The most compelling thing about the howls of public and political execration aimed at the big bonuses given the bailed-out boneheads at AIG is not so much the understandable outrage at rewarding failure with gifts of tax dollars, but the fact the American people haven’t been able to work up such anger over far more outrageous things – state-sanctioned torture, for instance, or a war in Iraq that’s gone on longer than World War II.
Granted, the AIG bonus boondoggle is an easy target. Even a simpleton can see through the argument that retention bonuses were necessary to keep AIG’s “best and brightest talent” on the job trying to unravel the mess they’d made. AIG doesn’t have any best and brightest to retain.
If you step back from the mob for a moment, however, it might occur to you that all AIG Financial Products did was insure investors against defaults on bonds backed by subprime mortgages. It didn’t write the bad mortgages. It didn’t bundle them into collateralized debt obligations. It didn’t deregulate the financial services industry, allowing such risky business behavior. It just didn’t foresee that financial rocks like Lehman Brothers and Bear Stearns could crumble overnight like stale crackers.
Still, Sen. Chuck Grassley, R-Iowa, brought the national ire against AIG to a fever pitch last week when, in what he quickly repudiated as “rhetoric,” he suggested that the disgraced AIG bonus babies take a page from the Japanese playbook and commit suicide. Fall on their swords to save face for AIG and the good old USA.
The problem, however, is that America has lost any sense of shame. To feel shame, you must first possess dignity. If Grassley’s former colleague, Sen. Larry Craig, R-Idaho, felt no shame at getting caught in “a wide stance” with his pants down in a public restroom, if Bill Clinton wasn’t disgraced by getting a Lewinsky in the Oval Office, there is simply no way to disgrace a sitting U.S. senator or president. And this pathological lack of dignity and shame permeates modern American culture.
So maybe it’s a good thing that numb America has finally managed to work up some righteous indignation. It’s just too bad that the collective howl is aimed at the wrong people.
At this very moment, all over the commuter suburbs of Connecticut, AIG executives are living in fear for their safety and that of their families, not because they committed a crime, but because their company insured an investment bank that went belly up, because their company’s contract called for them to get bonuses they probably didn’t deserve, because Chuck Grassley thinks they should kill themselves (rhetorically, of course).
Should the AIG execs be ashamed of themselves for accepting bonuses? Maybe. But if there were an American concept of saving face, an ethic to guide the disgraced, Sen. Grassley might better have suggested his rhetorical final solution to some of his colleagues. It was Sen. Christopher Dodd, D-Conn, after all, who took $281,000 in campaign contributions from AIG and then wrote their bonuses into the bailout bill. It was Sen. Phil Gramm, R-Texas, who spearheaded the disastrous deregulation of the financial services industry that led to the subprime meltdown and the subsequent collapse of the U.S. economy. It wasn’t AIG, after all, that we elected to keep the country from collapsing into economic chaos, it was Congress and the Bush administration.
Shame on them.