Nice Try, No Cigar

According to the New York Times, the head of AIG, in hopes of quelling public anger, is expected to announce a deal in which AIG executives agree to return 50% of their bonus in hopes of averting congressional action to tax it down to nothing:

Edward M. Liddy, the embattled chief of American International Group, is expected to ask employees who received lucrative bonuses to give half the money back.

According to a person briefed on Mr. Liddy’s plans, the A.I.G. chief will announce this plan during his testimony this afternoon before a Congressional committee that is investigating the problems at company.

Nice try, but I'm afraid that train has left the station. If $6 mil was an unreasonable amount to compensate an executive for destroying his company, I don't see how the public is going to be satisfied giving him only $3 mil.

The Obama administration is in a tough spot on this one. My suspicions are that the administration was hoping this issue would just pass under the radar and go unnoticed. The only thing that Rick Santelli had right in his latest rant is that $165 mil is pickles compared to the real money that's being thrown at AIG. But interms of public sentiment, the sum dwarfs everything the government has spent so far. Unlike Santelli the public is willing to spend what it takes to get the economy back on its feet. But the public has no tolerance for rewarding those who brought us to this point. A wooden nickel is more than they deserve in the eyes of the American poeple and I suspect a good chunk of the public sees no real difference between these guys and Bernard Madoff.

If anything good comes of this, perhaps it will be a change in our nation's permissive attitude towards obscene executive compensation. What possibly could one man do for a company that's worth a $6 million dollar yearly compensation package? Is that one guy really $5,950,000 smarter than the average school teacher, or fry cook?

There needs to be a revival of the millionaire tax to discourage these sorts of excesses and help fund a more just society for average working Americans. Maybe this latest chapter in the Wall Street culture of greed and corruption will see to it that we get one.