David Gewirtz | BIO
Editor-in-Chief, ZATZ Publishing
It's time for the White House to "man up" and put AIG out of our misery. Over the past six months, the U.S. government has given or loaned AIG more than $173 billion taxpayer dollars as compensation for an incredible inability to run a company properly.
And now, due to "contractual obligations", AIG wants to give its oh-so-talented management staff more than $165 million in bonuses. This is after taking billions from the U.S. government and spending it on lavish retreats at California spas and English hunting lodges. Oh, and they also gave more than $30 billion (yes, with a "b") of our money to foreign banks.
In the words of Nancy Reagan, it's time to "Just say no".
AIG is the nation's largest insurance company. Fundamentally, the business model for an insurance company is to bet against its customers. For AIG to win, many of its customers have to lose.
However, our problem with AIG is not the insurance business model. We rely on insurance companies to spread - not the wealth - but the risk, among us all.
For example, we all know the insurance-based healthcare system in this country is pretty sick. Think about it - for the insurance model to work, a healthy policy owner is paying money and receiving nothing in return, except for the feeling that he or she is protected. A sick policy holder is costing the insurance company money, so it's in the company's natural best interest to avoid paying for as long as possible, and pay as little as possible.
This is a tough game even for well-run insurance companies, especially as the actual costs of health care go up along with life expectancies.
Of course, AIG insures a lot more than just health. They sell all kinds of insurance and have holdings in virtually every business sector. They got in trouble with mortgages, like so many others in the finance sector.
The problem is that AIG has not distinguished itself as a company trying to turn itself around. It's given off no signals of humility or even an indication of a desire to learn from its mistakes.
Instead, it's showing the most venal side of corporate greed. Management is doing nothing to allay the impression that we're giving billions to a company whose sole trade skill is withholding payment. Not exactly a great investment for Uncle Sam.
The management team at AIG is riding this windfall for all it's worth, and it's worth plenty. They claim that they've got performance contracts that require these managers to be paid millions. Their secondary, laughable claim is that in order to keep such "stellar" talent, they need to pay such exorbitant sums.
I believe extraordinary talent should be paid extraordinarily well. The flip side is that screw-ups should not be rewarded. Rewarding failure isn't a good business practice. And when you work for a company that's so badly run as to require billions of dollars from American taxpayers just to stay in business, you have not earned your performance bonus.
News reports indicate that the White House is trying to find a legal means to prevent AIG from paying out the bonuses. How about the threat of incarceration?
This ain't my first dance and I've been around the block a whole bunch of times. For a company to be able to lose so much money with such abandon, there must be some freaky skeletons in its closet.
I suspect if the President were to deploy a team of forensic FBI accountants and another team of IRS investigators to AIG, the management team there would suddenly decide that 2009 isn't really the year to take these obscene bonuses.
Treason, like obscenity, takes many forms. You know it when you see it. What AIG is doing is un-American and comes dangerously close to treason. Although the company originally started in China, the initials AIG stand for American International Group. It's time for AIG stop the obscenity, put America first, and live up to values the word "American" stands for.
In return for our billions, we the people now own 79.9 percent of AIG. That makes the President of the United States, acting on behalf of the American people, the top shareholder at AIG. In any company, the majority shareholder is the boss. It's time for the management team at AIG to be taught who's boss.
Editor’s note: David Gewirtz is Editor-in-Chief, ZATZ Magazines, including OutlookPower Magazine. He is a leading Presidential scholar specializing in White House email. He is a member of FBI InfraGard, the Cyberterrorism Advisor for the International Association for Counterterrorism & Security Professionals, a columnist for The Journal of Counterterrorism and Homeland Security, and has been a guest commentator for the Nieman Watchdog of the Nieman Foundation for Journalism at Harvard University. He is a faculty member at the University of California, Berkeley extension, a recipient of the Sigma Xi Research Award in Engineering and was a candidate for the 2008 Pulitzer Prize in Letters.
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