Let them eat cake
Mar 20, 2009
It is doubtful if America has ever been so scandalized and outraged against any corporation in the past. AIG certainly "takes the cake," as we would say.
The most recent comparison would almost have to be Marie Antoinette's supposed statement during the French Revolution, "Let them eat cake." This was in response to being told that the people had no bread to eat. Whether the story was true or not, it cost her her head.
Heads are rolling once again. If this continues, I doubt very much if President Obama--or congress--will have the political capital to give AIG another bailout next month when they come begging once again.
It may be, of course, that Bernanke's purchase of faceless bonds in the marketplace is actually a purchase of toxic mortgage bonds from AIG. I don't know, and they won't say because Bernanke values his own head.
Yet I suspect that this whole debacle will prove to be the downfall of AIG, and with it, the world economy.
Outrage over the bonuses is so severe that it makes AIG's survival problematic. "To the average American and to the average politician, AIG is a big amorphous behemoth that is taking money from the public and giving it to people and companies they should not be giving it to," said Michael Kempner, CEO of the MWW Group, a public relations firm that's not advising AIG, in an interview. "That's the perception."
The anger against AIG is making congress shake in its boots. AIG employees have to hide their badges so no one knows who they work for. The British soccer team, whose jerseys proudly proclaim AIG sponsorship, are hiding in fear. AIG executives are getting death threats.
Who's to blame is no longer important. This issue has gotten a life of its own and is totally out of control--at least for now. If this Frankenstein monster cannot be contained, and if AIG can't remove the GREED out of the "G" in its name, it will go down in flames.
When the dust settles, and the people realize that the financial system of the whole world has just collapsed, their anger will turn to fear, and that breeds revolution. Revolution breeds dictatorships to defend government officials from the wrath of Khan.
It appears to me that we are seeing the first beginnings of a very dangerous period of world history. The only question at this point is whether or not the beast can be tamed first.
Meanwhile, let's do the odd-ball thing and forgive AIG employees. After all, most them are innocent, just as most ENRON employees were a few years ago.