Public outcry over Wall Street bonuses and antics has hit what seems to be an all-time high. Looking backwards, there seems to be other times in our country where Wall St. was demonized, but probably not like this. JP Morgan and his ilk soon after the turn of last century might be an example, sans mass media.
Lots of differences between now and then of course. For one, we called it like it was. Capitalists vs. Socialists. The workers unions protesting and using dynamite to blow the pants off their opponents (and yes, much of it under the actual name and
party of socialism). People close to it all were sounding off as if it was the end of our country. Now imagine if today's media had been around to egg the whole thing on during sweeps. Public sentiment would have likely swung in the "peoples" direction. Damn those money makers. How dare they. Fortunately for our continued existence, the opposite pretty much happened. Thank you early 20th century newspapers and the greater fear that anarchists represented.
Obviously today's situation is a bit different. Our government created laws to reward undue risk, bankers took that risk and the system ended up suffering from the risk. Government, followed by our citizens, blamed the bankers for taking on that risk the government was rewarding them for taking. Government then told its citizens that they needed to use their tax money to bail out these organizations to prevent chaos (to and including the insurance companies who held their policies, i.e. AIG).
Any misstep or bad contract or really any action of business what-so-ever is now under the watchful eye of the taxpayers. And it should be. It's our money, right? I mean the idea of public funds being paid out in the form of giant bonuses really does tick me off. It ticks all of us off.
Here's where things get sticky though.
Read this letter in the NY Times. It's an AIG employee's letter of resignation. This employee worked under a different division than the one that caused all the trouble and had little to nothing to do with the downfall of the company. He was asked to work for an annual salary of $1 a year, and promised that come March he would be rewarded. Due to the public outcry, he's now donating his reward and leaving the company. His hard work being done this past year for $1.
The easy answer is to say so what. He shouldn't be getting paid that much anyway. Of course, that's a bit silly when you factor in his opportunity costs incurred while working for $1. He surely could have gotten paid more than that somewhere else, possibly even a salary close to what he was previously making at AIG. But there's an anger involved. Resentment towards those making money working for a company that now threatens our future, regardless of whether or not that person was involved in the aspects that brought down the company.
Whether we like it or not, we are now all de-facto shareholders. Read that resignation letter and decide for yourself whether or not our public outcry is leading the company towards a stronger future.
I write about this because I think it's a small example of where this country's populism might brings us. Waves of emotion strike the country and our elected officials react to the polling numbers. A company like AIG sinks further and further into government control, star employees leave, and we're all left holding the shares for a company with absolutely no key talent and no ability to focus on long term directives. The polls, and our elected officials, won't allow for any of it. They simply can't allow it because it's not to their immediate benefit. Both parties fight to be the one who saves the day, who works in the interest of the majority. Even when that interest is seated in anger, frustration, worry and resentment instead of the interest of the company (which we own).
What's your take? Are you fine with the bonsues? Should they be returned or taxed heavily? Should AIG be left alone to turn itself around? I'd be lying if I said I couldn't argue both sides. This is all such a damn mess.
