Common Sense on the AIG Bonus Horizon?

This AIG employee bonus situation has gone hook out of hand. The entire World economy and International Economic Fleet is foundering, in the midst of a perfect storm on the foggy shoals of Financial Collapse. Meanwhile, the Congress, Pirates in Charge, appear totally focused on auditing crew salaries below.

How much longer can we hope that, down in the bilge, the few remaining crew, who have not yet jumped ship with their share of the loot, continue to man the complex and delicate machinery of algorithms and intertwined cross-collateralized agreements essential to bailing out the ship?

It matters not a Parrot on a Pirates Shoulder, that they were, even in the best of times, an overpaid, self obsessed and irresponsible crew, partying away along with the Pirates in Charge, Congress, up on the bridge. What matters is that they are still down there sweating to keep AIG and the rest of our fleet afloat. Congress, of course, having no idea how the pumps actually work see their job as limited to issuing demerits for past behavior. Maybe later, but let's save the fleet first.

This whimsical sea ditty will not be complete until I tell you that, back in the days of fair winds, warm sunsets and bottomless Rum barrels, the crew welded their anchor chains together with all kinds of interlocking agreements, default swaps and cross-collateralization. Nobody quite remembers doing it or why, but the whole fleet is now inextricably bound together. If one goes, they all go.

When several on the bridge commented on this complex binding together project, “Does anybody understand what all this is about? Should we be looking into it? Or maybe supervising it?” they were shouted down, “Shaddup, me hearties. The crew knows what they're about. We've no business mucking about in crew matters. Argh!”.

So, now if more than a few boats founder the entire fleet goes down as well. Down, down, down to Davies locker, the good along side the bad.

While congress searches for anybody but themselves to walk the plank, they might also consider returning the perpetual annual bounty of $4,700 they awarded themselves, just three short months ago for their sterling efforts in steering a course straight onto dangerous shoals. “Yo Ho Ho and Barrel of Pork, me maties.”

Finally there appears some glimmer of hope on the horizon as David M. Herszenhorn reports this morning in the New York Times. “Obama Uneasy About Tax on Bonus”

The White House stopped short on Friday of endorsing legislation to severely tax bonuses paid to executives of companies that accepted taxpayer bailout funds.

Administration officials said instead that President Obama would assess the potential effect of the bill that emerged from Congress on efforts to stabilize the financial system.

The article goes on to say.

The chief executive of Citigroup, Vikram S. Pandit, sent employees a memorandum Friday saying, “The work we have all done to try to stabilize the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees. It would affect countless number of people who will find it difficult, if not impossible, to pay back the bonuses that they earned.”

Meahwhile,

Representative Barney Frank, the Massachusetts Democrat who is chairman of the Financial Services Committee, introduced another bill on Friday to curb bonuses. His measure would bar bonuses not based on merit for as long as a company owed bailout money to the government.

Come on people. The remaining AIG employees oversee a very leaky $2.7 Trillion ship welded by contract to the other ships in the Financial Fleet. Only the technicians who built and understand this very complex machine are going to be able to safely dismantle it. Many of them will be out of work when they finish untangling this mess. Jobs may be tight elsewhere, but not in this sector. These people get job offers daily that actually offer a future. Do we really want to lose these people and replace them with people willing to work for a lot less and the sure prospect of working themselves out of a job? If so, I have a few laid off truck drivers and a welder or two who could sure use the work, but are way too too smart to walk into this mess, especially if Congress is going to second guess every move.

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