Home
In this issue
April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review March 20, 2009 / 24 Adar 5769

Defending AIG

By Linda Chavez


Printer Friendly Version
Email this article

http://www.JewishWorldReview.com | Spare me the populist outrage. Members of the House Financial Services Committee sounded more like an out-of-control mob than leaders who could help solve one of the worst financial crises in U.S. history when they confronted AIG CEO Edward Liddy this week. And the president wasn't much better. They are whipping the American people into a nasty and destructive frenzy that won't do anything to help fix the economy and will likely make it worse.


Mr. Liddy is not public enemy No. 1. Liddy had nothing to do with the credit-default-swap mess that threatened to unravel the financial system last year. He came out of retirement (from a different company) at the urging of government officials to take over AIG when it was on the verge of collapse. After Wednesday's disgraceful performance by Committee Chairman Barney Frank and others — Republicans as well as Democrats — who could blame him if he decided to return to the golf course and let somebody else take the abuse?


But if Liddy's not to blame, neither are the AIG employees who received bonus checks this month. These are not the same people who devised the credit default obligations that jeopardized AIG. Those individuals are long gone. The bonus recipients are the people whose job is now to try to mitigate the financial risk those complex instruments caused. They are highly skilled and could, like Mr. Liddy, walk away and let the company implode, with consequences that even critics of AIG agree could affect all of us. In order to ensure they not do that, the company last year promised them financial incentives to stay in their jobs.


When a company is collapsing — as AIG certainly was at the time these contracts were negotiated — everybody who has an alternative is looking to jump ship. Think about it. If you knew that your employer might not be around in a few months and you had very specialized skills that were much in demand elsewhere, would you be willing to go down with the ship? Not likely. But if your employer offered you a handsome financial incentive to stick around, you'd be far more likely to take the risk. Well, that's exactly what AIG did when it negotiated retention bonuses.


But what about the people, who received those bonuses, that had already left the company? It's legitimate to question whether those bonuses are deserved, but it's ridiculous to jump to the conclusion they aren't based solely on the information we currently have.


It depends on the circumstances surrounding their departures. If they just up and quit, leaving the company in the lurch, they aren't entitled to the bonus. But my guess is that most of them left because the company decided it was in its interest either to eliminate the job or replace the individual with someone else. In that case, barring demonstrable fault on the part of the individual, the company would be obligated to pay the amount that had been promised when the employee agreed to stay on.


So if it's not the principle of retention bonuses that infuriates people, what is it? It's anger that the people who received these bonuses are greedy. But greed isn't the only destructive vice out there. What's driving public outrage right now is another unattractive vice: envy. Neither vice is healthy.


Class envy won't put a single penny in anyone's pocket. It won't save jobs. It certainly won't solve the credit crisis. And the irresponsible rhetoric from politicians will make it less likely that we will solve the real problems confronting the nation.


We've already had Sen. Charles Grassley suggest failed company executives ought to commit hari-kari — which he retracted later — and Rep. Barney Frank seemed perfectly happy to have AIG executives who received bonuses identified publicly even if it jeopardized their security. If this keeps up, it could turn really ugly. Mobs are difficult to control once they've been unleashed. But don't expect any of the rabble-rousers on Capitol Hill or in the White House to take responsibility if things turn violent.

Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.


JWR contributor Linda Chavez is President of the Center for Equal Opportunity. Her latest book is "Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics". (Click HERE to purchase. Sales help fund JWR.)

Linda Chavez Archives


© 2006, Creators Syndicate

Columnists

Toons

Lifestyles