Letters to the Editor
Readers write about what happened with AIG and what can be done about it.
What went wrong with AIG and what to do about it
Regarding the March 18 editorial, "Moral outrage in the AIG age": This editorial concludes that the system is broken and must be repaired by examining the outcomes of actions related to the handling of the AIG case.
What's overlooked by the Monitor is that the system was fine until the government decided to interfere. There is not much to fix, except for possibly some antitrust issues to keep these banks from getting "too large to fail."
Had the government not interfered, AIG would have declared bankruptcy, the bonus contracts would have been voided, and smaller, more nimble (and smart) banks would have stepped in.
Yes, there would have been great pain in the aftermath of such a collapse. But today we would be talking about who in the federal government allowed this kind of behavior to go on unchecked. Instead, the politicians need to cover themselves for having interfered in the honest actions of an unfettered marketplace.
It's too bad, because within a year or so, AIG will be declared a disaster and it will be closed, anyway. But not until extraordinary sums of money have been wasted.
I think that this editorial piece was off the mark. We – average Americans – are not just angry for the sake of being angry and merely looking for someone – anyone – to blame. We know who to blame: the leadership of the corporations, the government agencies involved in their oversight, Congress, and the executive branch. We are beyond excuses at this point; we need action.
The Monitorsuggests we peel the onion to its core to better comprehend the layers of responsibility and morality in the AIG scandal. When I try that mental exercise I come to the conclusion that bonuses of that magnitude are obscene, even if they are linked to effective performance.
To me, it is wrong for a few to be paid so disproportionately. The imbalance that concerns me is not just within the structure of that company, but also between those few well-paid managers and the rest of the world.
How do bonuses of that magnitude, even under the best of circumstances, come to be? We're told it's so companies like AIG can retain "the best and brightest," but that argument is not persuasive when the performance of these people is neither best in class nor very bright.
Going further, isn't there intense competition to fill these slots? Aren't the finalists who don't get hired also exceptional?
I just don't buy the "retention" argument. I think what we have here is simply greed, and that is immoral and, in this case, particularly obscene.
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