Bawling over Bailouts
Mar. 15th, 2009 09:24 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
snousleOK, there's a big furor over AIG paying bonuses to its executives despite being bailed out. The CEO says that these represent contractual obligations. Maybe, maybe it's just an excuse. Anyway...
It's very easy to stand back and wag fingers at all the greed and corruption. However, when actual real-world politics is involved, losing only 1/10th of 1 percent of the money in a project to various kinds of graft is actually something to cheer about. When I try to get something done, I budget approximately FIFTEEN percent to the "bullshit tax", consisting of various middlemen and paper pushers who accomplish nothing of value other than getting in the way and taking their slice. Yes, you can righteously stamp it all out, but you end up standing alone and unable to get anything accomplished.
The sad fact is that in the real world of business, wheels must be greased, and just because the people involved are greedy and borderline criminal does not mean they don't have power over the outcome. Corruption certainly can get out of control, and in the worst cases absorb anywhere from half to nearly all of the funds intended for some constructive purpose. But, like so many annoying things, it can never be entirely eliminated. If the solvency of AIG is really an issue, risking its failure for one or two hundred million dollars is criminal recklessness. The executives involved need only make the smallest threat to abandon ship, and be the tiniest bit better than their replacements, to make all that bonus money a perfectly wise investment. I certainly see the case for just letting AIG die, but if that option is rejected, this degree of graft is almost pathetically small, and we ought to be grateful for that.
In fact, the bonus package in question is so small as to be kind of suspicious in itself. My guess is that there's a scandal here that's much larger and much better hidden than these little payouts suggest. I wouldn't be surprised if the bonuses will be magnanimously given up after a small, symbolic, and very calculated battle, undertaken only to to distract the public from the real bonus package. Which we will never hear about.
It's very easy to stand back and wag fingers at all the greed and corruption. However, when actual real-world politics is involved, losing only 1/10th of 1 percent of the money in a project to various kinds of graft is actually something to cheer about. When I try to get something done, I budget approximately FIFTEEN percent to the "bullshit tax", consisting of various middlemen and paper pushers who accomplish nothing of value other than getting in the way and taking their slice. Yes, you can righteously stamp it all out, but you end up standing alone and unable to get anything accomplished.
The sad fact is that in the real world of business, wheels must be greased, and just because the people involved are greedy and borderline criminal does not mean they don't have power over the outcome. Corruption certainly can get out of control, and in the worst cases absorb anywhere from half to nearly all of the funds intended for some constructive purpose. But, like so many annoying things, it can never be entirely eliminated. If the solvency of AIG is really an issue, risking its failure for one or two hundred million dollars is criminal recklessness. The executives involved need only make the smallest threat to abandon ship, and be the tiniest bit better than their replacements, to make all that bonus money a perfectly wise investment. I certainly see the case for just letting AIG die, but if that option is rejected, this degree of graft is almost pathetically small, and we ought to be grateful for that.
In fact, the bonus package in question is so small as to be kind of suspicious in itself. My guess is that there's a scandal here that's much larger and much better hidden than these little payouts suggest. I wouldn't be surprised if the bonuses will be magnanimously given up after a small, symbolic, and very calculated battle, undertaken only to to distract the public from the real bonus package. Which we will never hear about.
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no subject
Date: 2009-03-16 12:32 am (UTC)Better to keep people who understand and have worked with the instruments than to try to start from scratch.
Personally, I would have preferred they had negotiated lower bonuses.
But they had to pay something contractually otherwise more trust would be lost regarding the governments intentions.
And the public perception of the government being serious and tough would have been enhanced.
However, the reputation of all the parties involved is so low in the public mind that it probably wouldn't have mattered anyway.