Thanks for your comment and welcome to my blog.

I could certainly understand (and agree with) the frustration of middle class Americans, many of whom are losing their jobs through no fault of their own, especially when they see their taxes going to bail out companies who rewarded their executives in such an excessive manner.

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No doubt these voluntary actions will go a long way towards the assuaging of public anger over the issue and I feel that this was the best possible outcome.

Andrews last blog post..Four rants about AIG’s ‘poor performance’ bonus

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Even though no one in their right mind would have anticipated bonus payouts of this magnitude under the circumstances in which they are paid, it does appear that Congress could have done a little more homework with respect to issues like this.

Granted, they had bigger things on their mind than bonuses, but still, one would think that they should have been aware of the situation nonetheless.

Hi Ana,

It does seem frustrating to see some of these people who get fired wind up with a cozy position somewhere else. When things like this occur, it may well be possible that the individual concerned was simply judged to be the most suitably qualified for the role, but it difficult to avoid the impression of some form of inner circle nonetheless.

With respect to the question of bonuses being repaid, I was pleased to read today that nine of the ten top recipients have now agreed to repay them.

The tendency to accept the need for robust practices with respect to corporate governance in the aftermath of a crisis and then revert back to normal when conditions improve appears to be ingrained within human nature to some extent, and pinning down the root causes behind the kinds of irresponsible behavior that you mention is far from an easy task.

I would not go as far as to say that greed and materialism represent the one and only true cause of this type of behavior. That said, I would certainly not discount the possibility that our basic fundamental attitudes toward wealth and success in terms of a material context may well be a contributing factor.

Andrews last blog post..Four rants about AIG’s ‘poor performance’ bonus

To each of your points…

a) Agreed. Talk of suicide is too over-the-top for me.

b) I agree that poor performers should resign and/or be fired. That’s the ideal. But the higher up one goes in the corporate structure, the harder it seems to actually fire someone. And when someone is fired, they just pop up at some other corporation after receiving a lovely severance. These people all know each other. It’s a fraternity.

c) Yes, these bonuses should be repaid. Bail-out funds should be used for “bailing out” and keeping a company afloat, not spend money on superfluous expenditures. If you get money from insurance to rebuild your ruined home, do you spend some of it on a cruise to the Bahamas? It’s illogical, frivolous, and irresponsible.

d) I agree that Americans need to focus on the bigger picture. The greed on Wall Street and the banking industry is nothing new. America went through this with the S&L crisis and with the burst of the Internet bubble and the Enron debacle yadda yadda. Everyone decries greed for that moment and then rush to enact some legislative changes. Once things improve, however, no one enforces those changes, people revert to their previous obliviousness, and then we get another industry imploding….and then we freak out about how in the world anyone could be so greedy.

We need to look at the financial system that rewards greed, but also our culture. We idolize wealth in this country and it promotes the culture of money at any cost. It’s only when things go badly that we get mad about it…for the moment.

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I agree completely on your first two points, but must disagree on the third. While it is pretty atrocious that these bonuses are paid from a foundering company being bolstered by ill-gotten government cheese, Congress should definitely have done their homework before they gave this money to a company with contractual obligations to these guaranteed payments.

Now, in an effort to make themselves look legitimate, they have enacted a retroactive and targeted attack against recipients of these bonuses, which I think speaks more to the future of this country than does any bank giving out dubious bonuses.

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Although I don’t see how they could do much worse than those who were responsible for the bank’s downfall, but judging on the general history of politicians running businesses, I am not entirely convinced of there ability to AIG in a manner which will deliver an acceptable result over the longer term. The media, wishing to beat up any controversy they can do not particularly help either.

I’m glad to hear that you like the way in which my writing has evolved. As you said in one of your recent entries, blogging styles undergo a natural and healthy form of evolution over time and I have found that I have been a little more comfortable sharing my feelings and more of myself in recent times. This is particularly in some of the discussions on other blogs but also on this blog to some degree.

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