We have seen a week of faux outrage over the AIG bonuses, bonuses that were specifically protected by an amendment by Senator Dodd. Meanwhile the fool-in-chief rants at the CEO of AIG, Edward Liddy. The fact is that Mr. Liddy took the job at the request of the government and is being paid $1 per year. He was comfortably retired when he was asked to come back to work to aid his country in a time of crisis. What he, and the other AIG executives who agreed to stay on and unwind the financial chaos are getting is a frightening amount of abuse.
A sense of fear hung in the room — the palpable, unsettling kind that flashes across people’s eyes. But there was anger, too. No one would express it publicly, of course. Who wants to hear a wealthy financier complain? And yet, within those walls off Danbury Road lies a deep sense of betrayal — first by their former colleagues, now by their elected leaders.
The handful of souls who championed the firm’s now-infamous credit-default swaps are, by nearly every account, long since departed. Those left behind to clean up the mess, the majority of whom never lost a dime for AIG, now feel they have been sold out by their Congress and their president.
“They’ve chosen to throw us under the bus,” said a Financial Products executive, one of several who spoke on condition of anonymity, fearing reprisals. “They have vilified us.”
Ayn Rand’s novel, Atlas Shrugged, which has seen soaring sales (Amazon.com Sales Rank: #183 in Books ) the past few months, seems to be coming true. In the novel, the people who made private industry work walked away from their jobs and let the government, which was not satisfied with their performance, take over.
“They are replaceable,” Pasciucco acknowledges. “If we were running a long-term business, we could probably replace them over time, not all at the same time.”
But it would be impractical at best, dangerous at worst, to get rid of everyone at Financial Products, according to AIG officials. If everyone leaves, Pasciucco said, “you don’t have people that really, truly understand the book [of business]. We’re still big enough that that matters.”
If they did walk out the door, who would volunteer to work at the Chernobyl of the financial world? And what would become of the mammoth portfolio that remains?
“It would become the biggest naked position on Wall Street,” one longtime Financial Products executive said, “and everybody would exploit it.”
So Barney Frank and Chris Dodd are riding the wave of public indignation about the practices of people who are no longer at AIG.
Numerous employees indicated that they would be willing to return the money, but most wanted nothing more to do with the firm. It was a preview of the possible exodus to come, one that concerns Liddy himself.
“My fear is that the damage is done,” he told a congressional subcommittee. “That they will return [the money], but that they will return it with their resignations.”
There is little doubt within Financial Products that he’s right about that.
“Nobody is going to give it back and then stay,” said one of the firm’s employees. “If they give back the money, then they will walk. And they will walk into the arms of AIG’s counterparties.”
We may have the opportunity to see how Barney Frank and Chris Dodd do running a big financial services operation. Have they ever run anything but their mouths ? I guess we will learn.
Tags: AIG, Barney Frank, Chris Dodd
I tried to explain to someone the nature of the bonuses, and the nature of the trouble within AIG, she didn’t want to hear it. She was running with the MSM meme on it.
You can lead a horse to knowledge but you can’t make him use his brains.
The left wingers are in Madame DeFarge mode and are immune to reason.
Mark Haines seems astonished and baffled by Rep. Sherman’s comments. He acts as though he’s dealing with some ignorant Yahoo who just doesn’t see that when people on Wall Street and people on Main Street disagree, Wall Street is obviously right. That’s why he takes “What do people on Main Street know about running a financial system?” to be such a killer response to Sherman.
A few years ago, it would have been a killer response. Normally, it makes sense to think that people on Wall Street know more about running a financial system than people chosen at random, just as it makes sense to think that a successful director knows more about making movies than I do. When people reach positions of prominence in a given field, it makes sense to think that their opinions about the field they work in are entitled to some deference*. It takes a lot to completely forfeit any right to that deference. But the people in the financial services industries have managed to pull it off.
These people are not rational. Red Guards, I called them. Their response was f**k you. Brilliant repartee.