Ending Banker's Holiday: Part Four (It's Satan!)

I was surprised when I looked up the definition of a “bonus” on Princeton’s wordnet: “An additional payment (or other remuneration) to employees as means of increasing output." I always thought a bonus was a reward for increased output. Carl Crawford earns a million dollar bonus if he hits 25 homeruns and knocks in 100 runs this year. The bonus comes after the fact of the increased output. It’s based on performance. But Princeton’s definition seems to suggest you could write a “bonus” into an employee’s contract as a means to inspire them, in the hopes that the bonus will increase their output, or at least keep them employed.

This is what people don't understand about the 165 million dollars in bonuses paid out with tax payer money by the failing insurance giant AIG. As we learn today from CEO Edward Liddy, turns out there are “performance” bonuses and “retention” bonuses, the latter making up the biggest share of the AIG bonus pie, according to Liddy. Only problem w/ this account is that on it heels reports came out that many of the bonuses actually went to employees no longer working for the firm. So, there must be “severance” bonuses, too.

To most people it seems unconscionable that a business on the verge of bankruptcy since last summer, kept alive so far by 170 billion dollars of tax payer money, would be paying its employees anything beyond their basic salaries at all. What sort of output could warrant a bonus when a business is busy bankrupting the world economy!? But those people, the rising bubble of “populist” anger, don't understand. (There is something about these unbelievably unscrupulous circumstances that make the use of this term “populist” terribly condescending, as if to suggest that if public anger were not mere mob sentiment people might understand the legit purpose of these bonsuses to the the world of expert finance.)You give million dollar bonuses to keep people who screwed up your business so that they might fix it? You know, who better than the crook to suss the criminal mind?! So much for the efficiencies of private enterprise.

We have millions of people losing their jobs, losing their homes, and we’re giving economy-busting gamblers bonuses? What’s next, awards to companies whom lay off the most workers? bailouts to banks whom foreclose on the most homes? (Oops, we’re already doing this!) This is another one of those occasions where Obama’s cool hand (word awhile back had it O was beyond satire but his saunter and “be cool” demeanor begs for an SNL skit in times like these) is NOT up to the task. Talking ab a culture of greed and returning balance to the distribution of our economic spoils is fine and dandy on the stump. But this is a time for kicking ass and taking names.

It’s been argued that nationalizing zombie banks deemed too large to fail is un-American but when recipients of government support aren’t pulling in the same direction(obliviously stuffing their pockets, in fact) then bailouts are stupid or all too American. All too in favor of an American oligarchy elite, that is. Such bonuses on the public purse are unacceptable and should not be tolerated, obviously. If AIG would have had to file bankruptcy last fall instead of being bailed out by taxpayers, surely, no one would be getting any “bonuses” before debts were paid. Which means NEVER getting bonuses b/c if they could pay all their debts then they wouldn’t be bankrupt.

But righteous indignation won’t fix the problem, won’t prevent a collapse of this magnitude from happening again. Nor will the Obama Team’s vague generalities, I’m afraid. It’s as if the O Team has been instructed not to utter the words “derivatives” or “credit default swaps” or “hedge funds” in public lest they be asked to commit to rules that would fix the monstrous abuses wrought by these financial products. O talks a good game. But, again, there is a condescending disconnect emerging between his condemnations of greedy gamblers on Wall Street and a strained silence about any specifics that might curtail the public consequences of their conduct. What sense does it make to stimulate new investment b/f establishing new rules for investment? I mean, we want a recovery (more jobs) but not one based on another bubble bound to eventually collapse w/ such devastatng effects, right? Obama preaches patience but patience is no substitute for a concrete regulatory reform plan. And they’ve already announced they won’t even have such a plan ready for the G-20 Global Economic Summit that convenes this Friday in England, much to the chagrin of many of the other attending nations.

So the dithering continues. It’s as if the Obama Team still hoped to paper over this problem on Wall Street, wait on a recovery, and set the stage for the next bubble. Counting on the chicken-littles in the press and public to be proven wrong again. So the upswing in the stock markets last week spurred by more conciliatory utterances from Bernanke and Geigthner (promising to allow more off balance sheet accounting, most significantly) is a step in the right direction. Once an investment and job creation upswing gets going again people (populist sentiment) will forget ab regulatory reform, one would assume this reasoning goes. Meanwhile, Nightline is taping a show in Ballard on the existence of Satan in the excesses of Wall Street. See, when the public dithers in mystifying BS explanations for what's happening it’s mounting mob anger, when our Celebrity Pres dithers it’s cool leadership. But, really, condescending or pandering to the people isn't the leadership we need. I still want to believe but....