If you thought you were already mad about the whole AIG bonus-gate thingand you were; you were sputtering mad; you were talk-radio mad; hell, you were even sports-talk-radio mad — wait till you get the latest.
According to New York Attorney General Andrew Cuomo, who got the goods and then shouted them from the nearest skyscraper-top, it wasn’t just that 73 AIG executives took home individual bonuses of more than a million bucks. Or that seven got more than $4 million. How about this: 52 people who got bonuses that, according to AIG, were designed to keep people from leaving the company, have — yes — left . . . the . . . company. With $33.6 million of your money.
Who wouldn’t be angry? While that’s not technically highway robbery, that’s only because no highways were involved. These are the people who brought the once-mighty-but- still-mightily-arrogant AIG to its knees, the very ones who executed the deadly derivative deals that cost the company tens of billions of dollars, and they’re the same people who got their bonus checks from you. Oh, and you and you and you, too.
You’re outraged. You couldn’t be angrier if these guys were all named Jay Cutler. (Why, I keep wondering, do so many people blame Cutler when it’s new guy Josh McDaniels who wanted to trade him, who can’t, even now, admit that considering a trade was a horrible rookie mistake, who is apparently so arrogant he believes that, with his 0-0 NFL record, he can win with any quarterback?)
You’re outraged because, finally, a line has been crossed. The guys at AIG either don’t get that or don’t care. Didn’t they learn anything with John Thain’s $35,000 commode?
What we have here is an alternate universe. It’s as if in “Glengarry Glen Ross,” the Alec Baldwin character doesn’t come into the office and explain that the high seller gets a Caddy and the low seller gets fired — but that everyone gets a Caddy. And that, hey, don’t worry, somebody else will pay for it.
In our modern meritocracy, AIG gives taxpayer-subsidized bonuses to employees batting .000. Ordinarily, you get bonuses for hitting 50 homers — OK, 40 without steroids — and not for messing up so badly that the government has to come in with $173 billion to make things right.
AIG said a contract was a contract, as if contracts don’t get renegotiated all the time — as if unions at certain newspapers didn’t vote overwhelmingly to rework their contract and take a major pay cut. Just sayin’.
Angry now? I got more.
Now — now that’s it’s a little late — your Washington representatives are angry, too. They were angry before, but not this angry. Somebody must have finally explained the situation. Who is to blame? Take your pick.
You’ve got the Obama administration, which just gave AIG the additional $30 billion in bailout money. Why didn’t Barack Obama and his Treasury secretary, Tim Geithner, make the new money contingent on finding a way to undo these bonuses?
Now Obama says we’ve come to a core principle that can’t be ignored. Obama doesn’t anger easily, of course, which is a good thing when you have your finger on the nuclear button. But a major public show of self-righteousness — or possibly a call for some Wall Street waterboarding — would have been nice a few days ago.
Of course, Obama is in a tricky position. He has to condemn these guys on one hand — guys who apparently have no shame — and also be sure the rest of us don’t give up on the banks. In the same way, he has to reassure voters that the massive bailout is good, if painful, policy even as the friendly folks at AIG stick a finger in everyone’s eye. We all have the same image of bailed-out bankers in Las Vegas, crowding the craps tables, shouting, “Baby needs a new pair of Ferragamos.”
And then we have the Republicans, who still don’t admit that it was deregulation of the industry that got us here, who still say that lowering taxes for the rich is the way for all of us to prosper (except, it turns out, when we’re bailing out these same guys), who blindly follow those conservative economists who insist that naked self-interest is good for everyone’s interests. I love the guys who say we should let these failing companies founder, as if, you know, a depression will teach them a lesson.
Chuck Grassley gets the early prize for most outraged politician — and also most outrageous. As you’ve heard, he said that the only honorable thing is for these guys to either resign or kill themselves. That’s how mad he was. Actually, he might not be just mad but completely bonkers. On Tuesday, Grassley explained that he wasn’t really pro-seppuku but then went after AIG and like corporations, saying — you need to look up the exact quote yourself — they are using the taxpayer as a wet nurse.
And yet, he does have a point. As my daughter the law professor explained to me, if AIG had gone into bankruptcy, these bonuses would never have been paid, or, at most, paid with pennies on the dollar. AIG didn’t go bankrupt, of course, but only because it got $173 billion from the government to keep it afloat.
In Washington, they seem to be finally catching on. Geithner says Treasury will withhold $165 million from the next $30 billion bailout payment. Of course, that means AIG still gets $29.835 billion. Democrats are talking about a bill that would tax AIG bonuses at 91 percent. This kind of narrow, retroactive tax sounds like terrible policy in general, with all manner of bad implications — although from what I read, it might actually be constitutional.
And maybe then we can get back to the important stuff — like maybe a Josh McDaniels Can’t Trade Top Young QB Act.
Mike Littwin writes Sundays, Wednesdays and Fridays. Reach him at 303-954-5428 or mlittwin@denverpost.com.
