American Morning

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March 17th, 2009
06:00 AM ET

What's On Tap – Tuesday March 17, 2009

Happy Saint Patrick's Day!

It's Day Two of our special CNN series Road to Rescue. We are breaking down this economic crisis and giving you the information you need to survive.

CNN's Personal Finance Editor Gerri Willis is on Twitter today and answering your questions throughout the show. Follow us at twitter.com/amfix.

Here's some of what's on the show today:

  • Outrage and anger are the watchwords in Washington when it comes to AIG. And that was before it was revealed that executives of the company that received $173 billion in bailout money is handing out $165 million in bonuses to the very people whose incompetence led to the world-wide financial crises. The government agrees that paying bonuses to AIG executives is outrageous, but they also say their hands are tied because they say these are legal, binding contracts. It's as though the American people are being held hostage to the same people who caused the crisis. But some say, wait a minute. If auto worker unions, who did nothing wrong, are being forced to consider massive givebacks, why can't AIG?
  • Crisis help lines have been getting flooded with calls from people trying to cope with their problems, now largely driven by their economic woes. These centers have seen call volumes rise, and the need for more volunteers to help answer them. The calls range from depression about the economy, personal financial issues, and even as severe as contemplating suicide. We go to one crisis center in DC to get a firsthand look at their busy call center and their recruitment and training efforts for volunteers
  • Rock-Bottom Housing? How bad is it? The median price of a home sold in the United States fell to $170,300 in January, down 26 percent from a year and a half earlier, according to the National Association of Realtors. How much worse could it get? The Federal Reserve estimates home prices could fall 18 to 29 percent more by the end of 2010. Declines will probably be less severe in cities with healthier economies that don't have a glut of unsold homes, like Tulsa, Okla., and Wichita, KS
  • A new phenomenom in unemployment circles. The so-called survival job. Paul Semenza lost his job as a lawyer and is now selling Sofa's to make ends meet. It’s not his dream job, but it pays the bills.
  • What price is beauty for a recessionista? Well in some cases, the price is too much. Some hair salons are reporting a sharp down-swing in appointments while some of the bargain shops are seeing a surge. Who doesn’t want a $10 haircut?
  • Rhode Island is suffering from one of the highest foreclosure rates in the country, but a state housing group is trying to turn it around. Rhode Island Housing is heading an initiative called KeepSpace, which is helping turn around distressed communities, one house at a time.
  • How does $780 billion dollars get to your town? Well, if you live in Maryland, you can attend a workshop and find out. Maryland Governor Martin O’Malley set up a series of these workshops for local leaders so they could learn how to get their money fast.
  • There is one clear beneficiary of these tough economic times... the FBI. One month ago the agency announced a hiring blitz, looking for everything from fingerprint examiners, to IT specialists, to car mechanics for their fleet of vehicles. They have 2,100 jobs open but the response has been overwhelming. More than a quarter million applications so far!
  • Is the recession being used as an excuse to lay off women working on Wall Street? That’s what some former female employees of Citigroup think. They were laid off in November and have recently filed charges of gender discrimination with the EEOC.
  • Sam Lippert owns the Java Street Cafe in Kettering, Ohio – a suburb of Dayton. He is a small business owner who was suffering due to the economy so a week ago Wednesday he decided to let customers pay what they believe is a fair price for items on his menu. He joins us live.
  • Christie Hefner, Fmr. Chairman & CEO of Playboy Enterprises, and Patrick Byrne, CEO of Overstock.com join us to discuss the outrage against AIG over bonuses. What are CEOs saying about the recent populist rage against Wall Street? Are they worried about the long-term impact this could have on business?
  • John Wilson, a small business owner from Raleigh, NC, joins us to discuss President Obama's lifeline to small business owners. The President outlined a plan to help them during a White House meeting with a select group of small business owners. John Wilson participated in the meeting and is optimistic that Pres. Obama's plan will loosen liquidity and allow his cabinet business to grow.

Filed under: What's On Tap
soundoff (40 Responses)
  1. Janina Grimsley

    In want to ask Gerri Willis about whether or not it would be a good time to buy a new house. We presently have a house that we have paid off the mortgage on. We have been here for 23 years. We are empty nesters and want to downsize while relocating to a nearby area that has been out of our price range until lately.
    We feel that now might be a time to upgrade. We want a newer, yet smaller home to retire in.I am a retired teacher. My husband owns his own CPA firm here in Columbia, SC.
    We don't have to sell our present house and would try to rent it. It's located in a desirable neighborhood that would be ideal for a young family that might not be in the market to buy.
    So is it a good time foir us to look into the prospect of moving to a newer house?

    March 17, 2009 at 2:04 pm |
  2. Mary Ferris

    Did I hear correctly, that a lot of these bonuses were given to foreign people in other countries?. Does AIG cover the world? Double insult.

    March 17, 2009 at 10:13 am |
  3. William McKelvie

    How are these folks who asked for the bailout monies, who are getting bonuses not facing criminal fraud charges? They asked for the monies to help rescue the business, yet took the monies to pay bonus monies. How does one justify paying out a bonus, much less not one but two very expensive company parties, when the monies that they asked for clearly stated for saving their business. Paying bonuses and partying ?? This is nothing more than straight out fraud.

    March 17, 2009 at 9:09 am |
  4. Cathy

    I see that everyone you interview is over 50 plus. I want this issue addressed; the majority of folks who are losing their retirement or livelihood are baby boomers. Walmart is not a viable job, address the cruel back-lash of being mature and experienced – please?

    March 17, 2009 at 8:54 am |
  5. dennis

    The FTC should break up the company because they are to big.

    March 17, 2009 at 8:53 am |
  6. mark sherrill

    To big to collapse, so to protect the world economy??? Let's not put more hope into AIG – they have proven them self not worthy. Some at AIG need to join Madoff, as we the people use eminent domain to seize to company. AIG had their chance – they just don't get it!. Time for some tough love.

    AIG and others on Wall Street (Paulson for example) have been a cancer within our system for many years. It's a shame that we have waited far to long to treat this problem and now Wall Street finds itself in the emergency room without health care, and that sucks!

    March 17, 2009 at 8:40 am |
  7. Richard

    That Ryan Mack was right on!! Why should the tax payers pay for AIG's bonuses? We, the government, now own the company. Why not say to each person who is due a bonus: either give back your bonus or you will be laid off. They are at-will employees, who can be let go.

    March 17, 2009 at 8:26 am |
  8. Tom Urbanski

    First, the show hosts need a "microphone kill button" in their hands to prevent the obnoxious behaviour on the part of shouting "experts".

    Years ago I took over as the VP of Sales & Marketing in a company that was about to go under simply because they were paying their sales and marketing personell very large salaries, essentially giving them no reason to perform.

    I immediately changed that to give them a minimal subsistence salary, (just enough to pay for food, car, mortgage, heat, etc.), but with an opportunity to make a VERY GOOD income if they excelled.

    That's the type of bonus AIG is paying.

    Let me put it this way: Take whatever your most recent paycheck was and cut it in half. That's what you'd get every month until the end of the year.

    If you performed very well, you might get a "bonus" that totaled your annual pay times 1.5; if you were an average performer you'd get the other half of your total paychecks; and if you were a poor performer you'd get shown the door.

    That's the kind of "bonuses" we're talking about here.

    I realize that if anybody understood that it wouldn't make good news but that's the way it is.

    You all need to "chill" a bit.

    March 17, 2009 at 8:24 am |
  9. Robert

    Surprised? Not really. I see the Chairman of The House Financial Services Committee on the news saying "They have made a mess of it". Correct me if I am wrong, but isn't he, they? I find it unconscionable that the federal government did not know about these "Contractual Bonuses" before they released the money to AIG.

    March 17, 2009 at 8:17 am |
  10. dennis

    if the US owns 80% of the AIG company why doesn't the US fire anyone of the execs who take these bonuses and then take any licenses that they have to work in the industry.

    March 17, 2009 at 8:16 am |
  11. LaTosha Johnson

    I think the whole AIG bonus issue is much ado about nothing. It's little more than populist class warfare fanfare. Yes, the bonuses are undeserving, but the incessant bantering over this unimportant issue is a waste of air time.

    March 17, 2009 at 8:15 am |
  12. Kevin

    Since AIG is paying out 175 million in bonuses, is it possible for the government to deduct the bonus amount directly from to AIG?

    March 17, 2009 at 8:13 am |
  13. Jim

    I think the AIG bonuses should be paid in AIG stock based on its per share price before the company's collapse. They should take the same loss as their investors. Maybe someday they will get their million dollar bonuses when their stock regains all it lost due to their recklessness.

    March 17, 2009 at 8:13 am |
  14. dmac504

    This comment is for everyone that believes that those Executives at AIG deserves the bonuses. Take a look at this: if we would have let AIG go under would they be getting bonuses? The answer is no. So why is AIG telling us that their contracts ensure they get the bonuses. If you are broke you can't pay bonuses. Take our money back and let AIG and all of it's Executives get in a soup line to collect their bonuses.

    March 17, 2009 at 8:11 am |
  15. Kim New Jersey

    Since we own 80% why can't we fire the exec's. What are they going to do sue the American people. After all it is our money. As far those so called contracts I don't think they should be worth the paper there printed on. They got our money and they'll use our money in court to get the bonuses. Greedy, Greedy, Greedy.

    March 17, 2009 at 8:07 am |
  16. Anthony Bernard

    The problem is that America (Americans) has for too long identified money as the only indicator of success and happiness. It seems that I remember most of these people being at one time or another being featured in the media as models of success and happiness. Strange that the media is now trying to distance itself from those who were just a short while ago their darling models of what every American should aspire to be.

    March 17, 2009 at 8:00 am |
  17. Matt Baker

    People are getting confused about contract obligation and lack of professional by AIG staffers.

    March 17, 2009 at 7:57 am |
  18. Debbie

    Somebody please explain to me how our "Government" can claim that their hands are tied and cannot do anything about these outrageous and in my opinion morally wrong bonuses when they had no problem breaking the contracts between the Pilots union. There are people all around this country who had contracts with their employers that have been broken. I was promised a certain salary when I took my job but because of these greedy and corrupt Wall Street morons I now have to take a 10% cut in pay if I want to save my company. And my government has the audacity to force me to pay what little money I make to these corrupt thieves so they can continue living the outrageious lifestyles they are accustomed to...please spare me the song and dance. When is the public going to wake up and face the fact that we are nothing more than a society that exists on the whim of what our government wants to give us!

    March 17, 2009 at 7:57 am |
  19. IIanye from New York City

    Hi, I am a middle income worker and my union is faced with the threat of not getting the contractual pay increase, a second one week lag pay, and possible layoff from our governor, and yet nothing could be done with the AIG bonus payoffs. How fare is that, we are the middle class who is working hard to keeping the country afloat but is hit from all angles with this economy situations, difficult mortgage payment, foreclosure, food cost, health care, education payment, increase taxes to name a few. If this bonuses was promised to the CEOs on merit, Did they live up to that merit to receive the bonus. What happen to the contract laws. Thanks.

    March 17, 2009 at 7:54 am |
  20. jay john

    John, having Jill contribute to the blog ? You should invite her back and let her have her say. You guys hosted her – invited her as a guest. Would you do that to someone invited to dinner party at your home? Let them write a letter to the other guests "after the fact"? Come on - step up, admit you guys didn't manage that dialog well and give her air time and opportunity to contribute. If you don't, then you aren't behaving any better than the AIGs and our government. Come on - step up and do the right by your invited guest !!!

    March 17, 2009 at 7:54 am |
  21. James Kramer

    The AIG thing is actually a blessing. This is a chance to get rid of the less than honest people. What you do is ask all of the people that got the bonuses to return them because it's the right thing to do. Some people will but most I suspect won't. After a set waiting period go in and lay off, fire or eliminate the jobs of all the people that didn't return the bonus. The way I figure is that anyone that returns the bonus has at least some sense of honesty and is possibly redeemable. Anyone that doesn't return it is not worth keeping. We (taxpayers) as major owner should be able to do this.

    Jim

    March 17, 2009 at 7:52 am |
  22. sean

    Let AIG fall and take our loss. Sell all AIG internarional and
    domestic assets to recover tax payers money. We shoul
    d also put the executives in jail. Go after AIG the way the government is going after Madoff.

    March 17, 2009 at 7:50 am |
  23. Carolyn Simmons

    The ancient Greeks inscribed the names of any athelete (& his family) on stone surfaces that lined the approach to the main field/track stadium at the site of Olympic competitions. What if those who receive bonuses from institutions which receive(d) government bailout money were to be widely publicized in an array of news media? I think the effect would nullify the argument that the best must be retained or they will go elsewhere would be countered. Perhaps announce with a two weeks grace period so that anyone who makes "the list" could refuse, or return the bonus?

    March 17, 2009 at 7:43 am |
  24. Ginger

    Maybe the IRS should audit all bonus recipients and CEOs of these bailout companies. Uncle Sam might just get alot of his $ back.

    March 17, 2009 at 7:40 am |
  25. Kevin, Salt Lake City UT

    The AIG "Retention Bonuses" seem bad. We should just put the pressure on our elected officals to let the Fed break them up in a controled manner. By doing so it would force new contracts to be made that factor in the companys value, the possition and performance of the persons hired.

    March 17, 2009 at 7:40 am |
  26. Bob in Illinois

    These people are as bad as Madoff, stealing money from the American People. This madness has to stop, if its a bonus, and they can not make it, then American People should not have to bail them out.

    March 17, 2009 at 7:37 am |
  27. Chris Harvie

    Jay Leno stated last night, March 16th, that AIG stood for Adventures in Greed. Need we say more!
    Chris
    Vancouver, B.C.

    March 17, 2009 at 7:34 am |
  28. htMac

    It is an ethical question. So I will take an ethical stand and end all of my relationships with AIG! I am sure I can find a more ethical company to work with (as hard as that may be.)

    March 17, 2009 at 7:34 am |
  29. Ron Signorino

    It’s high time that the government-appointed CEO Liddy gets the message and starts coming down with two feet on AIG excesses. He was in a perfect position to require all executives with large bonuses coming to them to either modify the bonus provisions of their contracts or leave (with their ill-gotten gains). I support Congresswoman Maloney’s 100% tax on such bonuses, and will emphatically tell her so today.

    Just yesterday on a flight from Newark-Liberty to Seattle, I had occasion to sit opposite an AIG executive (with an attache case and travel bag both resplendent with AIG ID tags). We were both fortunate enough to have seats in first class. The big difference: My self-owned company is profitable, and I do not receive any subsidies from U.S. taxpayers who had to mortgage their children’s future in order to allow that (and other) AIG excesses.

    Liddy must wake up, or go. I hope Congress makes that point clear to him at the upcoming oversight hearing.

    March 17, 2009 at 7:26 am |
  30. Michael Steiner

    If AIG has this kind of money to through away, why not get a return of our 190B. See if they can stay afloat. If not, lets nationalize AIG then let these no good loser's sue the government to honor their contracts.

    March 17, 2009 at 7:24 am |
  31. Linda

    AIG? hummmm that must stand for "All-time Insurance Giveaway". After all, they are giving away OUR money so they don't care!

    March 17, 2009 at 7:22 am |
  32. Frank Thompson, South Padre Island, TX

    WE ARE QUICK TO JUMP ALL OVER AIG, RIGHTFULLY SO. BUT DON'T LET THAT IRE CAUSE YOU TO FORGET WHO GAVE THEM ALL THAT MONEY WITH NO STRINGS ATTACHED!

    March 17, 2009 at 7:17 am |
  33. Dorothy Chambers

    I want the names of these low-life creeps made public. Then we'll see how they live with that.

    March 17, 2009 at 7:14 am |
  34. Jerry Lynch

    I have only one thing to say. 'AIG let them fail'.

    March 17, 2009 at 7:12 am |
  35. Malcolm Macdonald

    To help with recovery of the American Banks I would recommend the Canadian Model whereby our banks retain mortgages within the bank which makes them a lot more careful in how they determine what is an appropriate loan or not. To make any kind of a loan that they immediately pass them off to Fannie or Freddy just allows them to go ahead and make more risky mortgages.

    March 17, 2009 at 7:02 am |
  36. Jerry from Texas

    Congress looking in the mirror !
    Looks like AIG has found a way to insert their own form of PORK
    into finance bills. At least they are not giving themselves automatic raises,YET !
    Congress, How does it feel ??
    Jerry from Texas

    March 17, 2009 at 6:58 am |
  37. JK Williams Atlanta

    ". . .but they also say their hands are tied because they say these are legal, binding contracts."

    My question is, who created these contracts and how were they able to include the type of lanquage that no matter what the bottom lines shows bonuses MUST be paid?

    March 17, 2009 at 6:52 am |
  38. Hazel Thom

    I'd like former attorney turned furniture salesman, Paul Semenza to contact me at the above e-mail.

    March 17, 2009 at 6:52 am |
  39. Bob in Rockford,Il.

    I hope my company goes under. I sure could use a bonus.

    March 17, 2009 at 6:36 am |
  40. max

    These people are no dufferent than madoff,there actually worse,have they no shame?And by putting the Va health care system in insurance's hands people like this will be in charge of us Vets Peeeew it all stinks.

    March 17, 2009 at 6:21 am |