Motley Moose – Archive

Since 2008 – Progress Through Politics

What is AIG?

I happened to be in the States for a few days, and I came home just in time for the explosion over AIG.

Yesterday some of you might have seen my diary quitting the blogsphere…of course I reconsidered, but in that diary I said that the blogsphere has become completely detached from reality…like the MSM has been.

Both of them are pushing the story of massive public outrage…but quite honestly, I don’t see it and in the last two days, I haven’t seen it.

Today I went shopping with my brother, had lunch with one of my best friends and had dinner with mom and dad…everyone wants a piece of my time while I’m back in the States.

In the past days, I have not heard anyone mention the AIG bonuses. In conversation, only I ever brought it up. My mother express her dissappointment and then changed the subject to my uncle’s divorce. My brother celebrated Obama’s insistance that the money be returned and then told me about his job search. My best friend asked me “What is AIG? Isn’t that one of those banks that we bailed out?”

The media and some of the netroots would like you to think the American people are beside themselves with outrage. They are so angry, they want to throw every rich person in jail and tax every cent of their earnings. They are so angry, Barack Obama better watch out! They’re so mad, they’re…doing what they always do?

That’s right, they’re so angry, they’re sitting in restaurants eating Caesar’s Salad talking about Natasha Richardson, they’re so outraged, they’re playing beer pong at McSorley’s pub tonight. They’re so flippin’ angry, they’re picking up the Daily News with a four page spread about the AIG bonuses and reading about it…oh, wait, they’re reading about why Lindsay Lohan’s arrest warrant was rescinded.

Perhaps I’m outraged at the outraged…or I’m just all outraged out. Al Giordano seems to read my mind on the netroots;

Nope, this is no more than the daily poutrage given an extra echo chamber by the very same corporate media that also overpays its executives while underpaying everyone else. Next week they’ll all be expressing their “outrage” about something else, and assigning it to the rest of us that simply aren’t shocked nor surprised nor blaming those that didn’t cause it – and are in fact acting to do something about it – for a bad situation that has been decades in the making.

For the rest of us, life and organizing go on. And we’ll look back at all this talk about our supposed “outrage” just as we have throughout the past year at the other manifestations of Chicken Littledom and faux-progressivism: just another tantrum by the usual suspects that got a day or two of news cycle from the corporate media led, itself, by greedy and overpaid executives.

Now, what was it that we are supposed to be outraged about today?

This sort of brings to mind a situation that happened to me a month ago in Greece. One night in Mykonos, I called my mom to check in and we talked for a while. She asked me if I could believe the woman who had eight kids after she already had six. I had no clue what she was talking about, and I had been watching both the Greek news and CNN International all week. My mom was surprised to hear “Octomom” as she called her didn’t make the news in Greece because “it’s on the news all the time”

My brother brought it up today when I spoke about the outrage. “Yes” he said, “This is what it was like when that story (Octomom) broke. 24/7 news coverage on how everyone is outraged.”

And the draconian populism explodes. Just like my mother arguing Ms. Octomom should have her ovaries ripped out, the media and the netroots are clapping their hands behild draconian, probably unconstitutional taxes to reclaim the bonuses.

I guess bonuses are the new Octomom.  


Categories: Uncategorized.

/ 31 Comments

31 comments

  1. creamer

     Its as if they enjoy pulling strings to see what kind of reaction they get. Bonus doesn’t even appear to be the proper term, as a lot of this money is being paid out to fulfill contracts based on a paticular time frame of employment, not performance. The MSM has done very little to explain exactly what theese bonuses are.

     I will say that for congress people, they are proably getting lots of angry mail, and asuming that people who write their congressmen might be more apt to support them financially there is a reason for their apparent outrage.

    Its time to put this behind us. Maybe we can rewrite their contracts going forward, maybe we just fire them. All this talk of retroactive taxes is proably unconstitutional.

    We have two wars to end, healthcare to pass and a country to save. Its time to hold our noses and move forward.

  2. Peter Jukes

    a) Great you’ve stuck around

    b) The proof is in the pudding – this diary.

    I know lots of journalists (disclosure – was married to a very good senior British one) and while I would except her completely, a lot of news in both print and screen is driven by an escalatory game of, as Al Giordano puts it, “poutrage”.

    Of course we all know the reasons for that: page hits, Nielsson ratings, circulation wars, anger and scandal sell. But there’s a more important agenda going in the media which some of us forget.

    I can’t tell you how many of my generation, coming of age in the early 80s, while heavily politicised and interested in power, decide to avoid the uncertain, and (in the UK) poorly paid role of politician. What did they do instead?

    Well, the chemists and the engineers and the mathematicians went into finance. There they could become lords of the universe, and while a lot of this was about money, a lot of it was also about power. They knew that in the days of junk bonds and insider dealing, or more positively tech innovation and genomics, they could seal the fate of companies and industries. It was money – but money with cloud.

    The more literate, less numerate, all went into the media. I remember thinking, with its HQ of Broadcasting House directly opposite the spire of All Saints on Portland Place, that Broadcast and the BBC in particular, was to late 20th Century Britain what the Anglican Church was in the 19th century: the place where pious public service met the self interest of sinecure and power over the ideology of the nation.

    It’s different in the US – you don’t have an established church or a big ‘public broadcasting’ sector: but the motives are the same. If you join the media, you can have money, fame and prestige of ‘influence’. A well placed journalist or reporter has access to the inner circles of power. He or she is wined and dined at Number 10 (or by John McCain). The right backing at the right time can help swing an election. The right smear or op-ed can create a torrent that can ruin careers, and even bring a government. There were elements of this in British politics from the Profumo affair which brought MacMillan’s 60s government down, to the fall of Callaghan, Thatcher, Major and the current parlous demise of Brown.

    Media is just medium after all. But if politics is show business for ugly people, journalism is too often politics for show business people. In this regard, Al Giordano and you have it just right:

    An extra echo chamber by the very same corporate media that also overpays its executives while underpaying everyone else.

    Finally – forgive this long post because you hit a nerve and prompted something I’ve always wanted to say – this is why I value the blogosphere, especially for the drilling down and the different emotional tempos you find here. Blogs can be inaccurate. But every single newspaper story I have had any real personal knowledge of, and there have been a few, has got the facts at least 50 per cent wrong. At least there’s no pretence of complete neutrality or objectivity here. And there’s also a chance to break the templates and formats of conventional reporting, with its emphasis on 24 hour news.

    More diaries and comments come on big news days. When there’s less going on and little to comment about, the blogs go quiet. That’s as it should be. Constantly streamed news makes every day equally noteworthy, and equally insignificant; every story world-stopping and scandalous, and nothing means anything anymore

    Only places like this, and the other online commenters you guys refer me to, have restored my faith in real news.

  3. Jjc2008

    If people do not get now why “MERIT PAY” aka BONUS pay sets up the worst kind of competitive, insane, justification for lying, cheating, I do not know what will.  Just now, on MSNBC, Matthews (someone I pretty much despise for his elitism and misogynistic views) asked a good question:  What are the bonuses for?  A good job?  What?

    The other person in the discussion (I don’t know who it was) said something I have believed forever: the BONUSES get paid no matter what.  That’s the big, insider joke on Wall Street everyone knows….

    I have been opposed to the notion of MERIT PAY in education forever.  And while this story has nothing to do with that issue, it should.  If people cannot see the greed factor at play here, if we cannot see how even in the areas that are supposed to be competitive, be pure capitalism at work, how easily greed takes over, I do not know what will.  

    Educators have one thing in common with those on Wall Street.  We’re human.  No one is immune to the temptations of money and power as we are seeing unfold.

    When this all comes out, I believe it will be shown that “cheating” occurred.  Every piece of research shows that when “merit” or bonus pay is involved, cheating can and does occur.

    Just had to get this off my chest.

  4. John Allen

    and always seem to have the ‘outrageous story of the day’. These are often non-important stories that distract the public from what is really going on in the world. Let’s talk about Anna Nicole or Octomom and ignore the fact that our leaders are torturing people with Gestapo tactics.

    What gets me is that people seem to think the outrage is silly. The anger over Octomom wasn’t silly. It was an outrageous event. Paying bonuses to the very people that wrecked the financial world is another outrageous story.

    It isn’t that people are easily outraged. It is that there are so many outrageous stories out there that one can’t hold on to the last one when a new one comes along. And lately, there seems to be a new one every day.

    The problem isn’t media generated outrage. The problem is that there isn’t enough outrage to change things.

  5. psychodrew

    That picture reminds me of how much I miss Asia.

    I think that we need to accept the fact that we got swindled and move on with it.  We need to be trying to find ways to make sure this never happens again rather than waste our time trying to get this money back.

    We got screwed.  We can’t change it.  We need to get over it.

  6. Neef

    I can’t find it in myself to get outraged over AIG bonuses. I could probably admit to “rueful annoyance”. Maybe “pique”.

    NASDAQ is now higher than it was before Obama took office. I think that’s important. AIG is a kerfuffle, and at least partially fanned by our political opponents.

  7. John Allen

    since it isn’t about outrage or even limited to AIG.

    When TARP was first proposed there was talk about holding auctions. I assume the auctions would be for the purchase of bad debts. I’m wondering why this wasn’t tried.

    What if the Feds held a reverse auction for bad debts or CDOs/CDSs? Firms would be able to enter a bid, more like offer to sell, for any debts they want off their books. Company A might offer a package of one billion for 80 cents on the dollar. Company B might offer theirs for 70 cents on the dollar. The more desperate they are to get these off their books, the lower they will go. The government could then clean up the CDSs and sell off the remainder or sell the whole thing off at a loss. The loss would be far less than we are seeing now.

  8. rfahey22

    We’re transferring large amounts of money to various private parties – some graft is natural under those circumstances.  Geithner has no staff and the contracts were in place in 2008.  If AIG breaches the contracts, they probably still wind up paying the bonuses anyway plus absorbing litigation fees.  And, since we own 80% of AIG, that means that we would be hurting our own investment.  Booman had a nice comment on this today:

    Now, it is pure political gold to criticize a decision to pay millions to people that performed miserably and that ruined their company and the national and global economy in the process. But a lot of this criticism is self-defeating. The American taxpayer now owns about 80% of AIG and has a compelling interest in the return to health of this major insurance corporation. We will lose our investment if AIG fails. Most majority stockholders are smart enough not to destroy the brand name of their company by making incessant criticisms of their company’s performance and competency. This is not the case, apparently, for our Congress members. They would rather score cheap political points than safeguard our investment.

    I do think, though, that it would be beneficial for someone from the administration regarding its approach to executive compensation.  I understand the argument that when you have a huge mess on your hands, sometimes you need to retain the people who were involved in that mess to help you pick up the pieces, because new employees may never be able to understand what happened.  I also understand that one would not want to scare away talented people from taking jobs that are necessary to rehabilitate these companies.  But I would like to see some sort of cost-benefit analysis suggesting that such concerns legitimated their approach.

    Finally, I share your concern about the outrage shown on some blogs.  It seems as though the biggest fomenters of outrage have no background in economics or law and that their stock solutions are to fire Geithner/Summers and AIG employees, and/or to let AIG fail, without any consideration as to whether any of those acts would make the situation worse.  Now, I don’t think that one needs a deep background in either subject to make valid observations or criticisms, but I also don’t think that it’s too much to ask that the leaders of a movement to make the above changes have some familiarity with the issues at hand.  

    As Socrates is alleged to have said, “I know very well that I am not wise, even in the smallest degree,” and “I do not think that I know what I do not know.”  A little humility in the blogosphere, I think, is a good thing.

     

  9. rfahey22

    What I’m saying is that a lot of the proposals I’ve seen online about how to deal with the situation seem to be reactionary and not very well thought out.  For example, getting rid of Geithner might be a feel-good move but I’m not sure that going a few months without a Treasury secretary is a good idea, especially when key positions at the agency remain unfilled.  Firing the AIG people might also feel good, but how long is it going to take to replace them, and how long is it going to take those replacements to be brought up to speed, and how much damage is that going to cause in the meantime?  As bad as things are, they can always be made worse without careful planning.  

Comments are closed.