Few exchanges have so captured the disconnect that makes this situation so politically explosive. We're collectively taking our country's future in our hands, spending vast sums of money to keep these companies from suffering the consequences of their own folly and (in many cases) criminality. And in return we're receiving cavalier dictates about pay-outs and bonuses from executives who by any reasonable measure work for us -- dictates we promptly accede to. There's a beggars can't be choosers problem there. And the disconnect is so mighty that it fuels the impression that the whole enterprise is not what it seems, not what we've been told, that in addition to picking up the tab we're being played for fools.And while that's correct, the real problem with AIG is that CEO Edward Liddy can actually tell Timmy and Ben to go intercourse themselves with farm implements because AIG really does have the global economy over a barrel. If AIG goes under, the global financial system goes under with it. Period. Checkmate.
So nothing will be done in the long run. We'll continue to shovel money into the AIG furnace and shut the hell up like good little boys and girls, or the counterparty system will annhilate the entire system of global finance, leading to a total collapse of the whole pyramid. Lehman Bros. was allowed to die, and as a result the global banking system nearly went under. It will not be allowed to happen again with a much, much larger company like AIG.
AIG knows it can do whatever it wants to do right now. It's bulletproof. If it wants to give bonuses, it will. Honestly, what's the government going to do about it? Let the largest insurance company in the world go bankrupt and collapse the world?
Ask yourself how AIG was allowed to get this large and this important in the first place: complete failure of Federal oversight. Those are the people we need to be angry at here, not just AIG...Democrats and Republicans alike.
[UPDATE] Obama is trying to pursue "every legal avenue" to block AIG's bonuses. There's really not much the government can do, frankly, short of mass firings and forcing AIG to break contracts to employees.
[UPDATE 2] Or as Atrios says, if it's a problem, just nationalize the assholes already. If Marcy Wheeler is right over at Fire Dog Lake, they're basically extorting billions from us with this little bonus plan. Pay up or else, they say. The "or else" needs to be "We own you and we're firing all of you. Now."
Posts
