As I'm sure you are all aware, President Obama expressed anger at AIG for awarding huge, multi-million dollar publicly-funded bonuses to the very AIG executives whose colossal screw-ups have now cost the American public $180 billion and counting will now be receiving huge, multi-million dollar bonus payouts for their troubles:
"I am choked up with anger here . . . how do they justify this outrage?"
Our Congressional leaders also joined in on the outrage. Nancy Pelosi:
"Unconscionable"
Jim Boehner:
"Outrageous"
Chris Dodd called on AIG executives to "voluntarily" forego their bonuses.
Voluntarily?!! WTF!!!
What is wrong with these people!!! You are a lawmaker Chris Dodd, and in this particular instance, you are also a majority shareholder in the company in question, 79.9% to be exact. People who write laws and checks don't ask people to do things voluntarily . . . they tell them what to do.
This makes no sense whatsoever. Every time I see the President and Congress up in arms about the latest excessive Wall Street bonuses, multi-million dollar company-sponsored executive retreats or $35,000 golden commodes, I just want to scream! They're only doing what you let them do!
To take an analogy that many of us might be familiar with, I'm a land-use lawyer. Let's say a developer comes to my city and wants to build a project. He wants a variance from the local building codes and he wants a subsidy from the city's redevelopment agency to make the financing work. At that point, the city could say, OK, but if we give you these things, in return we demand that you limit the height of the building to 45 feet, that you build a park on 50% of the acreage and that you hire local construction workers. Or, option 2, they could just give the developer what he wants and hope for the best.
But what they cannot do is select option 2 and then turn around and complain that the developer built a skyscraper on the entire property and hired all out-of-state workers to do the work.
Let's get one thing clear: Hardly anybody, least of all Wall Street executives, ever forgoes money because it's the "right thing to do". Wall Street executives have clearly shown that they will in virtually all situations maximize the amount of cash in their bank accounts to the very limit of their ability under the law to do so, and sometimes they will go beyond that (See Bernie Madoff). In fact, they have repeatedly shown that they will sacrifice even the long-term health of their own companies in order to reap short-term gains.
Aesop probably has it best:
The Scorpion and the Frog
A scorpion and a frog meet on the bank of a stream and the
scorpion asks the frog to carry him across on its back. The
frog asks, "How do I know you won't sting me?" The scorpion
says, "Because if I do, I will die too."
The frog is satisfied, and they set out, but in midstream,
the scorpion stings the frog. The frog feels the onset of
paralysis and starts to sink, knowing they both will drown,
but has just enough time to gasp "Why?"
Replies the scorpion: "It's my nature..."
http://www.aesopfables.com/...
So, please, quit blabbing on to the press about how "outrageous" these Wall Street executives are in taking huge bonuses for ruining their companies and the entire economy to boot: "It's their nature".
What's needed instead are people acting like adults. If a company is in need of government support, and that support is somehow justified, then here's what adults do: they sit down and work out an agreement. The government provides the money. In return, the company agrees to do "X". "X" could be eliminate bonuses, close down risky units, default on certain obligations, whatever the government wants it to be. Typically the agreement would also include a very unpleasant set of things (let's call them "Y") that will happen if the company receiving the funds fails to do "X".
But what's not reasonable is for the government to give away hundreds of billions of dollars with no strings attached, no "X" or "Y" at all, and then turn around and complain to the press that the company failed to do "X". The company did not do "X" because they didn't have to. There is no "Y". AIG did exactly what's "in their nature": make as much money as possible, preferably sooner rather than later.
Will the frog ever learn?