So who actually accepted the AIG bonuses? And when is Obama going to stop spending political capital on this mess?

It is time to face the music in terms of America’s latest reality show….and it is not one that has just been launched, nor is it the one that ended with potential contestants rioting and being arrested—yet.

Nup. This show has obviously been around for some time, and if the latest happenings from the mega-insurer AIG (which now stands for Association of Individual Greed) don’t finally join the dots on the monstrous picture of greed/corruption, then nothing will.

Obama wanted to be the 'change' president, and part of the way he wanted to operate included instigating one of the most rigorous vetting processes ever known for top level staffers in his newly White-washed-house. Trouble is, he kept coming up with duds who were less than frank in their tax-paying, or their hiring of domestics. Tom Daschle was pretending to be ordinary folk while swanning around town in chauffeur-driven limos à grace to some kindly financier.

But is it any wonder when you start to consider the behaviour of these alpha candidates alongside their alpha finance guru mates who have been running the US for some time? The new ‘c’ word for the home of the free is corruption closely partnered with ‘g’ for greed. Period—as they would say.

Yes, it’s a little harsh, but if you start taking stock of what’s been going on from Enron (and before, but let’s not quibble) right through to Bernard Madoff and this week’s bonus revelation fiasco with the Associated Individual Greed experts, it fits like a toddler’s jigsaw. It appears that if you go fishing in a scummy pond you are bound to end up with rancid fish, and it has taken the current world economic crisis to lift the lid on the smell.

The big question has to be who are these people at AIG who have taken millions in bonuses? The company took billions from the taxpayer in bailouts, flicked much of it off to associated banks and companies around the world, then used bailout money to pay mega bonuses, pleading it was contractually obligated to do so.

Far from wanting to advocate a naming, tarring and feathering, I am advocating a naming, tarring and feathering.

You see, if you or I had a job in a local store, for example, and we blew all the profits we would not get a bonus for doing so. Not even a teensy-weensy little bonus in line with our teensy-weensy little wage. What if we worked in a factory and our management skills were such that we lost all the contracts and almost put the business out of action? What bonus would we be entitled to expect? The answer is none. Zip. Zero.

It seems the way to secure a bonus is to run a really, really really big organisation into the ground—work really, really, really hard at stuffing it up to the point that the company is about to go belly up—and voila, bonus. Bonus-uninterruptus. Bonus so well defined and protected by legal contract that all the other people who have been disenfranchised by your alpha ‘skills’ can go take a flying leap.

Obama needs to make some sense of this, and quickly, because while he’s spending bailout money faster than Mrs Madoff can hide the diamonds, he’s also spending political capital. AIG has given him the financial equivalent of a raspberry and a pouty little “you’re not the boss of us” and he can’t let that go.

Under a system called Capitalism the AIG attitude could have been quite correct in its spurning of government oversight. However now it is all a little more akin to a thing called Socialism given that the US government owns about 80 percent of AIG and bought that share using millions and millions and millions of taxpayer’s funds. That’s pretty much boss status, so Obama and those staffers who did make it through the vetting process had better work out a way to get back those bonuses.

Again, who the hell are these people who have taken the bonuses? Do they actually believe they are entitled to the money paid by others who work for average wages in jobs that may now be extraordinarily precarious? Does the meaning of the word ‘bonus’ need a serious rejigging? Do they all still work for AIG or have they taken the money and run?

Will they have the guts to refund their individual bonuses, contract or no? While the bonuses amount to a pittance in the great scheme of the trillions now talked about, it’s symbolically crippling for corporate America, and even having to be shamed into paying the money back is better than skulking off without a care for anyone but self.

Comments (5)

by DeepRed on March 19, 2009
DeepRed

Chairman Mao once said that "power comes from the barrel of a gun". In this day and age, absolute power comes the barrel of a financier's pen, even when they're in a right royal mess like they are now.

And we're all familiar with Lord Acton's words of wisdom, "Power corrupts, and absolute power corrupts absolutely".

Combine all the above and you get the following:

  • Power and corruption come from the barrel of a gun. (Mao, Stalin, Hitler, Tojo, Idi Amin, Mobutu, Milosevic, al-Bashir, among others, have proven that right.)
  • Absolute power and absolute corruption come from the barrel of a financier's pen. (Bernie Madoff, Enron, Fay Richwhite, just to name a few.)

The truth hurts, eh?

by Graeme Edgeler on March 20, 2009
Graeme Edgeler

when is Obama going to stop spending political capital on this mess?

The bonuses were obviously stupid, but everyone - the media, but especially the politicians - is spending way too much time on this. The spending of the $170b propping up AIG is a much bigger story than the spending of $165m by AIG, but even it didn't get the Washington airplay of this.

When the stimulus bill was being passed, opponents were pointing to wasteful spending in it, and supporters responded with a bit of perspective that that spending was less than one-half of one percent of the bill. This is less than one-tenth of one percent of the AIG bailout. Where are the stories about the other 99.9% of the money?

As for naming and shaming - it sounds like a good idea, but with all the fake outrage being whipped up, it would very quickly descend into naming and death threats or worse.

by Nigel on March 20, 2009
Nigel

Christopher Dodd stuck in the provision that allows AIG directors to keep their bonuses and he says the Obama administration told him they wouldn't sign the bill unless he put that provision in.

Obama also accepted a big campaign donation from AIG and I don't see him giving that back.

So it's a bit rich for Obama to now feign outrage and pretend it's nothing to do with him.

by Adolf Fiinkensein on March 21, 2009
Adolf Fiinkensein

They are not actually performance bonuses.  They are contractual retention payments made to key staff who were going to leave.  They have been engaged in cleaning up the mess left by the real culprits who are long gone - without bonus payments.

This so called 'bonus' story is just political hype with no other purpose than diversion of the public's attention from the fact that the majority of the AIG bail out billions have gone to foreign banks.  AIG should have been allowed to go bust and then the American corporations which were left in the lurch by AIG's failure should have given assistance - for maybe one hundredth of the cost.  The ones that were genuinely worth saving, that is.

 

Your socialist outrage is misplaced, I'm afraid.

by on May 03, 2010
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