I didn’t know that presidents could fire CEOs but seeing how as the government is giving companies billions of dollars, they should be held accountable. Seeing how Obama pressured GM CEO, Rick Wagoner into stepping down, here is five other CEOs who Obama should have fired. Businesses can no longer have the free reign do destroy the country that Bush gave them. Maybe Obama can’t officially “fire” these CEOs but he should pressure them to step down.

1. Edward Liddy CEO AIG

Liddy was hired by former Treasury Secretary, Henry Paulson in 2008. Paulson had previously given Liddy his job at Goldman Sachs. One of Liddy’s first acts as CEO was throwing a $440,000 luxury retreat for top executives, while the government gave his company $84 billion because retreats were “standard practice in our industry.” Guess what Liddy, your industry has gone to shit and you need to reconsider those practices. In a debate with McCain, Obama said of the retreat “The Treasury should demand that money back and those executives should be fired.” There has been no record of AIG giving that money back so Obama should fire the AIG executives, including Liddy. Despite appearing outraged before congress about the infamous AIG bonuses, it turned out that Liddy had accelerated more than a quarter of AIG’s bonuses by three months.

AIG: Don’t Hate the Player, Hate the Game

2. Rex Tillerson CEO Exxon Mobil

While the country went into a major recession last year, Exxon Mobil posted its biggest profits. High gas prices from last year were undoubtedly controlled by Tillerson and other oil and gas CEOs. The high gas prices helped lead us into the recession we are in, while helping Mobil record those record profits. Exxon Mobil has fought and lobbied to continue America’s dependency on oil, while extorting Americans’ dependency on foreign oil. Not only is Exxon responsible for a good deal of the environmental damage that affects the world, but also the tensions and wars in the middle east. Obama should fire the company man Tillerson and replace him with someone who has a long term vision for energy and our environment.

Exxon Mobil Shatters Record For Annual Profit

Department of Interior Accused of Taking Bribes and Sexual Favors From Exxon and Other Oil Companies

3. Smith and Wesson CEO, Michael Golden

Smith and Wesson is the largest gun manufacturer in the world. They also give a lot of money to the NRA, which in turn lobbies government for easier gun laws.  In 2000 Smith and Wesson had a deal with the Clinton administration to make their guns more safe and fight against the illegal flow of their guns into urban neighborhoods. After Bush was elected, In 2001 Smith and Wesson was bought by another company and reneged on their agreement. Smith and Wesson’s CEO should be fired and they should go back to their pre-Bush philosophy of keeping guns safe and out of the inner cities and criminals rather than selling the guns and not caring where they wind up. Obama needs to send a message to the gun industry that they need to take responsibility for the guns that they sell.

How U.S. Guns and Drug Addiction Fuel Drug Wars at Home and Abroad

4. Halliburton CEO, Dave Lesar

After milking America for billions of dollars through its Dick Cheney connection, it is time for Halliburton’s whole leadership to be removed. A defense contractor should not have close relationships with the leaders who decide if we go to war especially since they have no bid contracts. Lesar does not even work out of the US, but instead works in the more oil friendly Dubai. Halliburton has been involved with trading with Iran, covering up rape in Iraq, overcharging the Pentagon, using off shore companies and foreign subsidiaries to avoid paying U.S. taxes and bribing Nigerian officials. In order to rid the USA of the awful legacy of Cheney and Halliburton, all of Halliburton’s contracts should be nullified and Obama must press Halliburton to pay their taxes and fire their CEO.

Halliburton Covers Up Rape and Murder of Black Woman in Iraq

5. Clear Channel CEO, Mark Mays

Clear Channel owns a lot of billboards and a lot of radio stations. Clear Channel was also one of Bush’s biggest corporate allies. They tried to subdue freedom of speech and stop on air personalities from criticizing Bush, yet Mays himself stood up for Limbaugh when Harry Reid criticized him for his “phony soldiers” comment using the freedom of speech defense. Clear Channel has also ruined urban radio by turning “Hip Hop” stations across the country into identical entities playing the same water downed negative sterotypical Hip Hop. Obama needs to rid the US of the Bush cronies who helped shape his misguided agenda and promote bigotry.

Get Rush, Boycott Clear Channel

Top 10 Racist Limbaugh Quotes

This is a pretty funny cartoon by the people at Current. It parodies they AIG scandal and Obama’s cabinet.

Watch the Video

I watched this week as the nation’s furor turned towards employees of insurance giant American International Group (A.I.G.) and the $165 million in retention bonus payments recently doled out to executives. Executives, who, as we already know are largely to blame for their role in A.I.G.’s financial crisis that led to the country’s economic meltdown in the first place because of its dealings in bad mortgage-backed securities. This is also the same company that was given a loan in the form of a bailout using taxpayer money to the tune of $122.8 billion. And even though Congressional members can’t seem to pass a universal heathcare bill, raise the Federal Minimum Wage, or adequately fund our public schools, in record time U.S. lawmakers managed to create a piece of legislation that would tax the bonuses for employees at firms receiving federal funds in an attempt to show the public “they care too.” Mind you, these are the same people who never return you, the taxpayer’s and voter’s phone call, but all of a sudden, “they’ve got your back.”  Now whether this bill passes it or not is a whole other story. I’m more concerned with what I like to call “selective outrage” as demonstrated by voters and usually triggered by the media and almost always used as a distraction to keep our focus from the real issues.

Rewarding incompetence with taxpayer money is nothing new for American voters, and I don’t recall there ever being a national outcry of “off with their heads.”

Congress has raised its own pay more than two dozen times, according to the Congressional Research Service before finally just passing a law providing for automatic annual cost-of-living adjustments unless they vote otherwise.  Most recently, they voted to forego next year’s pay increase because of the recession but accepted this year’s increase of $4,700 bringing congressional salaries to $174,000.  That’s $174,000 in taxpayer money…and that’s just the money we know about.  While it may seem like Congressional members are making off like fat rats, let me remind you that we do the same for State and local elected officials across the country.

Corporate executives may have private jets, but our elected officials have Lincoln Town Cars, the choice of many representatives who lease their vehicles at taxpayers’ expense.

According to an article published last year in the Los Angeles Times, twenty-one of California’s 53 House members lease vehicles, among them Reps. Diane Watson (D-Los Angeles) and Laura Richardson (D- Long Beach).

In the article, Watson grew testy when asked recently about her taxpayer-funded vehicle.

“You guys ask me such idiotic questions,” Watson snapped. Her spokeswoman, Dorinda White, explained that Watson chose the Lincoln because she is “over 6 feet tall in shoes” and spends a lot of time driving around her district.

Watson, whose district include numerous schools in the beleaguered Los Angeles Unified School District including Dorsey High School, where a recent district report shows a graduation rate of 36%,  an entire student body that is less than 1% proficient in math, and that only 21% students meet the requirement to attend a 2-year or 4-year university.

California Democrat Congresswoman  Laura Richardson, who was voted one of the “2008 Most Embarrassing Re-elected Member of Congress” by the Citizens for Responsibility and Ethics in Washington (CREW), choose to allow the taxpayers to foot the bill for her 2007 Lincoln Town Car at $1,300 a month, it was the most expensive car in the House of Representatives.

Richardson’s district includes Compton, where jobless rate is up to 18.4%.

And even though pink slips have been handed out to teachers in California due to the State’s budget crisis in the neighborhood of an $8 billion estimated decline in revenue, the average lawmaker still makes $113,000 a year plus a $173 living expense for each day they have to work in Sacramento, which tends to average out to $30,000 annually.  Their living expense allowance alone, which is taxpayer funded, is more than some teachers bring home in a year.

Yes, taxpayers reward incompetence with every paycheck issued to elected officials who continue to represent districts filled with unemployed workers, families living at or below the poverty line, and school districts in crisis.  But it’s not breaking news every time our money is automatically deducted from our paycheck and electronically wired into their bank accounts on the 1st of month. It’s only when we show up at our local County, State of Federal building asking for it back in the form of unemployment benefits, welfare, or General Relief that it is.

So why is it that American taxpayer’s are all bent out of shape over the bonuses paid to unknown incompetent executives, who, bonus or no bonus, are wealthier than most of us will ever be?  The reality is that the day to day actions of these executives, as wrong as they are for accepting a bonus in any amount, don’t affect the majority of us in comparison to the actions of the people we elected and in most case repeatedly re-elected into public office to represent our best interests.  Sign me up for that crusade.  Sign me up to stand outside of the airport on Thursdays when lawmakers fly back into their districts to meet them with signs of protest for the continued social injustice faced by their constituents.  Sign me up to lead the recall of lawmakers who aren’t doing their jobs.  That’s how you reward incompetence.

The flap surrounding A.I.G.’s bonuses are just another distraction in a laundry list of distractions designed to keep the taxpayer from focusing on the real issues.

Ask yourself how much taxpayer money went into funding last week’s Capitol Hill A.I.G. hearing that resulted in Congressional members giving “Mad Men,” “30 Rock,” and Alec Baldwin a run for their money for consideration in next year’s Emmy Award nominations for the categories of Outstanding Drama Series, Outstanding Comedy Series, and Outstanding Lead Actor In A Comedy or Drama?  After all of the theatrics were over, those same A.I.G. executives climbed back aboard their private jets and Congressional members hopped into their taxpayer funded vehicles headed to their daily evening fundraiser.  The media got their sound bytes that they will then dutifully repeat every hour on the hour making you think something really happened in that hearing.  And you, the taxpayer, believe it or not, got screwed again.

“Don’t hate the player, hate the game.”—rapper Ice T.

Jasmyne Cannick is a critic and commentator based in Los Angeles who writes about the worlds of pop culture, race, class, sexuality, and politics as it relates to the African-American community.  Her work has been featured in the Los Angeles Times, Los Angeles Daily News, and Ebony Magazine. She can be reached at www.jasmynecannick.com.

BP Member CleanCutBrotha

BP member CleanCutBrotha says “In a memo, employees are advised to “avoid wearing any AIG apparel (bags, shirts, umbrellas, etc.) with the company insignia” in the article titled Better Hide Your Badge, AIG Tells Employees. As the public relations nightmare for AIG continues they removed the logo from their own building.

AIG Building In NYC

They are taking their own advice seriously… Tell us what you think here.

President Barack Obama is trying to dampen a fire he once stoked, urging a more tempered response to public furor over bonuses paid to executives of the publicly rescued insurance giant American International Group.

Obama is virtually certain to use Tuesday’s prime-time news conference to continue an effort that began over the weekend: cooling the anti-AIG ferocity, now that it threatens to undermine his efforts to bail out the nation’s deeply troubled financial sector.

Obama’s tone changed dramatically after the House voted last week for targeted taxes to take back most of the $165 million in bonuses paid to AIG executives. Many lawmakers felt Obama had encouraged their step, because he called the bonuses reckless, outrageous and unjustified.

Protester Visit AIG Officials’ Lavish Connecticut Homes | CLICK HERE

Obama Talks About AIG On Leno’s “Tonight Show” | CLICK HERE

In the White House, however, the situation seemed to be spinning out of control. Some fellow Democrats questioned the constitutionality and wisdom of the House’s action. Executives of other troubled companies signaled they would not make deals with a federal government that revises agreements after they are signed.

On Sunday, Obama told CBS’ “60 Minutes” the House’s plan to slap a special tax on the AIG executives would be unconstitutional. Borrowing a line from his Feb. 24 speech to Congress, he said he would not “govern out of anger.”

In an essay that was published in 31 newspapers around the world Tuesday, Obama wrote: “Rigorous transparency and accountability must check abuse, and the days of out-of-control compensation must end. Instead of patchwork efforts that enable a race to the bottom, we must provide the clear incentives for good behavior that foster a race to the top.”

Meanwhile, top Obama spokesman Robert Gibbs said White House officials were heartened by the strong rally on Wall Street Monday in the wake of its announcement of a plan to work with private investors to sop up as much as $1 trillion in bad assets still held b y struggling banks.

But Gibbs also said Tuesday he believes the administration ultimately will be judged by its ability to restore a healthy economy, not on “what happens yesterday or today in the market.”

“I think the American people want to get back to sustained, long-term economic growth,” he said on CBS’s “The Early Show.” Gibbs said that’s precisely what Obama is focused on as the administration tries to jump-start the economy.

“Obviously we’re pleased by what happened in the market yesterday,” he said. But Gibbs added that “we don’t spend a lot of time worrying about what happens each day in the market.”

Protester Visit AIG Officials’ Lavish Connecticut Homes | CLICK HERE

Obama Talks About AIG On Leno’s “Tonight Show” | CLICK HERE

The political dance may be far from over as Obama continues to weigh the potency of public anger against the danger of overreacting and alienating bank executives whose cooperation is needed in the bid to get credit flowing again.

A mob can be useful in driving a political movement, “but its usefulness tends to dissipate when you’re trying to craft careful policy,” said John Feehery, a former aide to top GOP lawmakers. After playing into the public fury over the AIG bonuses for days, Obama and his allies “are in danger of being trampled by the mob,” he said. “They have to coolly explain what they’re trying to do.”

Earlier Monday, the White House said it will team with investors to initially buy as much as $1 trillion in bad assets from banks reluctant to make loans. The embattled treasury secretary, Timothy Geithner, asked for patience, saying such partnerships must proceed despite “deep anger and outrage” over the bonus payments.

For Obama, the challenge is to keep a pulse on the anger while giving the public time to calm down, and perhaps be distracted by other events in the coming days.

“It’s tricky, and the wind shifts very fast,” said Matt Bennett, vice president of Third Way, a pro-Democratic group. Obama quickly realized the virulence of the public’s anger over the AIG bonuses and the need to respond, he said.

“But I don’t think they anticipated what the House did,” Bennett said, and Obama was wise to stop short of explicitly embracing the legislation. Now, he said, the administration may have bought enough time to let tempers cool.

New York Attorney General Andrew Cuomo said Monday that 15 employees who received some of the largest bonuses from AIG have agreed to return them in full, totaling more than $30 million.

Congressional Republicans say Obama has contradicted himself and confused voters.

“We’re getting whiplash watching the administration careen back and forth,” said Antonia Ferrier, spokeswoman for House GOP leader John Boehner of Ohio.

Clearly the administration still sees the AIG issue as dangerous and sensitive. After the House vote last week, the administration said the action “rightly reflects the outrage that so many feel over the lavish bonuses” to AIG executives. But it stopped short of saying Obama would sign the bill, even if the Senate approves it.

On Monday, Gibbs continued to be evasive. “We will certainly evaluate whatever were to come down Pennsylvania Avenue” from the House and Senate, he said.

His comments were more tepid than those Obama made a week earlier. Then, the president said he had directed Geithner to “pursue every legal avenue to block these bonuses and make the American taxpayer whole.”

Some congressional Democrats are pursuing strategies that might get Obama off the hook by using bureaucratic powers — not legislation he would have to sign or veto — to rescind all or part of the AIG bonuses.

Sen. Mark Warner, D-Va., has asked the U.S. Office of Thrift Supervision to block the AIG bonuses under its power to move against a lender’s actions that are deemed “unsafe and unsound.”

The OTS says it lacks such authority over AIG because the massive federal loan, which essentially gave the government majority ownership of the company, changed the company’s charter. Warner, a member of the Senate Banking Committee, has asked the office to explain and defend its conclusion.

RELATED:

Protester Visit AIG Officials’ Lavish Connecticut Homes | CLICK HERE

Obama Talks About AIG On Leno’s “Tonight Show” | CLICK HERE

BP Member princess5677058

BP Member princess5677058 summarizes the current AIG bonus uproar “It is a rather curious spectacle to see congressional Republicans express outrage at the exorbitant bonuses being handed out by bailed-out companies and blame the Obama administration for failing to curb the practice with AIG.”

Check the rest of the story and comments in the BP news article she shared titled Flashback: It Was Bush/GOP That Opposed Executive Compensation Caps. Let us know how you feel about the corporate welfare doled out during this global “recession”.

Joining a wave of public anger, President Barack Obama blistered insurance giant AIG for “recklessness and greed” Monday and pledged to try to block it from handing its executives $165 million in bonuses after taking billions in federal bailout money.

“How do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama asked. “This isn’t just a matter of dollars and cents. It’s about our fundamental values.”

Obama aggressively joined other officials in criticizing American International Group, the company that is fast becoming the poster boy for Americans’ bailout blues.

Watch Obama’s Criticize AIG’s Bonuses

The bonuses could contribute to a backlash against Washington that would make it tougher for Obama to ask Congress for more bailout help – and jeopardize other parts of the recovery agenda that is dominating the start of his presidency. Thus, the president and his top aides were working hard to distance themselves from the insurer’s conduct, to contain possible political damage and to try to bolster public confidence in his administration’s handling of the broader economic rescue effort.

SENATOR SAYS AIG EXECS SHOULD QUIT OR KILL THEMSELVES

Obama had scheduled a speech Monday to announce new help for recession-pounded small businesses. But first, he said, he had a few words to say about AIG. He lost his voice at one point and ad-libbed, “Excuse me, I’m choked up with anger here.” It was just a light aside, but he meant the sternness of his remarks to come through.

“This is a corporation that finds itself in financial distress due to recklessness and greed,” Obama declared.

He said he had directed Treasury Secretary Timothy Geithner to “pursue every legal avenue to block these bonuses and make the American taxpayer whole.”

Later, White House spokesman Robert Gibbs said the administration would modify the terms of a pending $30 billion bailout installment for AIG to at least recoup the $165 million the bonuses represent. That wouldn’t rescind the bonuses, just require AIG to account for them differently.

Gibbs said the tough talk from Obama and other administration officials was aimed in part at pressuring bonus recipients to turn them down. Anyone accepting the money should “think long and hard” about whether keeping it was appropriate “given the performance of the company,” he said.

On a separate track, New York Attorney General Andrew Cuomo said Monday he would issue subpoenas for information on the bonuses after AIG missed his deadline for providing details. Cuomo said his office would investigate whether the employees were involved in AIG’s near-collapse and whether the $165 million in bonus payments were fraudulent under state law.

AIG spokeswoman Christina Pretto told The Associated Press, “We are in contact with the attorney general and will of course respond to his request.”

One reason that the AIG bonus giveaway is such a compelling story – and a politically troubling one for Obama if not neutralized – is that it offers a simple story line that appears to sum up ways in which the federal bailouts have gone awry.

“This is just the kind of issue that galvanizes public outrage,” said Paul C. Light, professor of public service at New York University. “It’s always the tangible stuff, the things that ordinary Americans can relate to. They don’t know the first thing about credit default swaps. But they do know about bonuses. And it’s just the sort of thing that will undermine any future bailout activity.”

Bailout steps for AIG totaling over $170 billion since September have effectively left the federal government with an 80 percent stake in the faltering insurance giant.

Obama’s comments came on the same day a new poll showed slippage in his approval rating. The poll by the Pew Research Center showed it dropped from 64 percent in February to 59 percent this month amid divisions of opinions over his economic proposals and what the pollsters said was a growing perception that the president is listening more to his party’s liberals than to its moderates.

Still, those surveyed generally gave the president favorable marks for doing as much as he can to try to fix the economy, and few blame him for making the economy worse.

Andrew Kohut, Pew’s director, said in an interview that people are most angry with banks and companies but there’s also “pushback against Washington generally. And, of course, the buck stops with Barack Obama these days.”

Obama’s sharp words continued an insistent administration drumbeat over the past few days designed to pressure the bonus recipients to forgo them. Thus far, American International Group officials have refused to rescind the payments.

In a letter to Geithner over the weekend, the government-appointed chief executive of AIG, Edward Liddy, said the bonuses were legally binding obligations and the firm’s “hands are tied.”

Still, pressure was building on that issue – and on the government to rework its AIG bailout to make sure the company repays as much of the $170 billion as possible.

So far, the company has been honoring its contracts with U.S. and foreign banks, paying out more than $90 billion in economic bailout funds to big banks and others. The government agreed to uphold those contracts when it seized control of AIG in September, contending that failure would bring even worse global economic problems.

However, Obama officials made the rounds of Sunday talk shows to denounce the insurer. And even Federal Reserve Chairman Ben Bernanke weighed in, saying on CBS’ “60 Minutes” that the AIG bailout angered him the most and that he “slammed the phone more than a few times on discussing AIG.” Still, he said a collapse of AIG would have wreaked havoc on the global economy.

Obama was planning an appearance later in the week on Jay Leno’s NBC talk show, perhaps to add a lighter touch to his efforts to show himself in command of efforts to resuscitate the economy.

The AIG bonuses were revealed over the weekend. It also was disclosed that AIG used $90 billion-plus in federal aid to pay foreign and domestic banks, some of which had received their own multibillion-dollar U.S. government bailouts.

The recipients included Goldman Sachs, at $12.9 billion, and three European banks – France’s Societe Generale at $11.9 billion, Germany’s Deutsche Bank at $11.8 billion, and Britain’s Barclays PLC at $8.5 billion. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans and which is now part of Bank of America, had received $6.8 billion as of Dec. 31.

The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions.

AIG reported this month that it had lost $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

Outcries against the company have also come from congressional leaders.

“I call upon the executives at AIG to right the wrong they have done to American taxpayers, who are footing the bill for the most expensive government rescue in history,” House Speaker Nancy Pelosi (D-Calif.) said Monday.

Senate Republican Leader Mitch McConnell called the bonuses “appalling” and said he hoped “the administration gets the message from the taxpayers on this issue.”

Iowa Sen. Charles Grassley suggested that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant by resigning or killing themselves.

The Republican lawmaker’s harsh comments came during an interview with Cedar Rapids, Iowa, radio station WMT on Monday. They echo remarks he has made in the past about corporate executives and public apologies, but went further in suggesting suicide.

“I suggest, you know, obviously, maybe they ought to be removed,” Grassley said. “But I would suggest the first thing that would make me feel a little bit better toward them if they’d follow the Japanese example and come before the American people and take that deep bow and say, I’m sorry, and then either do one of two things: resign or go commit suicide.

“And in the case of the Japanese, they usually commit suicide before they make any apology.”

Grassley spokesman Casey Mills said the senator isn’t calling for AIG executives to kill themselves, but said those who accept tax dollars and spend them on travel and bonuses do so irresponsibly.

“Senator Grassley has said for some time now that generally speaking, executives who make a mess of their companies should apologize, as Japanese executives do,” Mills said. “He says the Japanese might even go so far as to commit suicide but he doesn’t want U.S. executives to do that.”

The senator’s remarks added to a chorus of public outrage over the disclosure that AIG intends to pay its executives $165 million in bonuses after taking billions in federal bailout money. President Barack Obama lambasted the insurance giant for “recklessness and greed” on Monday and pledged to try to block payment of the bonuses.

RELATED:

Merrill Lynch CEO Resigns Over Bonuses | CLICK HERE

NAACP Accuses Banks Of Financial Racism | CLICK HERE

BP Member Mr_Spann

Mr_Spann raised the question of which company really deserves a bailout. Check out the news article “Why AIG Gets Billions While GM Gets Scorn?” It’s our money anyway, so speak your mind here.

Martin J. Sullivan, 53
Position: Former Head; AIG insurance.
Income: $10.9 MM
Family Status: Married
Location: New York, NY

How He Was Bailed: Having averaged an estimated $11million per year as CEO, Sullivan was due $19 million in severance payments that the government bailout was to go towards. He has been with AIG for 37 years. Despite New York Attorney General Andrew Cuomo’s attempt to freeze over $600 million in bonus payments to AIG employees, he received – and has refused to refund – a $5MM performance bonus for 2008.

Click here for a full report.

VS.

Marvel Collins Jr., 53
Position: Forklift Operator; Parma auto plant.
Family Status: Married
Income: $75,000
Location: Bedford, Ohio

How He Was Failed: In a sub-prime Adjustable Rate Mortgage that he didn’t understand, Mr. Collins mortgage payments suddenly increased from $829 a month to just over $1,300 and he lost his home his family have lived in for over 10 years.  Original cost of the property?  $109,000. Mr. Collins does have a $40 a day Ohio Lottery habit and despite a somewhat porcine build, considers becoming a part-time stripper in hopes of one day owning a home again. Any sort of subprime bailout would be too late for Mr. Collins.

Click here for a full report.

Are you outraged? Tell us what you think in the comments!

ALSO, join the forum on BlackPlanet and tell us about how you or someone you know has been FAILED!

The action, announced by the Federal Reserve and the Treasury Department, was taken as it became increasingly clear that an original financial lifeline thrown to AIG in September would be insufficient to stabilize the teetering company. All told, the moves boost aid to the company to more than $150 billion. Fed officials, however, expressed confidence that the money would be repaid to taxpayers.

The $40 billion infusion comes from the recently enacted $700 billion financial bailout package. The government is buying preferred shares of AIG stock, giving taxpayers an ownership stake in the company. In turn, restrictions will be placed on executive compensation at the firm.

As part of the new arrangement, the Federal Reserve is reducing a $85 billion loan it had made available to AIG to $60 billion. The Fed also is replacing a separate $37.8 billion loan to the insurance company with a $52.5 billion aid package.

The actions were needed to “keep the company strong and facilitate its ability to complete its restructuring process successfully,” the Federal Reserve said.

And that would be good for the fragile U.S. economy, said White House press secretary Dana Perino.

The new package “will allow AIG to continue to restructure themselves in a way that will not hurt the overall economy. AIG is a large, interconnected firm,” she said.

If the company were to fail, it would wreak havoc on the country’s already ailing economic health, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke determined back in September when the government first moved to help AIG, Perino said.

Shares of AIG added 32 cents, or 15.2 percent, to $2.43 in early-afternoon trading. The company’s stock has traded between $1.25 and $62.30 in the past year.

It marked the first time money from the $700 billion bailout package Congress enacted last month has gone to any company other than a bank.

Struggling U.S. auto companies — General Motors Corp., Ford Motor Co. and Chrysler — have been pressing the government for more financial assistance. The money would be on top of the $25 billion in loans that Congress passed in September to help retool auto plants to build more fuel-efficient vehicles.

The Treasury Department, which is overseeing the bailout program, has promised to inject $250 billion into banks in return for partial ownership. The original notion behind the bailout package was to help financial institutions lend money more freely again, one of the main reasons the economy is in danger of getting stuck in a long and painful recession.

Until Monday, all of AIG’s bailout relief was coming from the Fed.

The Fed, earlier this year, said it would loan a total of $123 billion to AIG. The insurance company was later allowed to access another $20.9 billion through the Fed’s “commercial paper” program. That’s where the Fed is buying mounds of companies’ short-term debt often used for crucial day-to-day expenses, such as payrolls and supplies.

Monday’s restructuring provides AIG with easier terms on the original Fed loan. The new package reduces the interest rate AIG will pay and will extend the loan term to five years from two, reducing the need for AIG to sell off business lines and other assets at firesale prices to repay the government.

Under the new $52.5 billion package, the loans will last for six years. Through two new facilities, the Fed will fund the purchase of both residential mortgage-backed securities from AIG’s portfolio, and collateralized debt obligations, which are complex financial instruments that combine various slices of debt.

By taking these troubled assets off AIG’s balance sheet, it should take stress off the company, giving it more breathing room and helping to prevent future losses, Fed officials said. The Fed doesn’t believe it will suffer losses because it is hopeful the market for such distressed investments will recover as the economy and financial markets rebound.

AIG reported Monday that continued financial market turmoil resulted in a large third-quarter loss.

The New York-based company said it lost $24.47 billion, or $9.05 per share, after a profit of $3.09 billion, or $1.19 per share, a year ago.

Results included pretax losses of $18.31 billion tied to the declining value of AIG’s investment portfolio. They also were hurt by catastrophe losses and charges related to restructuring.

Excluding items, operating losses totaled $3.42 per share — missing analysts’ average loss estimate of 90 cents per share, according to Thomson Reuters.

In early October AIG said it would sell certain business units to pay off the $85 billion Fed loan. The company, however, said it plans to retain its U.S. property-and-casualty and foreign general insurance businesses. It also plans to keep an ownership interest in its foreign life-insurance operations.

AIG is a colossus on Wall Street and financial districts worldwide, with operations in more than 130 countries and $1 trillion in assets on its balance sheet.

Besides life, property and other insurance offerings, AIG provides asset-management services and airplane leases. Its myriad businesses are also linked to mutual funds, annuities and other retirement products held by millions of ordinary Americans.

But perhaps the biggest concern about AIG is the dizzying array of complex financial instruments it structured for commercial banks, investment banks and hedge funds around the globe — many of which were directly or indirectly linked to the value of U.S. mortgages.