AIG rumbled back into the news last weekend again when it announced plans to bonus its people to the tune of some $165 Million, despite being on life-support after inhaling some $170-plus Billion of your and my tax dollar BailOut bucks. These guys just don’t stop!
Their justification, per the Sunday AM Cable Talking Heads, is that they are obligated under existing contracts to bonus their key producers; they call it ‘retention pay’ – that’s what Larry Summers told George Stephanopoulos Sunday morning. Give me a break.
Rewarding failure is maddeningly counter-productive and is not exactly a morale booster to a nation staggering under the load of unrelenting bad economic news. AIG has been the poster-boy for rewarding failure, having drunk deeply of Federal largesse to keep its heart beating, and whenever anybody lifts a finger or raises a voice of complaint, they remind us that AIG is simply Too Big to Fail and that, if we let it go down the Lehman road to oblivion, we will so upset the economic world and so de-stabilize AIG’s trading partners that chaos will reign and life as we know it will end. While some of that parade of horribles may actually, and regrettably, be true, it does not justify AIG’s actions and somebody needs to put a halt to paying bonuses to people who ran their company into the ground.
It reminds me of the politically correct approach to younger education and sports where everybody is now a Winner and nobody loses or ever has to have hurt feelings or feel inadequate – lousy preparation for life in the Global Rat Race, if you ask me. No matter what AIG does, regardless of how flagrantly they seem to rub our collective noses in their corporate greed-drenched mentality, whether it is lavish parties or now bonuses, using your and my Federal BailOut bucks, of course, as if it was Monopoly money, we keep the spigots open and keep handing them more money.
It is time to put a stop to these bonus plans, whether that means installing a kind of Government Receiver to oversee AIG’s use of BailOut Bucks, or replacing management, or dismantling the monster, selling off its pieces, and restoring rationality again. Those supposed contractual obligations might bind a healthy company that is not on Federal life-support. But, surely, there are legal doctrines which could be invoked to avoid, postpone or cancel these contractual bonus deals that AIG claims tie its hands and require this disgusting display of “Let them eat cake-style” generosity while 600,000-plus Americans each month are losing their jobs (697,000 in February!), our national unemployment softened-statistics show over 8% out of work, and the overall figure of those who have no jobs and have either fallen off the far end of unemployment benefits or taken lesser or part-time positions is now over 14%.
What does it tell the average American who is struggling right now, perhaps to pay their mortgage, send their kids to college, hang onto their job or find another, and to continue to cope with this flood of economic Media misery, to broadcast that AIG will now pay this kind of money out of your tax dollars and mine to people who nearly destroyed the company making horribly risky bets dressed up as investments? Nothing good or positive.
It is time for the Feds and the Obama Administration to put AIG up against a wall, threaten their very corporate life if they go through with this flagrant abuse of all that is rational and decent, and don’t ask them to trim back (suggested by some of the Sunday morning talk show guests), instead, tell them that if they don’t cancel these absurd bonuses, there will be no more Federal BailOut Bucks and that AIG can start paying back now what they already took out of my pocket and yours.
Enough rewarding failure; enough of greed for now. And, as for ‘retention bonuses,’ if the rationale is that AIG must pay these millions to ‘retain’ the Best and Brightest, maybe they should skip these bonuses, let these folks go, and find new people who can actually make money for AIG, without losing the farm, and get it off the Federal dole already!