Yesterday, as I was about to enjoy my copy of the NYTimes with my breakfast, I came across the news about AIG bonuses. Sure, it said that Geithner himself tried to stop the payments, that Summers was upset, that Liddy found the whole thing "distasteful" but, to no avail, the bonuses would be paid in full.
Then, I came accross the following quote:
“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he[Liddy] wrote Mr. Geithner on Saturday.
They are the brightest indeed!
How else would you rate someone who manages to get paid millions of dollars after proving beyond reasonable doubt to be either unscrupulous, extremely incompetent, or both.
Wall Street seems to be the only place where bankrupt companies continue to reward their employees for past successes that have resulted in the bankruptcy of the same companies. After all, the contracts negotiated by the AIG employees a year ago assumed that they were doing great deals for AIG, didn't they? How hard would it be to prove negligence when the same deals resulted in the failure of a formerly rated AAA company?
The explanation, hard as it may be, is that these people continue to behave as if the gravy train had not stopped, because it hasn't. For all its promises of change and its protestations about the republican administration, Obama tapped a member of the Greenspan Fed to reform the system. Thus, it is no wonder that we continue to insist in the narrative of Fuld et al being "the best and the brightest."
The sad thing is that as much as we critized the Japanese for not reforming their financial institutions and prolonging the crisis, we seem to be following the same script. At least, in their case, the excuse was that their culture, which promotes communal armony above all, precluded them from nationalizing and liquidating their banks. On the other hand, adding insult to injury in our case, we are simply being taken for a ride by the same people who created the problem.
So, don't blame Wall St. bankers for trying to get paid millions. That is their nature. The fault is with the administration which was supposed to be working for the rest of us.
By the way, I have no position in any financial stock, I am, however, an American taxpayer.