http://www.nytimes.com/2009/03/17/business/17sorkin.html
There is simply no case. Any and all arguments are superficial and do not hold up to even the simplest scrutiny.
Argument 1. Sanctity of Contracts.
There is no such thing as sanctity of contracts as far as "retention bonuses" for any AIG employee goes unless he or she is a PR agent. Retention bonuses are for people to stay back. And as the author himself describes, many have already packed up and still received their so called retention bonuses and you and I know that the minute they receive the money, so will the rest. Moreover, by definition a bonus is a share of the profits from a profitable company that goes to an employee for having made a significantly positivie contribution to that company's profits. Hmm.. AIG has plunged depths that even the Dutch East India Company didn't and not only did these employees NOT contribute anything, they were directly party to the mess the world financial markets are in.
The emotional would also add that if the sanctity of contracts is not upheld for the millions of middle class workers in the Auto, IT, Manufacturing etc. etc. sectors, why in the bloody hell is it important to uphold it for incompetent fatcats?
If Auto contracts are only under "negotiation" so are these. We know finally how the blue collars at GM & C etc. will fare. So please spare us the hijinks.
Argument 2. A.I.G. built this bomb, and it may be the only outfit that really knows how to defuse it. taxpayers need to keep some of these brainiacs in their seats.
Bollocks. First AIG didn't build it. It was a second rate party that gave the people who built it, the erstwhile Wall Street, the rating organisations and the Main Street divisions, the bulwark to keep going at it by insuring possible defaults to the main culprit, CDOs, by issuing CDSes.
Now... the people who created CDOs.. you gotta admire them ... give loans, chop em up and sell them and other parties make CDOs and spread it around till no one can actually see any risk. Now on the other hand how can anyone who insures these things be anything but a complete and utter idiot?
These are no "brainiacs". If they were, they wouldn't have been party to this "risk mitigation" scheme in the first place. Any brainiac would've known that this was in fact a brush the risk under the carpet scheme. Problem of course was that the lump of risk was big enough to trip the whole world's economy. And any brainiac would've at the right time, maybe mid or late 2007, skipped out of AIG and traded against AIG's books. These are no brainiacs, these were incompetent fools with inflated egos for whom innovation was not about creating money or empowering people with it but thieving it.
Argument 3. A.I.G. knew it needed to keep its people.
So? They'll leave irrespective of what you offer them. Which you already have. And quite a few have already left. This goes against the grain of market economics. So you'll pay significantly HIGHER for incompetent people to work in a failed firm propped up by tax dollars? Umm.. how really does this work?
AIG fuelled by incompetent and greedy fools, requires tax money to keep it afloat. And then you give the same fools Higher than usual pay to KEEP them? So that this incompetent organisation doesn't get into a depper hole... which it will manage to do by paying the same fools to do the same job? Wow! that blows my mind!
Dear Mr. Sorkin. You seem earnest in your arguments. From 13000 kms across the world, maybe seeing it from here gives me a more objective perspective than one who's in the thick of things. Or maybe I'm just a guy who like black and white or maybe its because I'm from a country where politicians and fatcats are honestly acknowledged to be thieves. Here's my two pence or 10000 shares of AIG - What we're seeing here is a kleptocracy run by thieves who've been discovered because they grabbed too much too fast and are making a last ditch attempt to distribute the loot.And it seems to me that its not just AIG but endemic to all the bailouts that the US Govt. is offering.
All of this of course is assuming what seems to be taken for granted... the world will collapse if not for AIG, and the other bailed out minions. I still haven't seen one good case... hell! ANY case.. for the people who vote in your country to pay for this world-saving gesture even as they battle lay offs and erosion of their property values. Its always been implied and no one, not even Jon Stewart, who I suppose is the only remaining person in your country with a modicum of intelligence has tried to prove it.
All this only serves to demonstrate, quite dramatically, in fact that the current system, constructed and encouraged by Messrs. Reagan and Greenspan and Paulson bowing to the Goddess Rand does not favour merit and rewards incompetents who had parents rich enough to pay for Harvard. Everything that critics had to say about Ayn Rand zealots has come to pass. Does the egg in your face and the peasants with pitchforks at your door force the least bit of remorse on you people?
If I were anyone with authority, I'd take my chance with "government appointed financial people" ,that some NYT reader contemptuously labels them, trying to disentagle this. They may not be Harvard or Wharton but I'm assuming that there's every chance that they're not inbred boston brahmin neanderthals and can tell a loan from a deposit.
Has anyone thought how satisfying it would be to actually hold these people accountable? To make them live in an industrial town and sign up with the UAW and get 200 days of work a year where they actually make a nut or a bolt instead of weaving themselves money from other people's entrepreneurship and work for the simple service of moving money from one place to another?
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