Pissed off about guys getting big bonuses for tanking AIG, angry about where taxpayer money is going? Yeah, me too, but I have a way to punish the guys who were in charge that's legal and effective.
I spent most of the week preparing my taxes, listening to everyone bitch about AIG executive bonuses and I watched the CEO of AIG being skewered by Congress. At the end, I felt sorry for him because he came into the picture after the fact on behalf of the government, doing what has to be thankless job for a dollar a year. He started out the hearing by saying that he found the bonuses distasteful too but was faced with contractual fait accompli. He is faced with paying bonuses of $160,000,000 when the company has received $170 billion in bailout money.
He also said he contacted company attorneys to review the contracts and was informed because of Connecticut law they might have to pay two to three times the amounts if they did not pay and were sued. However, if Federal law was enacted to void the contracts, then it would trump the state laws. He didn't get into that issue. I can see lawsuits costing far in excess of the bonuses taking the states' rights and retroactive laws issues up to the Supreme Court. Okay, I can understand why he might have backed down from costing the company more money, increased settlements and legal fees through the roof. And, this all took place before he came into the picture so it was probably not his focus.
Then he was grilled about the people who were to get the bonuses, insistence from various members of Congress they be named. He was also pressed to name the people who were in charge of the division that took the company down by their reckless behavior. Both of these instances he refused by saying first, he didn't remember or know their names, and second, there were fears for their safety in light of the death threats they had all been receiving. It seems the American people have finally let go of their apathy and risen to the point of concern - paying attention to the things going on around them.
But I have no sympathy for AIG or our government. There was an obvious solution and no one took it. Let the company go bankrupt. The trustee in bankruptcy would re-negotiate all those contracts, dump the executives who caused the mess and oversee on behalf of the stockholders all the future dealings of the company. But no one is talking about doing that for some reason I don't fathom. And, no one is talking about prosecuting the bums under Sarbanes-Oxley which provides criminal sanctions for executive and financial personnel who are complicit in corporate frauds. Certainly this is a mammoth one. A few years ago Sarbanes Oxley was enacted by Congress after the Enron and Tyco debacle. It provides serious jail time for executive who mislead shareholders and who do not safeguard the assets of the company. To date no one has mentioned this possibility but it would be nice to see these guys in jail…not in white collar jail, but in with the regular population. Yeah, like in a cell with Bubba!
Those at AIG given outsized bonuses are being asked to give the money back. It's my understanding that fifteen of them already have. The President is furious about the taxpayer's money spent in this manner. It is an ethical conundrum for executives to take this kind of money when some of them were responsible for the failure of the company in the first place. I'm sure they know well who they are and having their names made public will seal their fate for the future, although within the industry, everyone knows who they are already and what they've done.
But so what? Who really cares about their future? These arrogant risk takers deserve everything they get to so recklessly take a company of this size to its knees. I keep studying the risks they were taking and it is an almost inexplicable morass. Let's just say you take shit and try to sell it, and it doesn't sell because no one wants to buy shit. Then you put it in a nice blue box and tie it with a white ribbon, and sell it to someone. When they open the box, it will still be shit; it can't transmogrify into something else. We used to joke about this years ago and call people "fecamists" rather than alchemists. Alchemists were supposed to turn shit into gold; a fecamist turns gold into shit. Seems a lot of these guys have been running the American financial system.
I think there are some things that can be done but no one seems to be getting into it.
But I have another solution. I think the names should be made public and we bring back the old fashioned custom of shunning. It's been used by religious organizations when a member wants to leave or converts to another belief. It can be mandated by an organization and can be extremely painful as it is a way to ostracize the one shunned from the community, friends and even in some cases, relatives.
First on my list is Joseph Cassano, you know, the guy who figured out how to sell the shit in that blue box with a white ribbon with his credit default swaps, the fake insurance scams and the other phony deals that were only virtual deals selling virtual shit until they had to pay up...ooops!
I would then go on to Alan Greenspan, too late for Regan and his de-regulation orgy, Geithner might be making it to the list, but not quite yet. I'll have Paulson at the top with his arrogant refusal to have any strings attached to the money Wall Street had their hands out for; top executives at Indymac, Bank of America and Citicorp, and of course, all the other big boys at AIG.
But, if no one wants to go in that direction, shunning is the best alternative I can think of. It would take the nanny, gardener, chauffeur and housekeeper to quit and no one step up to replace them. The doorman to no longer open the door, waiters not to serve them, no tables available in the top restaurants, no reservations at hotels and club memberships quietly cancelled.
Their photos should be on telephone poles around the country and posted all over the Internet so everyone knows what they look like. There is to be no escape. And, I don't really care about their safety, what I propose isn't illegal, let them face up to the hate from people they have severely damaged. We have several generations of executives who have no idea what consequences are. It's time they learned.
Now this takes a conscious effort and would entail anyone who continues to deals with them to also be shunned – at least as long as they work for them or associate with them. This soon gets around and is not worth the problems. The villains are eventually left alone. If a restaurant seats them and serves them, other customers must leave. It takes a little bit of doing but sends the message loud and clear, and after all, those of us totally pissed off far exceed the number of their buddies. If they are shunned when they go out in public, it soon means they are confined to their homes. If they turn the money back, they should then be welcomed back into the community because they are to be rewarded by fellowship for doing the right thing. The guys responsible for the AIG, Wall Street and bank tanking have no reprieve.
Let's face it, religions, cults and civilizations have been doing it for centuries. South Africa used it on Nelson Mandela for many years. It's non-violent and very effective. It can include antagonistic actions, but I don't think that's necessary and don't adviser it. I think the psychological is more damaging. For someone so arrogant they take a company down and still expect to receive millions, to not be able to show off to friends and contemporaries might be the worst punishment yet. It's a sad time for a Master of the Universe when no one wants to be anywhere near him! And there's one more guy we might consider using it on, you know, the one who was in command when the country tanked and allowed his buddies one last windfall before he left office. The buck has to stop somewhere and we all know it's not to be laid at the feet of the current guy in office. All these deals were made before he was even elected.
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