Rex Murphy did a bit on AIG last night after the news. I can’t find it online though – I guess the internet is slacking of.
Rex made a couple interesting points:
- The AIG chairman only gets paid $1 a year (no mention of other forms
of compensation though, besides the bonus) - The rescue bill that’s paying the bonuses explicitly allows for bonuses
- The larger stimulus bill has over 200 “special” projects targeted
specifically by the congressmen who are so furious about the AIG
bonuses
So basically it comes down the AIG “fiasco” being a cover-up for how much the congress (and the senate I suppose) are taking advantage of Great Depression II to dole out the thank-you money for the lobby groups who supported them during the election.
I am normally in favour of market solutions, but JMK taught us the reactions to a system shock take longer to actually happen than when we graph them in our Econ 101 class. So I accept the government has to intervene, but there needs to be some pain, there needs to be a lesson for history to teach us. And I believe less in “innocent by-standers” than I do in gov’t intervention, so I think all those poor investors who believed it was true even though it was so good need to suffer as well as the people in AIG, etc. whose job it was to see this coming and yet ignored the warning signs.
Here’s a bit of a humorous take on the subject: In New Terror Video, AIG Demands Huge Ransom from U.S. (thanks to Brian for the link)
Cross-posted on Cameron-Schultz at Bonuses for AIG