Tuesday, March 17, 2009

To be perfectly clear:

Time: Before then President Bush decided to begin the bailout fiasco

Setting: Mid-level manager's office; AIG insurance company

Players: Bob, the mid-level manager; Steve, his boss (on telephone)

Steve: Bob, I've got some difficult news to share with you. Just let me speak and listen to what I have to say with an open mind, ok?

Bob: OK. Go on.

Steve: As you know we're reorganizing. We will be consolidating your office, and your job in with New York, and as a result, a year from now, we will have to let you go.

Bob: I see.

Steve: We do value your work here, and we would very much appreciate it if you would help with the transition. We realize that training your replacement is difficult, and that you naturally would like to begin looking for another job as soon as possible. However, we feel that looking for another job will take away from your desire and ability to perform this one well. So, what we'd like to do is offer you a bonus equal to one year's salary. We are doing this for two reasons. First, the job search process is difficult and time consuming, and this bonus will tide you over until you find your next job. Second, we really need your full efforts focused here, to make sure the transition goes smoothly. So, if you will sign an agreement not to look for work for the next twelve months, we will, at the end of that twelve months, pay you one year's salary, and you can begin the job search process, and you can guarantee we'll give you a stellar review. You don't have to answer now, but the sooner you get back to me the easier the both of us can rest.

Bob: I'll think about it Steve. Good bye.

Bob goes home, and discusses this with his wife. Bob is an excellent executive, and could get another job. Odds are Bob would be well employed within a couple of weeks, and could leave AIG with or without a recommendation. But he feels some loyalty to the company, and to Steve, so the family decides to do this. A little worried about having to move, and the value of their home, Bob decides to tell Steve that he will do it if Steve can make the severance package 18 month's pay. Steve reluctantly agrees, both because he believes Bob about his house, and because many people are refusing the offer which will lead to human capital shortages during transition. Everyone wins. Once all the Bobs company wide accept or reject the offer and negotiate their terms, the final deal is reported in the media and recorded on the company balance sheets.

Flash to today. It's time to give Bob his bonus. The bonus that Bob negotiated for. The bonus that Bob gave up looking for a job in a great economy for. Now the economy is crappy, and Bob has to find a job. But AIG has taken money from the government. Somehow, that makes Bob's money Congress's money. And if Bob does not give the money back, then we will tax Bob at the highest rate we can get to stand up in court. And we will vilify Bob as someone that steals from the American taxpayer.

It's your government folks. First they came for the Corporate executives. Then their jets, and their bathrooms. Now their bonuses, and soon, with progressive taxation rates on the cusp of rising, the lion's shares of their salaries. They come for conservatives who speak the truth, and liberals who don't tow the line. They search the tax records of private citizens. They attack any politician that has an ounce of backbone. Never have the words of Martin Niemoeller been more true:

When the Nazis came for the communists,I remained silent;I was not a communist.
When they locked up the
social democrats,I remained silent;I was not a social democrat.
When they came for the
trade unionists,I did not speak out;I was not a trade unionist.
When they came for the
Jews,I remained silent;I was not a Jew.
When they came for me,there was no one left to speak out.

3 comments:

Andrew Templin said...

Sorry, Tom, but you are completely overreacting.

This isn't Nazi germany, and these execs are not Jews being sent to extermination camps. I call Godwin's law on this one.

AIG is a failed company that has asked for taxpayer assistance. In reality, they should have gone bankrupt and *none* of these bonuses would be paid. Zero.

Instead, we - the taxpayers - funded them. And - surprise - we don't appreciate paying people who drove a business into the ground large bonuses.

Note that this isn't being discussed for businesses that have not applied for government bailouts.

If you are a failed business and you ask for government help then that is the cost. If, as a business, that isn't acceptable then I suppose there is always Chapter 7.

Profasaurus Indeterminus said...

Godwin's Law. Interesting. I was unaware that some forms of hyperbole had laws and consequences associated with them. AIG should have gone bankrupt, I totally agree. In that case I would not have complained about the company not meeting its obligations. That's what bankruptcy is for. I also would not have complained if the government, as a stipulation of the bailout, had made the company nullify the contracts, just not post-hoc. They did not, however. They even passed a law to specifically exempt executive contracts made before the bailout, after all this was public, but before they gave AIG money. In other words, this is a manufactured distraction. We just have to look around to answer the question 'from what?'.

p.s. Thanks for noticing me. Hope all is well in Granola Land.

Andrew Templin said...

I'll grant that you have a point about the post-hoc - and populist - nature of this.

"Soak the rich" is just as corrupt a policy as "screw the poor". Sadly, we can't solve these issues by posting on the Internet - it just makes us feel better. :)

Full disclosure: Hey, I get bonuses, too - well, I hope I do this quarter, anyway. I would be a hypocrite for engaging in class warfare on this issue. Where I grew up, *I* would be the rich guy. :/