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Five Things: The Best and the Brightest


The last thing we need is to unleash AIG's "top talent" on businesses that haven't yet failed.

1. The Best and the Brightest

Word on this heinous bonus situation began filtering out late last week. American International Group (AIG), which has so far managed to suck up more than $170 billion in taxpayer bailout money, announced it would pay nearly $165 million out in "bonuses" to the very same executives who ran the company into the ground. We own about 80% of that company, by the way. You and me. But so what?

AIG says this money was promised to these people last year. And in the Age of Self Evidence any promises made by bankrupt companies are legally binding. Regardless, AIG's government-appointed chairman, Edward Libby, is concerned that all this meddlesome compensation tampering by the people who own most of the company will make it difficult to retain the "best and the brightest."

"We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses - which are now being operated principally on behalf of American taxpayers - if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."
- Edward M. Liddy, government-appointed chairman of AIG, in a letter to Treasury Secretary Timothy Geithner

Which may be true. But still, the last thing we as a society need is for AIG's "best and brightest" to be cut loose and unleashed on other businesses that haven't yet failed. So, enjoy the bailout money, AIG, and keep the change.

2. Right Question. Wrong Inquisitor.

"Is this America -- when you do what your government asks you to do and then retroactively you also have additional conditions?"
Wells Fargo (WFC) Chairman Richard Kovacevich

Ah yes, those evil "retroactive additional conditions." How dare the government impose retroactive additional conditions! Where is the outrage?!

Everyone knows that, in a capitalistic society, only banks, like Wells Fargo, should be able to impose retroactive additional conditions; such as bumping up credit card interest rates on any of their customers whose credit score has decreased, or demanding additional collateral for existing loans, or raising ATM fees, charging more for paying bills with paper checks, increasing the minimum balance threshold on "free checking" accounts.

After all, imposing retroactive additional conditions is actually what it means to be a bank; that's essentially the business model. And just because the government has spent a little more than $1 trillion of taxpayer money in direct investments in banks and on purchases of corporate and agency debt, we shouldn't get the idea we can suddenly adopt the "retroactive additional conditions" business model.

Easy, killer. Only the "best and the brightest" have what it takes to run that show.

Is this America? It's a good question. But if it's being asked by a banker, it's being asked by the wrong person.
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