Far from restraining the AIG lynch mob (see most recent post: Will No One Restrain the AIG Lynching Mob?), politicians continue to fall over themselves trying to get to the front line of that mob. The president appeared on Jay Leno last night to express his shock and dismay that AIG would pay bonuses (Obama Talks Economy, Puppies With Leno) while his Congress was advancing a bill to tax practically all of the bonuses paid this year to employees of bailed-out firms (House Approves 90% Tax on Bonuses After Bailouts). You’d think AIG was the source of all evil in the financial world, and that all that was necessary to right the country’s economic ship was to make sure AIG is blamed…and is made to suffer. And you’d think our government leaders have no more important problems to solve than to take charge of incentive compensation planning for the financial services industry.
Much of the public can be forgiven for its rage against AIG since all they know of the firm are those three letters and whatever snippet of fact the media has doled out to them in the bite-sized chunks in which news is now consumed. But our government leaders cannot be so easily forgiven for pandering to fact-starved populist rage. Neither can those of us in the insurance industry who know AIG as a fellow participant in that industry be so easily forgiven if we join in the chorus that would seem to blame AIG for all that is wrong with our current financial and economic world.
You and I know that AIG is composed of individuals much like us: people who have mortgages, pay bills and taxes (oh, yes, lots of those), send children to college, have health issues, and on and on. To a bruised public, AIG is just a bunch of greedy rich guys…because that’s what their government leaders and the professional news media are telling them. In fact, the moral of their story is that “Wall Street greed” has brought on this crisis, as if greed knows no other address. On the contrary, the dictionary defines greed ”an overwhelming desire to have more of something, such as money, than is actually needed,” and there’s not a door in America where that temptation has not knocked. Greed is not defined by how much you have, but by how much more you want than what you have or need. Some of the biggest critics of greed are themselves animated by envy – and such baser motives know no class distinctions.
I am in no way trying to whitewash AIG and whatever errors may have been committed by them. And if there are scoundrels there, they ought to be identified, tried, and made to suffer for their mischief. But to tarnish an entire company, largely for decisions that the government had approved before they became public seems at best a waste of precious time and at worst a wrong that harms not just the victims but the perpetrators and the observers as well.
When the country sobers up after lynching AIG, they will recognize that we are no closer to getting our economic engine on track. When that happens, will we begin to focus on solving problems or will we just look for another whipping boy? If the latter, be careful – it might just be your employer.
Tags: AIG, financial crisis, greed, Insurance
March 25, 2009 at 10:21 am |
Turns out March 25th is a pretty good day for common sense (the raging fires of populist/congressional indiscriminate anger may have subsided just long enough for cooler heads to get a word in edgewise. Check out this trifecta of sensibility:
1) A recent resignation letter from an executive of AIG’s Financial Products Division. (The NY Times is a free site, but registration may be required.)
2) Holman Jenkins of the Wall Street Journal ascribes shame where it belongs in The Real AIG Disgrace. (The WSJ may require a paid subscription to view)
3) And then we have Nathan Conz of Insurance & Technology who gives us Misplaced Outrage or Righteous Anger?
March 26, 2009 at 9:10 am |
March 26th hasn’t been too shabby for common sense either. Here’s Joseph Paduda of Managed Care Matters, and he says “the last word” in the matter has been written – which is okay with me.
April 7, 2009 at 4:49 pm |
As someone who works with many people at AIG on a daily basis, I can attest that the public perception of AIG employees is largely used to sell papers and provide a bully pulpit for politicos and pundits. The majority of the folks that I work with are hard working people who have been more victimized by the mistakes of a handful of their co-workers than most taxpayers can imagine.
April 7, 2009 at 5:36 pm |
I know many people believe what you have expressed, Charlie.