AIG mess an American tradition
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/CRIME/03/21/aig.bonuses/art.aig1.gi.jpg]
Julian E. Zelizer
Special to CNN
In the explosion of outrage over the AIG executive bonus scandal, each party has hurled charges at the other. Both parties are blaming each other for rejecting measures that would have limited executive bonuses.
A few Republicans have called for the resignation of Treasury Secretary Tim Geithner - with efforts to paint him as the Michael Brown of this administration - and President Obama is promising that this week he will outline more stringent requirements for the financial world.
These partisan accusations miss a bigger factor behind last's week's revelations - America's middle-way in dealing with business-government relations. In many ways, the bonus scandal was utterly predictable and would likely have happened regardless of which party was in power. And if history is a guide, the populist outrage over the bonuses may not fundamentally change the federal government's relationship to private business.
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Filed under: AIG • Bailout Turmoil • Economy • Finance • Julian E. Zelizer |
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If we put aside the blame, and get back to basics – a "bonus" is an incentive for doing something well. When a business needs billions of dollars to be "bailed out" – that clearly means things are NOT going well. Any company receiving bailout money has admitted they have failed – and failure should not be rewarded with bonuses of any kind. All bonus money should be returned immediately. We would all like financial incentives – why does the financial industry think they deserve special treatment? They are certainly not the smartest people around....
Sure the AIG mess brings to light all the negative aspects of greed in American business. However, how about government? In New York State the strong Teacher's Union has established the equivalent of a 401k for them~it's titled 403(b). This is load free, no fees, if stock investments experience lost...as we know they did, the taxpayers will guarantee 4.25% earnings for the shortfall (higher rate in NYC). Free disability and life insurance rider that provides an annual disability benefit; free financial counseling through AYCO to a beneficiary in the event of death. No sales charges on any investment. No co-pays on health insurance. Insurance for the family at the same rate even after retirement ...for life.
Talk about the fleecing of America...it's abundantly clear in New York State.