The righteous roar rising from those quarters drove home the vast differences between our elected officials and the executive officers of the American International Group, whose employee retention bonuses are causing such a commotion across the country. The one gang has bankrupted a country; the other a company. The latter are scorned; the former are fawned upon. The one group gets to grandstand; the other gets pounded into the ground. The bigger crooks (the elected) have been enablers to the smaller ones (A.I.G.). To varying degrees, you, I, and A.I.G. are at the mercy of the grand inquisitors.
Take the goon Barney Frank, chairman of the Financial Services Committee. He threatened to arrest Code Pink protesters, and subpoena and release to the frenzied public the names of bonus and death threat recipients.
Then there are the similarities: A.I.G. and its inquisitors are incompetents, incapable of managing the change in their trouser pockets. All would struggle to survive in a meritocratic market. Bunglers on both sides have been generously rewarded for their incompetence with monies stolen from tax serfs.
Here are some interesting numerical comparisons: A.I.G. employees received a once-off payment of $165 million in undeserved, retention bonuses. The 535 U.S. House and Senate members collect 93.09 million, non-performance based dollars from taxpayers each and every year─not counting the cost-of-living-adjustment they receive, raises ($5000 each this year), their retirement, healthcare, and other benefits and bribes. Or the extra inflated salaries the speaker and the minority and majority leaders extract.
That’s $93.09 million more a year than Benjamin Franklin thought they deserved: Our Founding Father did not think America’s representatives ought to be paid at all.
Acting in the honorable tradition Ben Franklin wished to establish in the public sector is Edward M. Liddy, who’s chaired A.I.G. for the last six months. The poor man undertook this mission impossible for a symbolic annual salary of $1. “Many executives and employees might resign given the political climate and the giant bull’s-eye painted on AIG’s logo,” warned Liddy, during his testimony before the testy House Financial Services Subcommittee.
Good. That’s the honorable thing to do. (Some have already abandoned A.I.G., but not before pocketing their bonus pay.) That’s what A.I.G. executives and their underlings ought to have done ages ago. Instead, they lobbied for a bailout. Liddy finessed the matter by describing the company’s crew of 116,000 as united in wanting to work “shoulder to shoulder” with “federal regulators” to extricate their company from the morass it was in.
One problem: they’re standing on my back─and yours! All 116,000 of them.
A.I.G. chose the dishonorable way out, preferring to make a living via a political, predatory process. In exchange for billions bilked from taxpayers, the employees welcomed the opportunity to report to career civil servants instead of to shareholders.
Now, Barney is promising to assert his divine rights as owner of 80 percent of the corporation: “I think the time has come,” he growled, “to exercise our ownership rights … and then say as owner, ‘No, I’m not paying you the bonus. You didn’t perform. You didn’t live up to this contract.'”
Yes, those pesky contracts─to honor or not to honor them, that is the question. A question Barack Obama will easily circumvent. The president had already set a legal precedent by coming between delinquent borrowers and their lenders, allowing for contingencies under which a judge may break up those contracts. What do you know? The contracts of those who suck at the state’s teat are not sacrosanct! Again: good. Contracts are a feature of the voluntary free market; not a prerogative of members of the plundering, parasitical classes, among whom coercion is king.
A.I.G. opted for a state takeover. That means that Frank and Friends get to crack the whip─and extend their reach into the company’s every operational nook and cranny, terrorizing corporate tools in the process. This is the natural progression of financial fascism. It eventually ends in full nationalization. Let those who partake in this system suffocate in its deadly embrace.
The Treasury Department, and certainly Ben Bernanke, the Fed chairman, had been informed of the bonuses. They probably did not imagine booboisie would balk at a minor facet in the government’s major move on the banking and insurance sectors.
On a positive note: Some creative destruction may be at work. Companies and their CEOs will learn the hard way that it is better to accept bankruptcy, and search for gainful employment, than become Barney’s bitches.