The funny thing about governing with an electoral mandate is that you never know what will make the public change their minds. Public opinion turned sharply against AIG following the news of the disbursement of the $165 million bonuses, to the point that popular support for future industry bailouts is threatened.
This is encouraging Congressional Democrats, particularly Senator Chuck Schumer, to say things like, “To those of you receiving bonuses, be forewarned: you will not keep them.” Which is outrageous.
The only argument that can be made for denial of prearranged compensation of employees is that they do not deserve it based on bad performance. That may be true, but that’s the fault of the folks who wrote the contacts.
You cannot decide not to honor your obligations just because you do not feel like it, which is basically the government’s decision. It does seem like strange practice to offer a lot of non-performance based bonuses, but rewarding poor performance might be reflective of bad decision making which landed them in this mess in the first place.
This public and Congressional anger, though, is kind of hypocritical because Congress has made a policy of compensating people who are doing a poor job with taxpayer money. Citi, Bank of America, GM, and the others receiving bailout money are all essentially poorly performing businesses getting public money precisely because they are performing poorly. Rewarding bad behavior is currently the government’s M.O.
The amount that Congress has doled out makes these bonuses look like crumbs, anyway. I know it sounds weird to say that $165 million is a small sum of money, but when the public is happy to give over a trillion away to businesses who kind of suck at doing business right now yet gets up in arms over having like a hundredth of a percent of that being apparently mismanaged makes me feel like I am on crazy pills. Giving AIG $70 billion is mismanaging public funds. We do not even know for sure that the bonuses are actually inappropriate.
There is, of course, the argument that now that the government (and by extension, the taxpayers) own 80 percent of AIG, then we should get to determine how the employees get paid. If there is a coordinated and comprehensive plan to restructure wages in order to make these companies that the public has bought more profitable, then some of these decisions might be defensible.
This, though, is typically in the realm of bankruptcy reorganizations, which this whole bailout fiasco was supposed to avoid. This corporation is now under government control by a government appointed CEO and being threatened on how they pay their people. This ordeal does not really build confidence in either AIG or the administration. So why were we avoiding bankruptcy and going into incredible debt again?
We, the taxpayers employ the Congress. If approval ratings for them dips to a low enough level, can we issue arbitrary demands about rescinding pay from Senators, like Schumer did?
Friday, March 20, 2009
Land of the Blind by Metro Spirit Writers While cutting AIG pay why not cut pay for Senators?
While cutting AIG pay why not cut pay for Senators?; by Brandon Hathaway; Metro Spirit