There's a great deal of anger being expressed over the AIG executive bonus scandal (I'm sure someone will dub this 'AIG-Gate'!). It's understandable, but I'm beginning to wonder how much of this is projected anger?
To those of us novitiates, its really hard to imagine that no one saw something like this coming - either Congress last year in approving the bailouts, or even the Obama administration this year. Didn't anyone go over the books and see what was due to be paid out in executive compensation?!
AIG was rescued, being given $170 billion because it was 'too big to fail'. If the company was that big, did no one figure in an age of huge executive bonuses, that AIG had some outstanding 'bonus bills'?
Of course some of this is a political posturing (especially Senator Chuck Grassley's call for AIG executives to commit Hari-Kari). But there are those whose angst is real and it suggests to me at least three things:
1. I'm reminded of the junior high teacher of mine who wanted to make sure that his connection to a potential donor went to someone who doesn't 'game the system', and the many people who have always spoken scathingly about the 'undeserving poor' (pan handlers, the homeless and those on welfare, etc.); meanwhile, the Bernie Madoff's and corporate scam artists on Wall Street (AIG and others) were stealing this country blind enough to cause near world-wide economic collapse! Of course, when this is pointed out, someone out there making $35,000 a year, will still standing up for someone with a $3 million bonus, will accuse anyone who says this of inciting 'class warfare' (sigh)...
2. It also shows that those who cry for the market to regulate itself haven't quite grasped the idea that the market has only as much morality as those who operate within it. Even now, those who called for more deregulation while this house of cards was being built are now crying for regulation. It's analogous to a robber crying out to a homeowner, "I've got your jewelry...PLEASE call the cops so I won't take your silver too! I can't help myself!"
3. But probably the most alarming thing is that this giant scheme was being foisted on the country (the world actually), in such a way that all of us benefited from it, and to such an extent that no one asked many hard questions. Jon Stewart, rightly points out that the media finance gurus at CNBC and elsewhere, had to know that what our economy was shifting from a manufacturing base to one built on the prospective value of paper! Yet they encouraged these investments as sound.
And the rest of us, are made to feel somewhat complicit in the sense that our 401k's, the mortgages we couldn't afford with our middle class incomes and the cars we drove all allowed us the illusion of comfort we 'earned' with our hard earned dollars.
The bailouts, being touted by politicians, economists, pundits and everyone in between sink us deeper into debt, without concrete assurance that they will work, or when they will work. And now the guys who 'did it' get paid! Oh some low level grunts will get $1000, some $5000. But others will get millions! Andrew Cuomo, New York attorney general, revealed that 73 AIG executives were paid at least $1 million or more. We feel foolish. We feel angry, because America prizes security above anything else. This is a country which, for awhile, was willing to hand over our civil liberties, almost without question, just so we could feel 'secure'. Now we find out that what made many of us feel most secure: our money, our possessions, our toys, didn't represent the security we thought they did.
I believe along with most others that we will pull through all of this. Not only this, but we can come out stronger. But I wonder whether we will come out of this any wiser, any more charitable. Will we actually begin to see that our greatest resources are our fellow citizens? Or will we return to our selfishness, isolationism and materialism?
A few years ago, we thought we had learned our lesson. Gordon Gekko in the movie Wall Street, was popular because we recognized the folly of his argument that 'Greed is good...'
And then we forgot...and got greedy.