Seeing Red

When I was a child, the world seemed a simple place. Right was incontrovertible, the ends never justified the means, and good always triumphed over evil. As I’ve grown older, however, time has taught me that right can be relative, the ends occasionally do justify the means, and evil is more formidable than I ever imagined.

This knowledge, while it’s given me a modicum of wisdom, hasn’t always made me happy. There have been times when the knowledge has made me flat-out mad. These days, there seems to be a lot of mad people out there. In fact, it only takes three little letters to cause me to see red: AIG

American International Group (AIG) has- in my opinion- become a catalyst of sorts, a symbol toward which the common man can focus our considerable frustration for everything that’s wrong right now. I think the reasons so many of us are upset about AIG come down to our basic concepts of fairness, morality, and justice. AIG violates them.

The first concept is that of a meritocracy. Growing up, I was told that America was a country where one’s achievements and talents would directly influence their advancement in life. In a meritocratic society, only the best and the brightest would ascend to positions of leadership because only the best and brightest would be elected or hired. In business, only the best and most profitable companies would continue to survive and thrive. There was a large element of personal responsibility attached to meritocratic principles. If you were a worker bee or a drone, it was because you didn’t apply yourself enough in school or on the job. If your company failed, it was because your product, sales force, or management group wasn’t good enough to capture the market share essential in ensuring its longevity. The ultimate responsibility for success or failure rested with the individual or company. And that was comforting.

Not so with AIG. AIG reminds us that life, like high school, is a popularity contest. We’re told that certain banks are ‘too big to fail’ and that losing them would throw the country into a deep, dark depression. They are the jocks you knew from school that sat at the back of the classroom and refused to study, refused to participate and continually fail tests. But they’ve never been benched, always pass class with a D and continue to play week in and week out. The meritocracy concept doesn’t apply to them because the rules bend for them.

And then there’s this retention bonus stuff. I know the bonuses account for less than 1% of the $170 billion recently given to the company (not that I know how the other 99% is being spent) and I know the company had contracts with these employees, but there’s something questionable about giving performance bonuses to employees within a company that missed the mark in so many areas. Even when there were employees, units, and divisions that did great jobs. Sorry, Mr. DeSantis. While I acknowledge your hard work and understand the points you make in your now famous resignation letter, I still don’t believe you’re entitled to receive a taxpayer-financed bonus, contract notwithstanding. That’s not fair.

Finally, there’s the concept of capitalism itself. I learned about supply and demand, the difference between a bull and bear market, and the point of the stock market in my 10^th grade Economics, Business, and Free Enterprise course. I loved that class. It’s easy to understand why some folks make a religion of the market: it is a kind of mysterious force guiding the fortunes of the masses. Fortune and favor, tragedy and devastation are meted out almost arbitrarily, though there is always a reason for its actions, even when those reasons cannot be totally understood.

The market was supposed to able to correct and take care of itself. But where AIG is concerned, even that concept is suspended out of fear. Franklin Delano Roosevelt told us that there is nothing to fear but fear itself. But if the past 8 years have taught us anything, fear can be an extremely big motivator.

Only time will tell.