Saturday, March 21, 2009

America: Regarding AIG - You're Full of It

My son, who works for AIG, came home from Los Angeles for the weekend. He knows all of the inner workings and facts about AIG and is heartily pissed off about the public brouhaha over the bonuses.

Some asshat in the media heard about some AIG executives getting paid 165 million dollars in bonuses and, oh, ain't it awful. Obviously, these greedy and irresponsible cigar-chomping, brandy-swizzling fatcats took their huge check from the government and immediately divided up the spoils. No doubt they twirled the ends of their Snidely Whiplash mustaches, snickered and said to America "Thanks Suckers! Ha ha ha ha ha haaaaa!"

Joe Sixpack and Harry Hardhat did an immediate boil-over; "kill those executives! Kill them we say!"

Only it didn't really happen that way. But why didn't the Democrats speak up and set the record straight? The answer is simple: when the people are mightily pissed off, you don't risk making it worse by telling them they're wrong. Even when they are.

Democrat politicians, being moral cowards who live and die by polls and the direction of political winds, immediately expressed faux moral outrage and planned retroactive tax legislation that would tax the bonuses at 90% (it's unconstitutional -- something known as ex post facto law). Instead of telling the American people they had it all wrong, the Dems merely went along, tossed hither and yon by the prevailing currents of public opinion. The safe thing would be to deny knowledge of the bonuses (they knew) or approval (they approved them). Better to fake moral outrage, surprise and anger.

The truth is, those executives had bonus contracts in place before the downturn and before the bail-out. They have as much of a legal right to their contractual payments as does any vendor -- the landlord who owns the office building, the employees who get the paychecks, the insurance producers who get the commissions. Without getting paid, talent disappears quite quickly. The public anger is born of ignorance and a false impression of what actually happened, reinforced by cowardly politicians who won't risk the backlash of telling an unpopular truth. So an American corporation is now the target of a smear campaign and intense negative publicity.

My son tells me that the AIG office building in Los Angeles is encircled now by unmarked police cars, to protect the executives. The bad publicity has resulted in AIG losing millions of dollars in business and revenues as companies and individuals take their business elsewhere.

So let's see -- billions of dollars in loans to save AIG from a terrible economy that was created by government (in the subprime mortgage imbroglio); and now falsely denouncing AIG and punishing it for honoring its contractual obligations, with the result that talented excutives will go elsewhere where they can get paid, and insurance business will go elsewhere to avoid fallout from the negative publicity. Now AIG may fail because of it. And those billions in loans will never be paid back at all.

Way to shoot yourself in the foot, America.

See a related article at The Other McCain: MSNBC Omits Facts on AIG Protests.

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