Dusting Off the Guillotines
83The news has been buzzing with anger over the $165 million in bonuses insurance corporation AIG plans to shell out to its executives, especially after the news broke that the majority of bonuses were going to AIG's Financial Products Unit, the same unit whose unregulated financial shenanigans brought the company - and the world economy - to its knees.
This behavior should come as a surprise to no one. After all, this is the same company that managed to spend more than $400,000 on an executive retreat less than a week after receiving $80 billion in taxpayer funded bailout money back in October.
The surprising thing is that we're letting them get away with it. Again.
Turns out that good ol' Shrub, who was wrong about so much, can add one more thing to his list: "Fool me once, shame on — shame on you. Fool me — you can't get fooled again."
AIG isn't the only focus of populist outrage. The courtroom erupted into loud laughter when Ira Sorkin, lawyer of Bernie Madoff, who swindled more than 4,000 individuals and organizations out of more than $60 billion dollars, argued that his client should go free on bail after pleading guilty to his crimes. The judge sided with the crowd - Bernie was led away in handcuffs to await his sentence in jail.
The Detroit automakers also fell afoul of the country's current mood when the Big Three CEO's each flew a separate private jet to Washington to beg for taxpayer money to save their failing companies from their own mismanagement.
These people make Marie Antoinette look sensitive and in touch with the mood of her times.
"Madame Deficit," as she was known by her angry contemporaries, probably never uttered the famous phrase "Let them eat cake." Modern historians believe the actual culprit was Louis XIV's much stupider and more sheltered wife Marie-Therese.
However, nobody can argue that prancing around in expensive hats pretending to be a shepherdess while real shepherdesses were starving wasn't a PR disaster of truly colossal proportions.
Poor Marie paid for her mistakes with her head. Will the corporate CEOs whose decisions led to the current financial crisis pay for theirs? Will they even admit them?
Where is the Accountability?
Chuck Grassley is shocked - shocked! - to learn that gambling is going on in here. Having voted for the deregulation that contributed to the current financial crisis, Senator Grassley has about as much credibility as Inspector Renault pocketing his earnings.
However, he did get one thing right in his initial call for AIG executives to commit suicide, and his subsequent retraction:
Where is the contrition? Where is the accountability? The CEOs of companies such as AIG, Citibank, and GM not only haven't acknowledged their mistakes, they're actively playing the American public for fools. When the AIG bonuses scandal broke, CEO Edward Liddy wrote a remarkably cynical letter to Treasury Secretary Timothy Geithner explaining that paying the bonuses was necessary, among other reasons, because without doing so, AIG would not be able to attract and keep "the best" employees if they believed that their compensation would be "subject to continued and arbitrary adjustment by the U.S. Treasury."
Considering the bang-up job AIG did attracting "the best" employees when their bonus policies were not overseen by the government, I really think we can afford the risk, especially now that we, the taxpayers, now own 80% of the company, whose reckless and irresponsible policies (which themselves bordered on an illegal Ponzi scheme such as that headed by the fallen crook Bernie Madoff) nearly brought the entire world's economy to its knees.
So fuck you, Mr. Liddy.
Tempting as it might be to start dragging out the guillotines, we can't forget where that got the French, or where the hail of bullets that ended their similarly extravagant, out of touch monarchy landed the Russians.
Lying down and rolling over as the super-wealthy continue to build themselves a second (third? hundredth?) Gilded Age at the expense of American taxpayers is no more viable an outcome, however.
Smarter and more knowledgeable minds than mine will need to come up with a real solution, but I think an important starting point is education. The more we, the general public, know about the dirty dealings going on behind closed doors on Wall Street and in Washington, the better the chance we have of stopping them. I'll be honest: the current crisis has stretched my knowledge and understanding of economics to the limit and beyond, but every day I'm learning more, and the more I learn, the madder I get.
Though I was more informed than some over the last eight years, thanks to a deep-rooted hatred and mistrust of George Bush and everything that came out of his mouth - his perpetual, disingenuous economic optimism included - I still had no idea of the true depth of the problem until last year. If I and every taxpayer had been more knowledgeable and informed about financial issues in the first place, instead of accepting the pronouncements of CEOs, politicians, and the media at their word, the crisis might have been avoided.
Fool me once, shame on you. Fool me twice, shame on me. But I, for one, refuse to be fooled again.
Meanwhile, I've started knitting again. Just in case.
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Do Summers and Geithner Need to Go?
- The real scandal at AIG
Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars? - The Potentially Larger AIG Problem
The political hue and cry over the millions in bonuses for AIG execs has hit fever pitch but there are major questions about what AIG has done with far larger portions of the federal bailout money it's received.
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KerryG, if we just don't keep bailing these people out, there will be no need for guillotines.
And accountability? These people are employees. Who owns their businesses? Who has the majority of shares? Whoever it is, if they had been personally liable for the loss, would have done a better job of overseeing things. It's the limited liability of corporations that destroys accountability.
Righteous anger. Yet misplaced. Neither AIG nor other corporations can control taxpayers money. Government do. And once money are handed out by government no strings attached, corparations can spend them as they see fit...
Kerry- Although bonuses/holidaying with tax payer money is shameful. But at the same time this is the largest insurance company in the world and is based in 130 countries. I guess the government justification that this company is too big and would have disastrous ripple effects across the globe does make some sense when they say it is "too big and can't be allowed to fail". Good thought provoking hub.
Nice job, Kerry. The AIG situation was handled very poorly by all concerned with the result that the public's faith in our economic and political system has been undermined, not the least because there were serious conflicts of interest among the key players (Paulsen and Blankfein, Goldman CEO. This fiasco comes on top of three decades of growing income disparity fueled by CEO greed and voodoo, supply side tax breaks for the richest Americans. Just now on the Lehrer News Hour I watched a segment about a new book about a bombing that occurred in front of JP Morgan;s bank during the depression, killing 38 people. Despite efforts by the FBI and NYPD the crime was never solved. This was the greatest acti of domestic terrorism until the Oklahoma City federal building was bombed in 1995.
Kerry, this is fantastic. I'd like a giant banner for the front of my house with your title on it...along with an "Eat the Rich" one for the garage. If we don't use this time to wrest control of our country from those who would consign us to permanent serfdom - well, perhaps we deserve what we get.
I can't tell you how completely I agree with everything you've said here. I too have a little list - but I'll bring my embroidery, if that's okay. :-)
A guillotine would be the easy way out, they should be thrown into poverty and and wrapped in an old blanket for warmth carry a sign that reads " Homeless Please help" that would be true punishment. And maybe even that would be too good for them but let us not end their misery quickly by lopping off their heads, maybe a cell with Bernie for the rest of their lives would be good. the inmates would love the pretty ones. They could get it stuck to them the way they stuck it to the american public.
One more thought if I may....Great article Kerryg
Issues, Aya, and Misha, I wrote this hub in a fit of annoyance over Liddy's smugly infuriating letter, so the CEOs and other executives were the aspect I focused on, but I do agree with all of you that it's a systemic problem involving the current and all recent presidents, Congress, the media, and the owners/shareholders of the corporatations as well as the executives themselves. However, that's several more hubs worth of material!
Alot of anger going on today. But I'm with you. Here's another hub that might get you riled up
I got a little more to say, sorry but I do. 12 people no longer on the payroll for AIG getting a million dollar bonus. put that into the unemployment accounts and help those who really need it. Extend unemployment for those who deserve it. WOW 12 million dollars to help those who really need it. the X employees, I'm sure can get by on what they have already stashed away while working for AIG, perhaps they might have to give up the yacht and a car or two....poor babies
I got a little more to say, sorry but I do. 12 people no longer on the payroll for AIG getting a million dollar bonus. put that into the unemployment accounts and help those who really need it. Extend unemployment for those who deserve it. WOW 12 million dollars to help those who really need it. the X employees, I'm sure can get by on what they have already stashed away while working for AIG, perhaps they might have to give up the yacht and a car or two....poor babies
Hang Chris Dodd while we are at It to , he put In that clause for their bonuses ! And I want to cash In for my share of that 80 % ,I want no help from our Government !
tony0724, be fair to Dodd - his original clause would have denied the bonuses, but Geithner and Summers felt that was "too aggressive" and got him to rewrite it. Blame them, not Dodd.
TheSandman, I've heard that too. I wouldn't have thought it was possible to be angrier about this, but paying "retention" bonuses to employees who have already left the company does it!
goldentoad, thanks for the rec!
And thanks to CW, Ralph, and MindField for your comments!
I should also add, Tony, that conservatives are hardly blameless in this matter either: http://blogs.tnr.com/tnr/blogs/the_plank/archive/2
I understand the anger, but this has been going on for at least six months, probably longer. When the bank I worked for failed, all the top executives left with big money because technically, since they didn't take TARP funds (the bank forced to buy them did), none of the rules limiting executive compensation applied. So they were richly rewarded for killing the bank, and thousands of ordinary employees lost their jobs.
Well I hated that job and I learned a lot working there, all of it negative but definitely worth knowing. But what troubles me about this AIG stuff is the public is being manipulated. We're being jerked around over this. This outrageous compensation crap has been going on for a long, long time. If we'd have seen more righteous anger earlier, maybe the financial system wouldn't melting down now.
I do agree we are being played for fools though. More and more I think this can't end well. It's very bad. We should start an HP knitting circle for when it all goes down. We'll need the support!
PS--Misha says sugar, salt, and matches. Make sure you have plenty. I'm also stocking dry beans and rice. :0)
I better learn to shoot though.
Best add iodine and medical basics.
I wonder what Mme Defarge was knitting as she sat by the guillotine. Probably socks. Personally I'll be knitting blankets. It might be a long, hard winter.
And now four months later, what have we seen about all of this? It's been swept under the carpet, as it were. I am still awaiting the prosecutions and the ridding of the White House staff of former AIG employees and the mindset which brought much of this disaster about.
Cheers!
Chef Jeff.
All in all, I don't think it would hurt to bring out the guillotines for just a day or two.
I have to spit this one out:http://www.thetruthseeker.co.uk/?p=24236 Our country is being destroyed and no one is doing anything
“Banking was conceived in iniquity and was born in sin.
The Bankers own the earth. Take it away from them,
but leave them the power to create deposits,
and with the flick of the pen they will
create enough deposits to buy it back again.
However, take it away from them, and
all the great fortunes like mine
will disappear and they ought to disappear, for
this would be a happier and better world to live in.
But, if you wish to remain the slaves of Bankers
and pay the cost of your own slavery,
let them continue to create deposits.”
Sir Josiah Stamp
(1880-1941) President of the Bank of England in the 1920?s, the second richest man in Britain, speaking at the Commencement Address of the University of Texas in 1927.
These quotes both highlight the extreme importance of the greatest questions that never gets asked by, or put to, our political leaders (nor the media) today……here are those questions:
WHY DOES THE ISSUANCE OF MONEY NOT REST WITH ‘WE THE PEOPLE’ TO WHOM IT PROPERLY BELONGS?
WHY DOES THIS ENORMOUS POWER REST IN THE HANDS OF PRIVATELY OWNED CORPORATIONS, THE INTERNATIONAL BANKS?
WHY IS 97% OF OUR MONEY CREATED AS DEBT BY BANKERS (TO WHOM WE ‘PAY BACK’ MANY TIMES THE SUM ‘BORROWED’) AND NOT CREATED DEBT-FREE BY OUR OWN ELECTED GOVERNMENT?
IS THIS MECHANISM NOT A FRAUD AGAINST THE PEOPLE AND DOES NOT THIS MASSIVELY ENRICHING FRAUD ENSURE THAT, IN PRACTICE, THE INTERNATIONAL BANKERS ARE OUR REAL GOVERNMENT?
Photo Credit
issues veritas 3 years ago
kerryg
I agree with a lot of your hub but I Bush didn't do it all alone, he had 537 politicians helping him along. My blame is on the entire system, especially Congress. Anything that Bush did that wasn't right they could have made it better, but when you have Bush doing one thing wrong and the Congress doing a different thing wrong, then you have two things wrong.
The two party system is the problem, they just can't do anything good together.
You are right that there is no accountability and I can't remember if or whenever there was accountability. Also, having a 2 year campaign for President really stopped Congress in its tracks, not that we noticed the difference. The Senators and Congressmen that were running for the election either the Presidency or re-election in Congress didn't do much other than campaign. The ones that weren't running took to raising money for their party. In the end, nothing was accomplished for good of the country.
So in my opinion, not only did our economic system fail but so did our political system.