Genuine Lyin'
Socialist Weasel

Bryan Zepp Jamieson

AIG on Our Faces: The real reasons behind the sudden “bonus” rage

by Bryan Zepp Jamieson, 19 March 2009

During the French Revolution, little old ladies sat, doing their knitting and chit-chatting, and watching with mild amusement as the guillotine chopped off the heads of hundreds found by the Revolutionary Committee to be at odds with the needs of the people.

America isn't there yet, but it isn't so outlandish a notion as it was a year ago. There's a lot of anger, and it's building.

As long as the social anger doesn't have a nexus, a focal point on which it can concentrate its rage, it's unlikely to result in much of anything expect loud voices and a few fights in bars, and a lot of sullen expressions out on the streets.

In France, Marie Antoinette said “Let them eat cake” and an act of kindness was translated, in the public mind, to a callous elitist sneer.

In 21^st century America, the spark may have been bonuses paid by AIG to its top executive and management personnel. The public firestorm blew up suddenly, and in 72 hours reached the point where even Republican senators (well, one, at least, Grassley) were calling for the AIG execs to commit seppuku (“hari-kari”) as an act of contrition.

There have been some extremely ineffectual remedies proposed since the blowup began on Sunday. Geithner suggested just subtracting the amount of money ($165 million) from the money allocated to AIG. The head of AIG proposed to halve the size of all bonuses above $100,000.

For all the fact that, according to Nate Silver at FiveThirtyEight, the uproar began on liberal blogs, the Democrats managed to really look stupid for the entire event. Bad enough that they sat on their hands for the first two days, but Christopher Dodd, after hotly denying media reports that he stripped out language in the stimulus bill that would have sharply curtailed and taxed bonuses, admitted that he had signed off on letting the joint House and Senate bill conciliation group eliminate the language, put in by Oregon's Ron Wyden.

Aside from being stupid enough to lie about it, Dodd actually had a sensible rationale. The constitution explicitly forbids passing what are called ex post facto laws, and, with the exception of the courts, the government cannot upend contracts that existed. And, as he noted, the bonuses amounted to less than one tenth of one percent of the moneys paid out so far to AIG.

He may have also known that contrary to widespread reports, these weren't “merit” bonuses, but something even stranger: retention bonuses. At first glance, paying a employee as an incentive to stay on might not seem so strange, but it strikes me that a company that loses $125 billion, stands to lose another $440 billion, and managed to put the entire American economy at risk might want to consider how it defines a good employee who is worth hanging on to.

Even stranger is the fact that at least a third of the employees who were to get these “retention bonuses” had, oddly enough, already left the company.

Nice work if you can get it. Next time I quit a job, I hope someone pays me a million bucks to not quit after I've quit.

But none of this is going to allay public fury. And the fact that most of the beltway doesn't realize that shows the dangerous levels the disconnect between Washington and the rest of the country have reached.

This isn't a gap in viewpoints – it's a chasm. And, given the mounting fear and sense that they've lost control that the American people have, it's a very dangerous situation.

In Washington, and in the beltway media, they have absolutely no clue what the problem is. They think they can ameliorate matters by offering to remove “in-kind” funding, or by cutting the bonuses in half, or by taxing and capping the bonuses.

People are outraged that the bonuses even EXIST, under the circumstances.

Americans have always striven for self-sufficiency, and have been raised to believe that you worked hard and earned your way through life. For years, the corporate right have seized on this theme, and claimed that the wealth they accumulated was done through hard work, perseverance, a superior product, and the infallible wisdom of the market. There was probably a time when they believed this themselves.

By that credo, failure was never to be rewarded, and it was used very effectively to punish the “losers” in society – the poor and the working poor, the people who couldn't get a good education or didn't have the abilities and skills needed for anything other than menial work. The corporate media would sneer that top execs earned their pay, while the poor dumb schlub who was cleaning out the toilets or flipping the hamburgers should count himself lucky that he got any pay at all for the “worthless” work that he did. Americans even became accustomed to having their time and work regarded as nothing more than overhead, something to be cut as much as possible in order to improve productivity.

After 30 years of this, all they have to show for it is a reduction in real pay, longer hours, and open contempt from employers. Companies like AIG spend millions lobbying for private health care and to “liberalize” laws involving bank investments and pension funds, and pushed hard to prevent debt forgiveness on bad debts or interest caps on mortgages and credit card balances. Now, thanks to companies like AIG, people find that their savings, their pensions, and their health care are being swallowed up in a voracious storm of corporate gambling, in which their lives, and much of what they earned in those lives, is vanishing, pissed away by people who are getting paid vast amounts to not even stick around to try to make things right.

That the Republicans don't get this is no surprise. They've been utter whores for the corporations for years. That the Democrats, including Obama, can't figure this out either is frightening. Nobody had any illusions that the system hadn't corrupted Dems too –after all, the entire electoral system rests on politicians hustling their asses for “donations” (read: legalized bribes) and we were all supposed to believe there wasn't any quid pro quo going on.

I don't think AIG is a “French Revolution” type spark, but it's frightening to contemplate just how close to that moment we are. The fury will quiet down, but it won't go away. You'll still hear it in the bars and barber shops and at the water coolers. That fury is just biding its time.

If if Christopher Dodd is at a loss to understand why his actions sparked so much fury, he should read his French history. As I noted above, Marie Antoinette was actually performing an act of charity and generosity.

Most of the corporate whores in Washington have so lost contact with their own basic humanity that they can't even rise to the level of Marie Antoinette.

And that is a blindness that could cost them – and us – dearly.

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Zepp was born in Ottawa, Ontario, and spent his formative years living in various parts of Canada from Halifax to Victoria, and then the UK, South Africa, and Australia before moving to the United States, where he has lived for 40 years. Aside from writing, his interests include hiking, raising dogs and cats, and making computers jump through hoops. His wife of 25 years edits his copy, and bravely attempts to make him sound coherent. Zepp lives on Mount Shasta.