Today's Bit of Demagoguery

The "return AIG's bonus money to the taxpayers!" and "hurting Americans need this money more than AIG execs!" is a fail in so many ways. One -- the top guys at AIG (the rich guys, the ones that are deemed most responsible) have already rejected bonus money. Two -- it's really disingenuous to portray this as a scenario in which all AIG employees (remember folks, it's a monolith, all AIG workers played a role in ruining the economy!) are getting $400k salaries and then another $400k in bonus compensation. This isn't how most finance jobs work; rather, finance employees regularly take super low salaries in exchange for very high relative bonuses. "Bonus money" in the AIG/Wall Street world is not "bonus money" in the general world. Let's say an AIG employee negotiaties a $100k salary and then an expected $100k bonus. AIG goes down the shitter, so instead he only receives a $20k bonus. In reality, the employee is losing money and getting massively shortchanged. To the general public, that's taxpayer money going to pay bonuses to "millionaire executives."

Three -- it's not like if AIG doesn't pay out bonuses, we can suddenly eradicate homelessness in America. It's not less money in our coffers. It's less debt to China. The idea that "in such tough times, the taxpayers shouldn't be on the hook" is such a strawman. Today's taxpayer money isn't paying for this. If we ended our presence in Iraq tomorrow, we wouldn't be able to "fund universal health care with the money we saved."

Four -- in the end, where did people think the "bailout money" was going to go? To pay workers! You can argue that the workers are overpaid, and that the bailout money should be allocated in a more-efficient-than-normal fashion. But people need to come to grips with the fact that regardless of whether current talent is retained or new employees are hired, the company cannot function unless it can pay its workers. And the hubbub about "oh why do we want to pay these guys who fucked up the economy" is such lame populist tripe. For one, it presumes that "Wall Street" is a cliquish monolith that organized against "normal Americans" in the name of greed. In reality, it's composed of a few really rich and fairly corrupt individuals, and lots and lots and lots of normal, bridge-and-tunnel men and women who live decent lives in suburban American. Whoever gets hired to work on the reorganization of AIG, it's going to be people who were likely "involved," at least tangentially, to the crisis. And they're not going to work for free.

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As I was eating lunch today, I saw Rick Sanchez on CNN interviewing some random moronic college kids in Florida about this whole shebang. One kid said something like "I'm for giving the banks enough rope to hang themselves, and for keeping American taxpayers off the hook!" I wanted to shoot the TV.