18 March 2009

I don't care that AIG paid those bonuses

Would it have been better for the company to call the bonuses "deferred compensation?" After all, these were retention bonuses - money paid at the end of a term of services which had been completed by the employees in question. That's not the same thing as what we typically think of as a bonus - a special reward for a job particularly well done. In AIG's current state, and as the recipient of many billions of taxpayers dollars, it's hard to understand how anybody could be doing a good job there. But if changing the name would make it okay to pay the money, then maybe the real lesson is that we just don't understand anything about it and we should all just shut up.

It's not as if the grandstanding politicians have any justification for their feigned outrage. These bonuses were known months ago. Sen. Christopher Dodd (D, CT) inserted a special provision into the recently passed "Stimulus Bill" protecting these very bonuses, and President Obama signed it into law.

Assuming, of course, that anybody who voted on that bill actually read it, nobody should have raised an eyebrow over AIG's actions. They all pre-approved it last month.

Only they didn't read the bill, did they? They don't have the foggiest notion where all those hundreds of billions of dollars are going, or even why. They just wanted to "do something." And now they want - and deserve - to have control over the operations of a business they cannot possibly improve with their input.

Those in favor or bailouts always argue that the businesses being bailed are just too important to fail; that their downfall will affect too many other businesses. But the fact is that if the government is bailing them out, they have already failed. No amount of tax dollars will change that fact. AIG is no longer AIG, and it's employees are now wards of the state.