The AIG Debacle

And now, more news that really shouldn't surprise us.  AIG, the recipient of the largest amount of our money, taxpayer dollars, to allegedly bail them out of financial demise, is giving $165 million in bonuses to the very same Lords of Wall Street who sold the large insurance company on participating in credit default swaps.  In an amazing display of "deaf" the Chairman of AIG said: "we need to give bonuses to keep good people."  Predictably there is a populist uproar, fueled by the media who is thoroughly enjoying this type of news.  The villain wear pinstripes the good guys wear blue collars, it makes for easy stories.

In my email in box this morning came an inquiry from one of my friends who I consider extremely smart.  And his question, more an editorial than a genuine question, wondered why it is Congress (and I will edit here and add the Administration) is unable to write in conditions on the federal bail out money.  He said, with Congress filled with so many lawyers, you would think they could write contracts with conditions (and to the six folks on the email many lawyer jokes swirled around between us).   

He's right, of course.  But that "failure" to condition the bail out money on how it is used is not negligent.  Follow the money and follow the lobbyists.  You see, we can have all our populist anger we want.  Huff and puff.  And the Members of Congress will now, almost like a well directed play, call for hearings, yell at executives of AIG, demand someone's head.  But really, those same Members of Congress, presidential candidates, and even wanna-bees currently working in the Administration, get lots of money in their campaign coffers from AIG, Citibank, Bank of America.  Even now.  

So, this latest brouhaha, well, it's for show.  It gets us distracted.  It gets us upset.  Meanwhile, bankruptcy cram-down  provisions get watered down (which could really help troubled homeowners, you know, those blue collared folks), the mark-to-market accounting provisions that actually help tell individual investors what banks are solvent are probably going away...in other words, while the populist anger is storming off to the side, the real action to help us, is not happening.  

Score?  Banks and financial institutions - 10  Individuals - 0.

Get angry.  But keep calling and yelling at your Congressman or woman.  Tell them you're watching.  Not the showy hearings or press conferences, but their votes on issues that will actually help you, your friends, your kids, your neighbors.