A Chance for Real Leadership

The culture of Wall Street will never learn. The New York Times reported today that AIG executives are to be paid bonuses totaling $165 million dollars after receiving $170 billion dollars in bailout money from the government. This is another clear example of the divergence between morality and law.

The arguments being made in favor of the payments are ludicrous. The lawyers for the firm said the firm had no choice but to make the payments. The government owns 80% of the firm. They should simply say no bonuses and the people they were promised to have no right to sue for them. End of story.

The second argument is an old one and a discredited one. The firm said that the bonuses have to be paid in order to retain the most skilled executives. The lion’s share of the bonuses is being paid out to the people in the financial products division, the same division that brought the firm and thousands of people to their knees. Where is the skill in that? How can they even call these people skilled? Is there no performance measurement parameter tied to these bonuses? Some of these people, and not just AIG executives, should be in jail instead of worrying whether their bonuses are going to be paid. They created financial products without properly calculating the risks and then the executives of the firm blamed the regulatory structure for the disaster they created. The article states that the financial products division is being wound down. A firm doesn’t do that unless they know there’s no hope. So the executives are being paid bonuses to preside over a financial funeral.

What is missing and unexamined in the midst of this ridiculous dust storm is the issue of patriotism, of national unity. This is a crisis situation. President Obama’s inaugural address called for a new sense of shared purpose, a new era of personal responsibility. There was the example of the banker in Florida who paid bonuses to employees who didn’t even work for him after he sold the firm and reaped a huge profit. That man should be Time Magazine’s man of the year, even though the title has been rendered meaningless. Where is the sense of personal responsibility in these AIG workers? How they can accept this money with a clear conscience? I know I couldn’t. These people, if they had any character, would issue a joint statement saying that we acknowledge our mistake, that we know we created a financial debacle and we will accept no bonus compensation until the firm is back on firm financial footing and it is certain that no further government bailout money is needed. That would instantly win them the respect of the American people and send a clear signal that Wall St. is serious about changing its culture. It would also show a much needed willingness to work in the national interest, instead of their own obviously misguided self interest.

This is the kind of spirit we need in this country today. Day after day we hear stories of despair, incompetence and unbridled greed. This country used to have the ability to pull together. It doesn’t seem to be there anymore. We have lost faith in our government and each other. As I have said before, it’s a sign of lack of self respect.

If President Obama were to act with a firm hand and forbid the payment of any bonuses to employees of firms who have received government bailout money, his popularity would soar and people would see that it is possible for justice to be done. That’s the kind of leadership I expect from a man who has been proclaimed a visionary.