The Bonus Round

Each day brings more news about the tens of millions of dollars in bonuses paid to current or former employees of AIG, the insurance giant that has so far received about $170 billion in taxpayer bailout money.

The news today is that there are likely some $60 million more in bonuses than originally publicized – the total is now upwards of $215 million, not just the $165 million we thought, according to the Not Bad, Considering…Nightly News.

Given what we know, how are we responding? Well…

The current head of AIG, Ed Liddy (he of the $1 annual salary) has asked some employees to return at least 50% of their bonuses. Folks took a bus tour of AIG executive mansions and AIG employees are receiving emailed death threats. People are protesting in the streets, in the blogosphere, and in every newspaper and magazine in the country. The Attorneys General of New York and Connecticut are issuing subpoenas seeking more information from AIG, including the names of bonus recipients. Congress is doing some collective chest-thumping, bizarre legislating and of course looking wherever they can to place the blame, with Democrats and Republicans alike pointing mostly at the current administration.

And yet, while our elected leaders are screaming about the behavior of AIG and other bailout recipients, they know (and we are now finding out) how much money they've received from the same troubled companies over the years. Connecticut’s Christopher Dodd, finger-pointer of the week, has received over $280,000 from AIG in contributions; NY’s Charles Schumer over $110,000. We can be sure they’re not alone.

This should not be surprising; we all know that most elected officials will take money from pretty much anyone. It’s always interesting when they later stand up anywhere within sight of a camera and scream at the top of their lungs about the horrible behavior of their contributors. Shareholders – that’s Joe Sixpack and all the rest of us on Main Street – loved Wall Street up until recently, and didn’t care about obscene executive pay, bonuses, golden parachutes or any of the whole ‘lifestyles of the rich and famous’ aspect of our irrationally exuberant financial wizards. Heck, they were making money for us, and we simply didn’t care. Neither did Congress. Neither did any regulatory agency, or any pension fund, or any Attorney General (other than Eliot Spitzer).

I think the bonuses stink – I can’t imagine how much these folks would have gotten in a good year, if they get as much as $4 million after a horrible one – but I’m not sure spending time trying to get the money back, or taxing them at 90%, or peeking in the windows of their homes, or threatening them, is going to make a bit of difference. Our problems are bigger than that, and the issues run deeper. For starters, why are we paying AIG partners 100 cents on the dollar for their contracts? I’m looking for the leader who can get us focused on that, instead of this nonsense.

Are you out there?

Sue