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Wachovia Dodges AIG's PR Bullet


Failing bank cancels vacay in the Greek isles.

Call it trickle-down economics, socialist style.

American International Group (AIG) took it on the chin from Congress, the White House and Saturday Night Live for spending $440,000 on a retreat at the St. Regis Monarch Beach Resort in Southern California after pocketing $85 million in a taxpayer-backed bailout.

The outrage is misplaced, if you look at it through the eyes of an entrepreneurial bureaucrat.

Here's how it works:

Yeah, yeah, yeah - it's public money. So what? The pooh-bahs at AIG generously used $2,949 of our money to tip the help at the posh resort. Undoubtedly, many of them are students, single moms and unemployed philosophers - deserving folk. So, comrade, do you want to complain about that?

Then there was $1,488 spent at the barbershop - grandly called Salon Vogue, for those of you keeping score at home. Think of it: That's $1,488 those folks wouldn't have if it weren't for the big, sappy heart of We, the Taxpaying People. Sure, the cash is funneled through the grubby mitts of the muckety-mucks at AIG, but they're entitled to their cut, right?

Same for the $1,900 spent at the Monarch Bayclub. You wouldn't want it to dry up and blow away, would you? Any outfit that calls itself "Bayclub" rather than "Bay Club" needs a bailout of some sort.

At first, the $6,939 spent on golf is a little harder to justify - golf being the sport of CEOs who think they're kings and all. But think of the greensmen! They'd be working part-time without AIG's duffers digging divots.

There's a great opportunity here: Make bad business decisions, proclaim yourself "too big to fail," and demand a handout from Uncle Sam.

That's the simple way to get that dream vacation in Bali, Outer Mongolia or, with a little imagination, Uncle Vinnie's in Brooklyn.

However, it's possible to over-think this. Pure stupidity may be all that's required to succeed in a credit-crunched world. Four AIG top dogs traveled to England to go partridge hunting. The cost: A mere $87,000. One aspiring Einstein told a reporter, "The recession will go on until about 2011, but the shooting was great today and we are all relaxing fine."

Alas, a backlash is building.

Wachovia (WB), another bank in the dumper, canceled an all-expenses-paid cruise to the Greek islands for 75 employees of AG Edwards (its brokerage firm) and their sweeties.

Quoth the sage of Wachovia, a.k.a spokesman Jim Griffin, "With the uncertainty in the markets right now, financial advisers have told us that they prefer to remain close to their clients."

Now, that's dedication.

What the world needs now is a publicly funded retreat for financial advisers to learn how to better meet the needs of distressed and distraught clients. In view of current economic conditions, it must be done on the cheap: Vail, Colorado will do in a pinch.

Sooner or later, the Federal Reserve will just have to print more money.

The upside: Uncle Sam could tax the bejabbers out of the guys who run the presses and pass the tax revenue on to some failed but deserving company for a retreat in an exotic place.

That's the new capitalism, Bubba.
No positions in stocks mentioned.
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