Obama's unhatched chickens

We have the AARP on board because they know this is a good deal for our seniors. AARP would not be endorsing a bill if it was undermining Medicare.
-President Barack Obama at Portsmouth, N. H. town hall meeting August 11, 2009

AARP has been working with Democrats and Republicans to fix our broken health care system. While the president was correct that AARP will not endorse a health care reform bill that would reduce Medicare benefits, indications that we have endorsed any of the major health care reform bills currently under consideration in Congress are inaccurate
-Tom Nelson, COO, AARP August 11, 2009 AARP Press Center

Well, can you blame AARP for not endorsing Obamacare at this time? There are 5 different health care "reform" bills under consideration in Congress now. Nobody knows what the final bill will contain or even if there will be a bill to vote on this year. Another reason for AARP withholding endorsement is many seniors concern that Medicare benefits will be cut to help pay for insurance on the currently uninsured. Since AARP is the largest lobby for Americans age 50 and up, to endorse any of the bills at this point would cause an uproar from their membership base. The best thing AARP can do for Americans at this point is advocate what lots of Americans want. They do not want a complete overhaul of the USA health care system in less than 12 months. Maybe if AARP reminded President Obama that he was elected for 4 years he might finally get the message and stop trying to push 1000+ pages of legislation through Congress overnight as if it is emergency legislation. It's not an emergency!!

News from the wonderful world of USA finance

First, Edward Liddy announced that he would be resigning from his $1.00 CEO position at AIG when a replacement was found. He felt that AIG has reached the point where a long term CEO was needed. ( See my 3/19/09 posting "congressional follies about AIG") AIG's Trustees are also requesting 6 new independent board members at the June 30, 2009 annual shareholders meeting. Earlier, Mr. Liddy had said AIG was on track to pay back the bailout money within the next 5 years. Mr. Liddy and the trustees are on the path to recovery for AIG. The USA owes them a well deserved Thank You Very Much for all your effort and endeavor to help get our economy strong again. Our fearless leaders in congress will probably berate them every chance they get. My advice to Mr. Liddy and the trustees, don't let the turkeys get you down!!

Second, Treasury Secretary Timothy Geithner will be announcing rules for executive compensation for the banks receiving bailout funds. Nothing concrete has been announced yet but there are some interesting ideas on the subject already. In a May 24, 2009 Rueters article by Dena Aubin and Corbett Daly, they quoted 2 Harvard Law professors, Lucian Bebchuk and Holger Spamann On the subject. The professors believe executive compensation should be based on more criteria than stock price. Since equity (the bank's stock) is only 5% of a bank's assets, other items such as deposits, loan portfolios & credit ratings should also be used to set performance rewards. The professors argue that if stock price is the only criteria for rewards, the stock price can be artificially boosted at the expense of the rest of the banks assets. I agree with this idea. The purpose of incentives is to reward work that makes the company more profitable, not just the stock. If the company's overall profitability improves, the stock will improve as well.