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UPDATE AT THE BOTTOM OF THE PAGE!!!
I know the readers of Cultural Capitol are probably sick of hearing me rant on this subject, and for your sake this will be my last post on the topic. The Editor has counseled moderation, and I know in my heart of hearts he’s right. But I can’t leave it without saying just this one more thing about the “popular” reaction to A. I. G.’s bonuses.
James Barron and Russ Buettner write in a human interest piece in today’s New York Times that “many [A. I. G.] workers felt demonized and betrayed. ‘It is as bad if not worse than McCarthyism,’ [an anonymous A. I. G. exec] said. Everyone has sacrificed the employees of A.I.G.’s financial products division, he said, ‘for their own political agenda.'”
Bless Barron and Buettner for trying to put a human face on this mess. But the execs who cry “I didn’t have anything to do with those credit problems” (James Haas) still don’t understand why their fellow citizens want to lynch them. Let me attempt to put a face on populist outrage.
The story in the Times today trying to defend Geitner puts the blame for his bad judgment (really, a complete lack of political common sense) on faceless “government lawyers” who told the Treasury secretary exactly what he wanted to hear:
On Tuesday last week, as he prepared for a meeting in London of the finance ministers of the Group of 20 nations, Mr. Geithner learned that A.I.G. by Sunday would send out the bonuses to employees at its financial products unit, which developed the risky derivatives now blamed for the global credit crisis.
With few senior political appointees on hand, the word came from one of the numerous career civil servants who keep the Treasury functioning through changes of administration, according to an official.
Mr. Geithner consulted lawyers. They told him the government could not override the contracts that the insurance conglomerate had signed in early 2008, when its financial products unit was fast losing money.
The Times piece tries hard to justify Geiter’s naivete, blaming his lapse on his “crushing workload,” and telling us he is “shouldering more crises on his slight frame than most Treasury secretaries ever have.” But that’s no excuse — either for him or for Obama. Geitner, whose instincts as the Times says “are that government should not dictate compensation issues to businesses,” suffers from the same free market fundamentalist dementia as a recent respondent to my earlier post. Let’s look at this pathology more closely in order to better understand it.
The plaque outside AIG's downtown HQ
I was going to write an angry piece on the AIG bonuses, the kind that uses a flamethrower to incinerate the subjects of my wrath. Then I took a walk down to AIG headquarters on Pine St. in Lower Manhattan. Unlike the offices in Greenwich, CT where the financial products guys reportedly work, an office which was receiving death threats, the main office downtown didn’t have any gawkers or thrill seekers (other than me).
I find this surprising. After all, to hear the internets tell it, people are spitting mad over the legalized Madoff make-off with tax payer money. (MoveOn cites the NY Times to estimate the AIG bailout is $500 from every tax payer in the USA.) And yet no one was storming the castle in downtown Manhattan. If anything, the corner of Wall and Broad, the place where a statue of Washington looks out on the NYSE, was buzzing with happy tourists.
He looks so serene.
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