Politics - AIG

The AIG fiasco has been, if nothing else, entertaining. I've read a little, but not much, so I will not pretend to know all the details of the situation. What is clear is that the company and its issues have become a political hot topic. This means that everyone exaggerates the facts and the truth is hard to find. If you wonder about the individuals at AIG who were paid bonuses, I would suggest reading this article by the VP of AIG's financial products unit. I am not so naive to ignore the possibility that this letter was written with the intent of being publicly distributed, which could make it political propaganda and questionable as well. However, if most of what this individual says is true, it does give a completely different perspective than you will hear on Capitol Hill. Speaking in generic terms, I do know that lenders will put covenants into their loan documents and if the borrower does not adhere to them, the loan can be called. However, I don't remember ever seeing one that capped what a company could pay its employees. The government surely knows less about AIG's business than AIG executives. In my opinion, the government has a few choices for corporations such as this. They can let it go into bankruptcy, they can loan it money and get out of the way, or they can nationalize it. Loaning a company money and then putting many restrictions on it without truly knowing the business is somewhere between the second and third options and seems destine to fail. AIG is now losing valuable employees, such as the author in the article above, because they are being vilified by the press and politicians for accepting what was promised to them. Perhaps the bonuses were exorbitant. I could not make an educated comment on that. However, if they were working for a salary of $1 per year with the promise of a bonus at the end, then I cannot possibly see how expecting and accepting at least some sort of bonus is evil. What is evil is that government now realizes that is taking a beating in the media for these bonuses which were allowed by the document they signed, so they are shifting the blame to AIG and now are proposing to change the rules after the fact. The proposed 90% tax on these bonuses is tragic, because it's not playing the game fairly. They signed an agreement and now the public is outraged by what it allowed. So, since they are the United States government, they are going to go and change the rules so they can get the money back. Is that the type of entity you would like to do business with? It's shameful. Admit your mistake and take the responsibility that comes with it. Do not cheat, lie, and steal to cover up for your bad judgment.