As I&T has reported, Internet site Gawker published a post headlined "AIG Corporate Security's Tips for Surviving an Angry Mob," which consisted of what the author described as a leaked memo emanating from AIG Corporate Security. While the memo was interesting and newsworthy at a time when the nation's attention is on the now notorious bonuses, the headline struck me as disturbingly frivolous. Does the Gawker author find humor in the idea that AIG employees face physical harm?Perhaps not, but many have fanned the flames of hysteria against AIG by scapegoating the company, despite the possibility of harm to the company's employees and its fortunes. One such person is Rep. Barney Frank, who attempted to brow-beat AIG CEO Ed Liddy in Washington, despite the fact that Liddy has taken on the enormous burden of managing AIG after the company's crash without asking for any meaningful compensation. Frank's behavior is all the more absurd given that the public now holds an 80 percent share in the company.
Among the most outrageous of Frank's actions was to demand that Liddy supply the names of the AIG executives, accompanied by a threat to subpoena the list if Liddy failed to comply. Liddy proved more than a match for Frank by asserting that making the names public would endanger not only the executives but also their families. Liddy then read several gruesome death threats that the company had received related to the bonuses.
Frank might well seek a scapegoat to divert attention from his own significant role in the financial crisis. Frank was an enthusiastic booster of the grotesquely mismanaged Fannie Mae and Freddie Mac and notoriously said "I want to roll the dice a little bit more in this situation towards subsidized housing," when taken to task on the potential systemic risk the government supported entities posed.
But Frank is not alone in his misdirection. The Obama Administration was aware of the bonuses but chose to go ahead with the AIG bailout anyway. Perhaps they reasoned, as has blogger John at Powerlineblog.com, that there was nothing wrong with the bonuses because they were retention rather than performance bonuses and were being given to people who had nothing to do with the transactions that wrecked the company. Perhaps Treasury Secretary Tim Geithner reasoned that retaining these executives would foster the success of this now largely publicly owned company.
Instead of having the courage to own up to that, Administration officials act outraged, the Chairman of the House Financial Services Committee attempts to publicly humiliate a man who ought to be regarded as a hero rather than a scapegoat, and the President of the United States pretends to be shocked, shocked! that such bonuses would be offered.
Perhaps we ought to be shocked at the misdirection that places public focus on bonuses that amount to a tiny part of the AIG bailout, to say nothing of the proposed $3.1 trillion budget. And what are these bonuses compared to the vast amount of rotten debt that is the product of a housing bubble driven in significant measure by public greed and government pandering?
In a better world, the general public would be more inclined to examine the contribution of its own greed and irrationality in precipitating this crisis. But a large portion of the public is always eager to denounce the rapacity of "Wall Street" and have increasingly begun to look at their political and class enemies as pantomime villains. Little surprise, then, that politicians with much to answer for will readily offer up a scapegoat.
Meanwhile, as the protesters nurse their wrath to keep it warm, blameless employees of a company they did nothing to destroy, have to consider the possibility of being physically harmed.Many have fanned the flames of hysteria against AIG by scapegoating the company, despite the possibility of harm to the company's employees and its fortunes. One such person is Rep. Barney Frank, who attempted to brow-beat Ed Liddy in Washington, despite the fact that Liddy has took on the enormous burden of managing AIG after the company's crash without asking for any meaningful compensation. Frank's behavior is all the more absurd given that the public now holds an 80 percent share in the company.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio