DON'T GET WHY THEY DON'T GET IT
March 16, 2009
AIG, the giant insurance company whose slipshod Financial Services sector is largely responsible for getting the world’s financial crisis rolling, has announced that it will dole out somewhere in the ballpark of $730 million in “retention pay” and “performance bonuses” to executives and “valuable” employees. Now I know nothing is easier than doing someone else’s job, especially if you’ve never done it before, so I can’t offer anything more than a layman’s perspective on why this is necessary, but according to my understanding it is to retain employees who have so much specialized expertise that only they can repair the damage that they caused.
Supposedly they understand the workings of incredibly obscure financial transactions with a complexity (and substance) somewhere between Voodoo rites and the secret ceremonies of the Mystic Knights of the Sea. The question arises: if only they understand how to fix it, how come they didn’t understand enough about it to know that they were breaking it. That, and why are they being rewarded to fix something they broke?
Edward M. Liddy, who was appointed by the Bush Administration as AIG’s CEO after the first bailout package, said, “Our competitors understand how valuable our top executives are, and we are acutely aware that they would like to siphon off our most talented leaders,” according to a story in the Washington Post. This does not say much for the standards of AIG’s competitors, but I think that I do have a personal grasp of how valuable those top executives are, and I have several positions in mind that they could assume—work at, that is—if they would only come to Trout Creek.
If indeed these bumbling idiots are what pass for valuable employees in the insurance business I am want to know what firms would want to “siphon them off” so I can avoid buying any stock in them. I already have enough stock in the insurance sector whether I want it or not, thank you, because 80% of AIG is now owned by the American taxpayer.
AIG’s insensitivity to public perception and their own accountability in this financial debacle is a shining example of corporate irresponsibility in its daily dealings with the American citizen. Having a corporate charter does not exempt them from responsibility to the community because corporations exist by the very grace of government, which means you and me. They have to be licensed to do business in a state or nation, and hypothetically can be denied that privilege—in fact some states call “corporate income taxes” privilege taxes.
In addition, they have most of the same Constitutional rights as you and I. They have what is called “corporate personhood” which dates back to an 1885 Supreme Court decision in a California property tax dispute by the Southern Pacific Railroad. That personhood has given them great power since that time, far greater than they otherwise might have had. They can do everything a human being can do except vote or die. As “persons,” they have a Constitutional right to freedom of speech which has been held by the Supreme Court to include the right of spending vast amounts of money on political campaigns. That gives them as close a thing to voting as it gets.
Thomas Jefferson was of the opinion that a government which is closest to the people is best. I believe that those businesses that are closest to the people are best, because they understand that they are a part of their community. That’s why I can be a big fan of the capitalist system on Main Street without embracing the unregulated free ride of giant corporations. A fan of what Main Street businesses the big corporations haven’t driven out of business, at any rate.
We are taught as children that we are responsible for our actions; that with privileges come responsibilities toward our neighbors and our nation. Some of us forget that from time to time, but then we don’t have to be licensed to exist.
Montana Viewpoint© is carried by 20 Montana weekly newspapers, including those in Helena and Billings, with a combined circulation of over 60,000.
Jim Elliott is a former state senator from Trout Creek. He served in the Montana House 1989 to 1996 and the Montana Senate from 2001 to 2008. Elliott has distributed his opinion column statewide since 1992. There is no charge for publication.