be well paid. They saved us a ton of money, and the bonuses are marginal in comparison.
Analogy:
The people from FP (financial products) are the burger flippers at McDonalds. The people who got the bonuses work the counter at McDonalds. The burger flippers made some seriously shitty burgers. They got fired. The counter crew has spent the last year trying to find places to safely unload those burgers (worm farms, bacteria labs, etc.) It was a dirty job, and Mike Rowe wasn't available.
Yes, I'm contradicting a post I made yesterday. I watched the full hearings on C-Span today http://c-span.org/Watch/watch.aspx?MediaId=HP-R-16464, and learned a hell of a lot from them. Yeah, I changed my mind, but that's what I do when I learn that the facts don't match my perception.
__________________________________________________________________
Environmentalism is the new Victorianism. Everyone ties on a green corset and pretends we're virtuous.
Millions of people worker harder than these pen pushing gordon geckos, tell me why can an individual deserve a 1M bonus for loosing millions more in deals. Get back to reality AIG employees, live like the rest of the populace, fixed income, no bonuses , no over time, no paid lunches.
Dont like it, quit.
Liberty freedom are no1, not dicks in suits.
They could rebuild the shuttles using titanium as per spec. Build 20 of them.
Finish the ISS in one year.
Build 2 or 3 moon bases.
WTF is it useful if the bank gets it?
Liberty freedom are no1, not dicks in suits.
I keep getting sucked in by this argument and then it dawns on me that more time on this petite thing is less time spent on more important things as to whether these bailouts should have happened at all. This is simply an unintended consequence of bad policy.
http://www.rollingstone.com/politics/story/26793903/the_big_takeover/5
AIG decided to pay out another $450 million in bonuses. And to whom? To the 400 or so employees in Cassano's old unit, AIGFP, which is due to go out of business shortly! Yes, that's right, an average of $1.1 million in taxpayer-backed money apiece, to the very people who spent the past decade or so punching a hole in the fabric of the universe!
and so on.
The whole article is actually well written and is a informative read.
...a stunned silence fell upon the hall.
You're not quite getting what this was about. As far as I can tell, AIG were carrying out a complex tax evasion scheme (similar to the ones a lot of banks were using), and the IRS called them on it. AIG are suing the IRS because they reckon the tax evasion scheme is entirely legal.
First of all, I've read my fair share of Sklansky too.
Second, you're grossly misapply a gambling viewpoint to the situation of homeowner's insurance for a huge number of reasons.
First, insurance companies don't permit you to take out multiple insurance policies on the same house, save when the secondary insurance stipulates that it takes effect outside the limits of the first. (So if Policy A doesn't cover flood damage, you can get policy B to fill that gap. But Policy B will stipulate that if you DO have flood insurance on another policy, then your cover under policy B is invalid, or other such limit).
Second, a lot of efficient insurance policies are actually +EV by their very nature. The insurance business has a term called "cost of float". Insurance collects a ton of money up front for events which may or may not occur down the road. They do their best to predict the cost of the sum of those future events, and they're good at it.
It turns out that in many cases, *if* you value your dollars at $0, your cost to self-insure will actually be higher, because the insurance company is actually collecting less money from you than they expect to pay out.
How? There's a time value to money. If an insurance company has a "cost of float" of 102%, it means for every $1M in premiums collected, they expect to pay out $1,020,000. Nominally a loss, but the payouts are far enough into the future that they can invest the money now, earn a return, make the payment, and have a profit.
If you're judging on a more immediate term - ie, "Well, I can take out insurance and wreck the house, which would only sell for $200k, but the policy will pay $250k", then your "+EV situation" is predicated upon the commission of a serious crime. Tons of people go to jail for insurance fraud, thinking they can game the system. So you'll have to factor in the EV of a long prison term.
This relies on an assumption of insurance fraud. Insurance doesn't pay out when you cause the "outcome". "Winning" a bet over insurance in that way is analagous to "winning" a poker hand by pulling out a gun and telling the other guy that you're going to shoot him if he doesn't fold.