Dusting Off the Guillotines
The news has been buzzing with anger over the $165 million in bonuses insurance corporation AIG plans to shell out to its executives, especially after the news broke that the majority of bonuses were going to AIG's Financial Products Unit, the same unit whose unregulated financial shenanigans brought the company - and the world economy - to its knees.
This behavior should come as a surprise to no one. After all, this is the same company that managed to spend more than $400,000 on an executive retreat less than a week after receiving $80 billion in taxpayer funded bailout money back in October.
The surprising thing is that we're letting them get away with it. Again.
Turns out that good ol' Shrub, who was wrong about so much, can add one more thing to his list: "Fool me once, shame on — shame on you. Fool me — you can't get fooled again."
AIG isn't the only focus of populist outrage. The courtroom erupted into loud laughter when Ira Sorkin, lawyer of Bernie Madoff, who swindled more than 4,000 individuals and organizations out of more than $60 billion dollars, argued that his client should go free on bail after pleading guilty to his crimes. The judge sided with the crowd - Bernie was led away in handcuffs to await his sentence in jail.
The Detroit automakers also fell afoul of the country's current mood when the Big Three CEO's each flew a separate private jet to Washington to beg for taxpayer money to save their failing companies from their own mismanagement.
These people make Marie Antoinette look sensitive and in touch with the mood of her times.
"Madame Deficit," as she was known by her angry contemporaries, probably never uttered the famous phrase "Let them eat cake." Modern historians believe the actual culprit was Louis XIV's much stupider and more sheltered wife Marie-Therese.
However, nobody can argue that prancing around in expensive hats pretending to be a shepherdess while real shepherdesses were starving wasn't a PR disaster of truly colossal proportions.
Poor Marie paid for her mistakes with her head. Will the corporate CEOs whose decisions led to the current financial crisis pay for theirs? Will they even admit them?
Where is the Accountability?
Chuck Grassley is shocked - shocked! - to learn that gambling is going on in here. Having voted for the deregulation that contributed to the current financial crisis, Senator Grassley has about as much credibility as Inspector Renault pocketing his earnings.
However, he did get one thing right in his initial call for AIG executives to commit suicide, and his subsequent retraction:
Where is the contrition? Where is the accountability? The CEOs of companies such as AIG, Citibank, and GM not only haven't acknowledged their mistakes, they're actively playing the American public for fools. When the AIG bonuses scandal broke, CEO Edward Liddy wrote a remarkably cynical letter to Treasury Secretary Timothy Geithner explaining that paying the bonuses was necessary, among other reasons, because without doing so, AIG would not be able to attract and keep "the best" employees if they believed that their compensation would be "subject to continued and arbitrary adjustment by the U.S. Treasury."
Considering the bang-up job AIG did attracting "the best" employees when their bonus policies were not overseen by the government, I really think we can afford the risk, especially now that we, the taxpayers, now own 80% of the company, whose reckless and irresponsible policies (which themselves bordered on an illegal Ponzi scheme such as that headed by the fallen crook Bernie Madoff) nearly brought the entire world's economy to its knees.
So fuck you, Mr. Liddy.
Tempting as it might be to start dragging out the guillotines, we can't forget where that got the French, or where the hail of bullets that ended their similarly extravagant, out of touch monarchy landed the Russians.
Lying down and rolling over as the super-wealthy continue to build themselves a second (third? hundredth?) Gilded Age at the expense of American taxpayers is no more viable an outcome, however.
Smarter and more knowledgeable minds than mine will need to come up with a real solution, but I think an important starting point is education. The more we, the general public, know about the dirty dealings going on behind closed doors on Wall Street and in Washington, the better the chance we have of stopping them. I'll be honest: the current crisis has stretched my knowledge and understanding of economics to the limit and beyond, but every day I'm learning more, and the more I learn, the madder I get.
Though I was more informed than some over the last eight years, thanks to a deep-rooted hatred and mistrust of George Bush and everything that came out of his mouth - his perpetual, disingenuous economic optimism included - I still had no idea of the true depth of the problem until last year. If I and every taxpayer had been more knowledgeable and informed about financial issues in the first place, instead of accepting the pronouncements of CEOs, politicians, and the media at their word, the crisis might have been avoided.
Fool me once, shame on you. Fool me twice, shame on me. But I, for one, refuse to be fooled again.
Meanwhile, I've started knitting again. Just in case.
Do Summers and Geithner Need to Go?
- The real scandal at AIG
Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?
- The Potentially Larger AIG Problem
The political hue and cry over the millions in bonuses for AIG execs has hit fever pitch but there are major questions about what AIG has done with far larger portions of the federal bailout money it's received.